cornell HR review

CHANGE MANAGEMENT AND ORGANIZATIONAL EFFECTIVENESS FOR

THE HR PROFESSIONAL
Steve Hanson
Introduction
Hostess Brands, an American company established in the 1930s, specialized in baked goods
including the long established Twinkies, Ho Hos, and Wonder Bread. In November of 2012,
Hostess management filed for bankruptcy, blaming the unions and workforce for the financial
fiasco. While the organized workforces unwillingness to bend to managements demands may
have been a tipping point in the Hostess failure, it was clearly not the main issue. Hostesss
unwillingness or inability to change over time was what really led to the companys downfall.
According to Forbes contributor Adam Hartung, the obvious problem was that leadership kept
trying to sell the same products, using roughly the same business model, long, long, long after the
products had become irrelevant."1 . Points which should have invoked change for Hostess
include: changing consumer tastes, nutritional considerations, and the reality that Hostesss
product costs were higher than the prices that Hostess was able to sell the product for2. Because
change didnt happen, 18,000 jobs were lost and an iconic American business failed.
In todays dynamic business world, any change not managed correctly can strain HRs ability to
help the business create and maintain competitive advantage. Human Resource professionals need
to have the knowledge, skills, and abilities to not only adapt to change but to also identify when
its needed and how to successfully leverage such opportunities. According to the SHRM 2007
Change Management Survey Report, only 23% of companies had HR staff devoted full time to
change management programs. This means that 77% of HR professionals who encounter change
management initiatives will be dealing with change on an ad hoc or inconsistent basis3. This
article outlines steps and strategies to lead the everyday HR professional to a higher level of
agility and effectiveness through the change process. The primary steps outlined in this article
are:
Assessment: Understanding organizational and employee readiness for change
Preparation: Setting the groundwork for the change process
Execution: Implementing and monitoring change and organizational development
Sustaining: Is sustaining and institutionalizing change the right answer
1.

Assessment: Understanding Organizational and Employee Readiness for Change

Assessing organizational and employee readiness for change necessitates considering the timing
of company programs, the speed of the plan, its duration, and the workforces knowledge, skills,
and abilities (KSA) to implement the approaching change. All of these factors can be considered
the hard issues of change management which, if ignored, can lead to the premature breakdown
of transformation programs4.

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Timing: Timing will be a critical focus during change implementation. Common sources of
timing issue include open enrollment, Kaizen improvement projects in manufacturing groups,
companywide audits, annual trainings, etc. During times of transition, each of these situations
can place additional strain on the workforce and company resources. Too much pressure can
seriously affect the success of the change initiative. Change will inherently require more energy,
focus, and attention from employees as theyre asked to accomplish daily tasks while instituting
the change initiatives. HR needs to identify any concurrent drivers which could apply additional
pressures on the employees and business units. HR must be able to assess if the organization can
handle the additional strain, or if the timing of the change initiative should be adjusted.
Speed: While timing is focused on when change will be implemented, the question of speed
focuses on how fast the change needs to take place. For example, a medical device company
might be the only company in its industry with FDA approval to launch a new device.
Accordingly, the company would need to launch the device quickly in order to corner the market.
On the other hand, a company implementing a cultural change would need more time and
flexibility to incorporate those changes. If change needs to be implemented quickly, HR must
have a clear plan in place so the company can move forward rapidly and effectively. In such a
situation, HR should minimize the number of people involved in the change management process;
the more people involved, the slower the process will be. Moreover, HR will need to encourage
leadership to be very attentive to resistance. If the company limits involvement for efficiency
reasons there is an increased likelihood that employees will feel ignored and fight the change
process. Conversely, when speed is not such an issue, companies can consider broader employee
involvement, to foster employee ownership and buy-in5.
Training (KSAs): According to the SHRM 2007 Change Management Survey Report, 44% of
respondents listed insufficient time devoted to training as a major challenge of the change
process. A companys failure to adequately prepare employees for change is critical, and HR
must address this issue in the assessment stage, as its almost impossible to correct later. There
are three specific questions HR needs to ask. First, do we have the required knowledge, skills, and
abilities (KSAs) to foster success in this situation? Second, what KSAs would enhance success?
Third, what are the time and resource needs to make this training happen? With this information
HR can move forward confidently that a lack of knowledge, skills, or abilities will not inhibit a
positive change implementation.
As leadership and HR address each of these hard issues, they will have a clear understanding of
the company and employees readiness for change. Postponing change for as little as a month to
avoid a particularly hectic time of year or to better prepare employees could largely increase a
change programs probability of success.
2.

