The Nature of Planned Change:Lewin’s Change Model, Case Example: British Airways

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Lesson 07

The Nature of Planned Change

The pace of global, economic, and technological development makes change an inevitable feature of

organizational life. However, change that happens to an organization can be distinguished from change that

is planned by its members. Here, the term change will refer to planned change. Organization development

is directed at bringing about planned change to increase an organization's effectiveness. It is generally

initiated and implemented by managers, often with the help of an OD practitioner either from inside or

outside of the organization. Organizations can use planned change to solve problems, to learn from

experience, to reframe shared perceptions, to adapt to external environmental changes, to improve per-

formance, and to influence future changes.

All approaches to OD rely on some theory about planned change. The theories describe the different

stages through which planned change may be effected in organizations and explain the process of applying

OD methods to help organization members manage change.

Theories of Planned change:

The three major theories of organization change that have received considerable attention in the field are:

Lewin's change model, the action research model, and contemporary adaptations of action research.

Lewin's Change Model:

According to the open-systems view, organizations-- like living creatures--tend to be homeostatic, or

continuously working to maintain a steady state. This helps us understand why organizations require

external impetus to initiate change and, indeed, why that change will be resisted even when it is necessary.

Organizational change can occur at three levels-- and, since the patterns of resistance to change are

different for each, the patterns in each level require different change strategies and techniques. These levels

involve:

Changing the individuals who work in the organization--that is, their skills, values, attitudes, and

eventually behavior--but making sure that such individual--ehaviora4 change is always regarded as

instrumental to organizational change.

Changing various organizational structures and systems--reward systems, reporting elationships,

work design, and so on.

Directly changing the organizational climate or interpersonal style--how open people are with

each other, how conflict is managed, how decisions are made, and so on.

According to Lewin, a pioneer in the field of social psychology of organizations, the first step of any

change process it to unfreeze the present pattern of behavior as a way of managing resistance to change.

Depending on the organizational level of change intended, such unfreezing might involve, on the individual

level, selectively promoting or terminating employees; on the structural level, developing highly experiential

training programs in such new organization designs as matrix management; or, on the climate level,

providing data-based feedback on how employees feel about certain management practices. Whatever the

level involved, each of these interventions is intended to make organizational members address that level's

need for change, heighten their awareness of their own behavioral patterns, and make them more open to

the change process.

The second step, movement, involves making the actual changes that will move the organization to

another level of response. On the individual level, we would expect to see people behaving differently,

perhaps demonstrating new skills or new supervisory practices. On the individual level, we would expect to

see changes in actual organizational structures, reporting relationships, and reward systems that affect the

way people do their work. Finally, on the climate or interpersonal- style level, we would expect to see

behavior patterns that indicate greater interpersonal trust and openness and fewer dysfunctional

interactions.

The final stage of the change process, refreezing, involves stabilizing or institutionalizing these changes by

establishing systems that make these behavioral patterns "relatively secure against change," as Lewin put it.

The refreezing stage may involve, for example, redesigning the organization's recruitment process to

increase the likelihood of hiring applicants who share the organizations new management style and value

system. During the refreezing stage, the organization may also ensure that the new behaviors have become

the operating norms at work, that the reward system actually reinforces those behaviors, or that a new,

more participative management style predominates.

According to Lewin, the first step to achieving lasting organizational change is to deal with resistance to

change by unblocking the present system. This unblocking usually requires some kind of confrontation and

a retraining process based on planned behavioral changes in the desired direction. Finally, deliberate steps

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need to be taken to cement these changes in place--this "institutionalization of change" is designed to

make the changes semi-permanent until the next cycle of change occurs.

Figure: 07

Whatever the level involved, each of the three interventions is needed to make organizational members

address the level's need for change, heighten their awareness of their own behavioral patterns, and make

them more open to the change process.

Stage 1: Unfreezing

Three ways of unfreezing an organization are:

Disconfirmation

ii.

Induction of guilt or anxiety

iii.

Creation of psychological safety

i. Disconfirmation or lack of confirmation. Organizational members are not likely to embrace change

unless they experience some need for it. Embracing change typically means that people are dissatisfied with

the way things are quality is below standard, costs are too high, morale is too low, or direction is unclear,

for example.

Unfreezing involves reducing those forces maintaining the organization's behavior at its present level.