Preparation: Setting the Groundwork for the Change Process

The assessment stage is a lot like identifying if a business has enough capital, cash on hand, and
resources to move forward with a large expansion project. The Preparation stage is when the
business is able to say, Ok, we can do this; lets get started. Change management is like any
worthwhile project; it needs to start early and the preparation needs to be done well.
Creating a Vision for Change and a Strong Leadership Voice: Management and HR need to
clearly identify a vision for the change process. The vision should clearly highlight the: who,
what, why, when, and how of the change process. When management attempts to build a
persuasive vision for change they need to connect the change vision with the current identity of
the company and the core values of the business. Leadership also needs to make sure there are

 2010 Cornell HR Review

vivid descriptions of what the change and the future are going to look like. By doing this the
vision will be more compelling to the employee population6.
By identifying and building the vision early, company leadership is able to buy into and represent
the upcoming change effectively. Throughout the change process, its critical for the workforce to
see commitment to the change from management at all levels. If employees dont see that the
companys leadership is supporting a project theyre unlikely to change7. When management can
show employees that change is possible and exciting, people feel empowered and are more likely
to buy into the prospect of change and work hard to make it happen.
Unfreezing: The second significant point of the preparation stage is to unfreeze the current
state of thinking about the organization and what its doing. Most employees inherently dont feel
that change is needed, especially if the business is doing well. Unfreezing is the act of
highlighting the gaps that exist in the current model (i.e. the need for change) or focusing on the
growth opportunities that the business could realize if the specific change takes place. By doing
this, HR paints a different picture of the current situation and alters employee perceptions. The
act of focusing on gaps or opportunities is called physiological disconfirmation and brings the
workforce to a point where it can clearly see and agree that change is needed or beneficial8. This
could also be looked at as reframing situations so people can look at them in a new way.
Framing is a mental window through which we view problems, solutions, or opportunities9. By
re-framing the business situation, employees can take a step back, understand the need and/or
benefit of the change project, and make a mental shift and get behind the change.
Avoiding Resistance and Communication Strategies
According to the SHRM 2007 Change Management Survey Report, 76% of respondents listed
employee resistance as a major hindrance to change, making it the most frequently reported
obstacle followed closely by communication breakdown at 72%10. With these metrics in mind,
its clear that HR professionals must find tactics to reduce employee resistance and minimize the
breakdown of communication before and throughout the change management process.
Comprehensive Communication Plan: Confusion is a lack of understanding among employees
and usually occurs because managements message is not clearly presented. Ignorance is a lack of
information and happens when there are not enough details voiced or employees are intentionally
kept in the dark. When these situations occur, employees tend to tell themselves stories to fill in
the gaps, and most of the time self-created stories are negative and inhibit the change process11.
Building an effective communication plan with information, dates, challenges, deadlines, etc. will
diminish employee confusion and ignorance simultaneously. The comprehensive communication
plan should focus on identifying and anticipating resistance, questions, and concerns that
employees will have. By doing this, management can speak with confidence when
communicating with employees about current or upcoming change12. This confidence and clarity
will help convince employees that company leadership is prepared for the future and the change
can be a success13.
Part of the communication plan must address company culture and how it will be impacted. With
each new change thats launched theres risk to the overall company culture. Employees often
resist changes to a familiar culture. By making sure that HR communicates how the change will
align with or enhance the current organizational culture, HR can eliminate potential employee
fear. In addition, HR should encourage the leadership team to have a culture of communication
within the team and with subordinates. One of the worst things that can happen for the companys
culture is inconsistency in understanding. If theres a culture shift in one area of the company and
not in others, this can create animosity, misunderstanding, and errors, which can hinder the