Unfreezing is sometimes accomplished through a process of "psychological disconfirmation." By

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introducing information that shows discrepancies between behaviors desired by organization members and

those behaviors currently exhibited, members can be motivated to engage in change activities.

ii. Induction of guilt or anxiety. This is a matter of establishing a gap between what is current but not

working well and some future goal that would make things work better. When people recognize a gap

between what is and what would be better and more desirable, they will be motivated via guilt or anxiety to

reduce the gap. But disconfirmation and induction are not enough to accomplish the unfreezing stage. One

more process is necessary.

iii. Creation of psychological safety. To face disconfirmation, experience guilt or anxiety, and be able to

act or move, people must believe that moving will not bring them humiliation or loss of self-esteem. People

must still feel worthy, psychologically safe. The consultant must be concerned with people not losing face

and must take care that when people admit that something is wrong they will not be punished or

humiliated.

Stage 2: Moving (Changing)

The second step, movement, involves making the actual changes that will move the organization to

another level of response.

On the individual level, we would expect to see people behaving differently, perhaps demonstrating new

skills or new supervisory practices.

On the structural level, we would expect to see changes in actual organizational structures, reporting

relationships, and reward systems that affect the way people do their work.

On the climate or interpersonal level, we would expect to see behavior patterns that indicate greater

interpersonal trust and openness and fewer dysfunctional interactions.

There are two main processes for accomplishing this stage:

i. Identification with a new role model

ii. Scanning the environment for new information

i. Identification with a new role model, mentor, boss, or consultant to "begin to see things from that

other person's point of view. If we see another point of view operating in a person to whom we pay

attention and respect, we can begin to imagine that point of view as something to consider for ourselves".

ii. Scanning the environment for new, relevant information. In working with the chairman of a

company and the president or CEO, the consultant explored many reasons for their conflict with one

another. To help with reducing some of this conflict, the consultant worked on clarifying roles and

responsibilities. He quotes other chairman-president/CEO models from other client organizations, some

that worked very well and some that did not. This process was an activity of bringing to the two of them

new, relevant information that might help them move forward with the changes needed in the relationship.

Stage 3: Refreezing

This final stage is one of helping the client integrate the changes. This stage involves stabilizing or

institutionalizing these changes by establishing systems (such as norms, policies, and structures) that make

these behavioral patterns "relatively secure against change".

The refreezing stage may involve

· Redesigning the organization's recruitment process to increase the likelihood of hiring applicants

who share the organization's new management style and value system.

· During the refreezing stage, the organization may also ensure that the new behaviors have become

the operating norms at work, that the reward system actually reinforces those behaviors, or that a

new, more participative management style predominates.

This stage can be seen in two parts self and relations with others:

Personal refreezing

ii.

Relational refreezing

i. Personal refreezing is the process of taking the new, changed way of doing things and making it fit

comfortably into one's total self-concept. This process involves a lot of practice trying out new roles and

behaviors, getting feedback, and making adjustments until the new way of doing things feels reasonably

comfortable.

ii. Relational refreezing is the process of assuring that the client's new behavior will fit with significant

others. In a system, when one begins to do things differently, will this difference quickly affect others with

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whom the person interacts? If you and I interact frequently and I change to maintain the relationship you

will have to change as well, at least to some extent to maintain the relationship. This process involves

openly engaging with others about the new way of doing things, to help them see why the change is better

than the old way.

Case Example: British Airways

In 1982 Margaret Thatcher's government in Great Britain decided to convert British Airways (BA) from

government ownership to private ownership. BA had regularly required large subsidies from the

government (almost $900 million in 1982), subsidies that the government felt it could not provide. Even

more important, the Conservative government was ideologically opposed to the government's ownership

of businesses--a matter they regarded as the appropriate province of private enterprise.

The growing deregulation of international air traffic was another important environmental change. Air fares

were no longer fixed, and the resulting price wars placed BA at even greater risk of financial losses.

In order to be able to "privatize"--that is, sell BA shares on the London and New York Stock

Exchanges--it was necessary to make BA profitable. The pressures to change thus exerted on BA by the

external environment were broad and intense. And the internal organizational changes, driven by these

external pressures, have been massive and widespread. They have transformed the BA culture from what

BA managers described as "bureaucratic and militaristic" to one that is now described as "service-oriented

and market- driven." The success of these efforts over a five- year period (1982--1987) is clearly depicted

in the data.