 2010 Cornell HR Review

planned change process. By focusing on culture, values, and company ideology, business and HR
leaders will better manage the challenging dynamics of culture during institutional change.
Picking the Right Messenger: Once the communication strategy has been developed, the HR
team needs to identify the right messenger to communicate the change plan. Most times, the role
of messenger falls to the CEO. However, this might not always be the best option. Research
suggests that employees may use the positive or negative feelings they have about a messenger to
decide whether the message can be trusted. Employees who feel loyalty, support, trust, and liking
for a particular messenger have proven less likely to resist change. This finding has held true
across multiple management communication approaches14. When employees communicate with
messengers they trust and like, theyre more likely to listen and accept change initiatives. Its not
just important for HR to identify the right messenger at the top of the organization; HR also needs
to implement an identification strategy aimed at recognizing leaders who are trusted and can act
as change messengers at all levels of the organization15.
Give Them Voice: In addition to communicating effectively through the right messengers, HR
needs to ensure, where possible, that employees have a voice throughout the change process. This
doesnt mean that all employee ideas need to be implemented. However, management and HR
should listen to employees and identify what ideas can be realized without inhibiting the change
initiative. Employees frequently give management and HR a broader or deeper perspective into
the effects of change. This information often helps the process be more successful in the short and
long run. Also, by taking note of employee ideas and concerns, HR demonstrates that it values
employee buy in and ownership. This also creates a greater sense of procedural justice for the
employees throughout the change process16.
3.

Execution: Implementing and Monitoring Change and Organizational Development

Execution of a change initiative can be exhilarating and stressful for the business leaders and the
employee population. Its critical that HR approaches implementation with a structured and
systematic method. Most of the vital steps in the assessment and planning stages must be repeated
in the implementation phase. HR professionals must reduce resistance, encourage input, continue
to focus on training and education, ensure effective communication, and ensure that the vision
stays inspiring and consistent with the company culture as the business moves through the change
initiative. However, there are additional areas that management and HR must act on to build
employee confidence in the change, and employees abilities to contribute to the change process
during implementation. Those areas are expectancy theory, creating small wins, equity theory,
and correcting direction.
Expectancy Theory: Expectancy Theory1 is a critical motivation strategy that businesses need to
consider during change. Throughout the change process employees must feel that the proposed
plan is possible and that as the proposed actions are taken, it will lead to the expected results,
which will be positive or beneficial. This must be a key focus during change. If the employees
dont find value in the change or they dont think its possible, theyre less likely to apply the
effort required to implement the desired change. Managers must evaluate, whats the perceived
value.
Expectancy Theory: Its the idea that a persons level of effort directly correlates with the expectancy that
the desired results are possible and likely to happen. Expectancy theory has three primary factors:
Expectancy (E): If employee puts forth X effort, the employee feels he/she will obtain Y level of
performance, Instrumentality (I): If Employee achieves Y level of performance, it will lead to outcome Z,
Valance (V): If it leads to outcome Z, does employee want Z outcome and to what level does employee
want Z (Hackman & Porter, 1968)
1

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Small Wins: This concept centers on creating and highlighting early accomplishments, and
therefore setting an expectation that success is possible. An example of small wins would be the
case of Siemens Nixdorf Information Systems (SNI). SNI lost over $350 million in fiscal year
1994 and was trying to deal with these struggles. In its quest to stem the financial losses, SNI
hired new CEO, Gerhard Schulmeyer, who immediately instituted a culture change program. He
assembled opinion leaders throughout the company to generate ideas, goals, and then created 60
action teams responsible for creating tangible results in the first 90 days. In May 1995,
Schulmeyer held a Results fair in Munich where 12,000 employees were able to see what had
been accomplished in the first 90 days of the culture change program. Employees were excited;
Schulmeyer used the power of small wins to create motivation for his change program17. The best
time to identify small wins is early and often18. By doing this, HR builds employee confidence
and self-efficacy toward change. Small wins have a snowball effect, gathering momentum as they
roll, and leading to greater confidence and profound results.
Equity theory:2 Employees often try to alter a real or perceived unfair situation by altering inputs
or outputs, telling a story about the situations (i.e. cognitive distortion), choosing alternative
comparisons, or leaving the company altogether. During change, many companies revamp the
compensation models and give out prizes and/or rewards for success. Because opportunities
during change vary, some employees may come out more favorably than others, which could
create discontent among employees. When businesses institute a change initiative, HR needs to
consider the equity of the situation and how to brand it appropriately. If theres inequality or even
perceived inequality, employees may feel frustrated toward the change and mentally disengage or
try to alter the environment to make it feel or be more equitable.
Correcting Direction: During the implementation stage of a change initiative HR professionals
need to ensure that they instill a clear understanding that management encourages feedback and
ideas throughout the change process. Many times, change initiatives derail because management
and employees are so focused on the end results that theyre unwilling to change course even in
the face of obvious obstacles. Correcting direction is an important part of implementing change
and should be something the company is ready to embrace if adjustments are necessary.
The classic example of an organization failing to correct direction was the Challenger disaster in
1986, in which a NASA space shuttle exploded over the Atlantic Ocean, killing the entire crew.
The primary issue that caused the explosion originated from the failure of the shuttles O-rings at
low temperatures. These facts, and the extreme risks, were clear to some of the engineers, but the
group norms were set and these norms made it hard to change the direction that the team was
moving. Many people wanted to move forward and presented high levels of defensiveness against
those who raised concerns. Because of strong defending of the current plan, engineers who knew
about the O-ring problem backed down and said that everything should be fine the rest is
history.
4.

Sustaining: Is Sustaining and Institutionalizing Change the Right Answer?

What is sustainability? What is institutionalization? If they are different, do the differences

matter? The answer is clear; they are different and the differences are critical to the change
management process. Sustainability can be viewed as - keeping a company from moving back to
old ways while the change process moves forward. HR can help this happen by supporting the
firms change agents (the people who are pushing the change program forward). If change agents
2

Equity theory is about how employees view the equality of a situation. An employee will look at his/ her inputs and
the resulting outputs in comparison to others and will ask the question, Am I being treated fairly? If the answer is
no, employees may attempt to correct the problem themselves, which may bring negative results.

 2010 Cornell HR Review

become burned out, they may stop encouraging employees and the program may lose momentum
and falter. Establishing a support system gives change agents a place to vent, exchange ideas with
other change agents, and gain an understanding that others are facing the same types of
challenges. Most times, change agents need some level of psychological distance from the rest of
the employees. Its critical that change agents have a place where they can be open and honest
without reproach or retribution19. Creating a change agent support system is akin to reinforcing
the foundation of a house that is holding everything else in place. Went these change leaders are
supported theyre able to continue to sustain organizational change.
Institutionalization, on the other hand, encompasses the actions surrounding keeping changes
that are effective in place after sustainability. It is defined as the process of initiating, executing,
and managing change for the appropriate length of time. Institutionalization should happen when
a company can identify changes that result in higher levels of competitive advantage
This highlights the importance of consistently reviewing change initiatives and continually asking
the question, Is this program still offering us a competitive advantage? A risk of
institutionalization is the loss of leadership attention and the subsequent depreciation of the value
that the change holds. To avoid this, HR must keep a pulse on what is happening with change
programs. HR must bear in mind the programs intended aim and assure the results are still
moving toward that end. Furthermore, HR must ask if these expected results will align with the
business model and larger organizational goals. If the change is no longer effective or no longer
in alignment it needs to be reviewed, revamped, or discontinued.
How to Sustain/ Institutionalize Change: When a change initiative is successful and creates a
competitive advantage, the question then is how to institutionalize that change for an appropriate
period of time. Many of the steps highlighted in the planning and implementing stages are
mirrored in sustaining and institutionalizing a change. These steps include: gaining high levels of
commitment, reducing resistance, highlighting accomplishments, encouraging collaboration,
training, communication, and appropriate incentive allocation to foster motivation. The biggest
difference here is that HR professionals need to help the change initiative be seen as a norm, part
of the business model, and not just a fad. This could require continual reminders so that old habits
are broken and employees move forward with the new agenda.
Not every change is appropriate to sustain, let alone to institutionalize, but change is always
happening. Its imperative that HR professionals develop and encourage a culture thats adaptive,
dynamic, and open to change. As leadership and HR create a change culture, where change
seems the norm, the continued alterations will be less taxing, there will be reduced burnout, and
employees will be more effective over time20.
Conclusion Historically HR has faced business challenges and issues from a static approach. By
mastering necessary stability processes, HR limits its ability to work in a change environment.
The stable, day-to-day operations in HR will always be important and its critical that theyre
done well21; however, to strategically enhance the businesss competitive advantage, HR needs to
master how to lead the change process now and in the future. To do this, HR needs to be
effective at assessing the company and its readiness for change, set the ground work for the
change to happen, move forward to implement change and monitor its progress, help to sustain
momentum, and know when it is appropriate to institutionalize change in an organization. As this
happens, Human Resource professionals will have the knowledge, skills, and abilities to not only
work through change but also identify when its needed and how to make it successful.

 2010 Cornell HR Review

Steve Hanson is a recent graduate of the University of Minnesotas, Carlson School of

Management, Master in Human Resources and Industrial Relations program. Steve has worked
as a Corporate Training Office, was proprietor of Steve Hanson: Leadership Keynotes and
Conferences, and was a G raduate Teaching Assistant covering the topics of Labor Relations and
Collective Bargaining. Mr. Hanson is currently working for ExxonMobil Corporation as an HR
advisor.

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