This figure 8 reflects BA's new mission in its new advertising slogan--"The World's Favorite Airline." Five

years after the change effort began, BA had successfully moved from government ownership to private

ownership, and both passenger and cargo revenues had dramatically increased, leading to a substantial

increase in share price over the offering price, despite the market crash of October 1987. Indeed, in late

1987 BA acquired British Caledonian Airways, its chief domestic competitor. The steps through which this

transformation was accomplished clearly fit Lewin's model of the change process.

Table: 01

The British Airways Success Story: Creating the "World's Favorite Airline"

1982

1987

Ownership

Government

Private

Profit/loss

$900 million

$435 million

Culture

Bureaucratic and

Service-oriented and market-driven

militaristic

Passenger load factor

Decreasing

Increasing-up 16% in Ist quarter

1988

Cargo load

Stable

Increasing-up 41% in Ist quarter

1988

Share price

N/A

Increased 67% (2/11/87-8/11/87)

Acquisitions

N/A

British Caledonian

Unfreezing: In BA's change effort, the first step in unfreezing involved a massive reduction in the

worldwide BA workforce (from 59,000 to 37,000). It is interesting to note that, within a year after this staff

reduction, virtually all BA performance indices had improved--more on-time departures and arrivals, fewer

out-of-service aircraft, less time "on hold" for telephone reservations, fewer lost bags, and so on. The

consensus view at all levels within BA was that the downsizing had reduced hierarchical levels, thus giving

more autonomy to operating people and allowing work to get done more easily.

The downsizing was accomplished with compassion; no one was actually laid off. Early retirement, with

substantial financial settlements, was the preferred solution throughout the system. Although there is no

question that the process was painful, considerable attention was paid to minimizing the pain in every

possible way.

A second major change occurred in BA's top management. In 1981, Lord John King of Wartinbee, a senior

British industrialist, was appointed chairman of the board, and Cohn Marshall, now Sir Colin, was

appointed CEO. The appointment of Marshall represented a significant departure from BA culture. An

outsider to BA, Marshall had a marketing background that was quite different from that of his

predecessors, many of whom were retired senior Royal Air Force officers. It was Marshall who decided,

shortly after his arrival, that BA's strategy should be to become "the World's Favorite Airline." Without

question, critical ingredients in the success of the overall change effort were Marshall's vision, the clarity of

his understanding that BA's culture needed to be changed in order to carry out the vision, and his strong

leadership of that change effort.

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To support the unfreezing process, the first of many training programs was introduced. "Putting People

First"--the program in which all BA personnel with direct customer contact participated - was another

important part of the unfreezing process. Aimed at helping line workers and managers understand the

service nature of the airline industry, it was intended to challenge the prevailing wisdom about how things

were to be done at BA.

Movement: Early on, Marshall hired Nicholas Georgiades, a psychologist and former professor and

consultant, as director (vice president) of human resources. It was Georgiades who developed the specific

tactics and programs required to bring Marshall's vision into reality. Thus Georgiades, along with Marshall,

must be regarded as a leader of BAS successful change effort. One of the interventions that Georgiades

initiated--a significant activity during the movement phase--was to establish training programs for senior

and middle managers. Among these were "Managing People First" and "Leading the Service Business"--

experiential programs that involved heavy doses of individual feedback to each participant about his or her

behavior regarding management practices on the job.

These training programs all had more or less the same general purpose: to identify the organization's

dysfunctional management style and begin the process of developing a new management style that would

fit BA's new, competitive environment. If the organization was to be market- driven, service-based, and

profit-making, it would require an open, participative management style-- one that would produce

employee commitment.

On the structures and systems level during the unfreezing stage, extensive made of diagonal task forces

composed of individuals from different functions and at different levels of responsibility to deal with

various aspects of the change process--the need for MIS (management information systems) support, new

staffing patterns, new uniforms, and so on. A bottom-up, less centralized budgeting process--one sharply

different from its predecessor--was introduced.

Redefining BA's business as service, rather than as transportation, represented a critical shift on the level of

climate/interpersonal style. A service business needs an open climate and good interpersonal skills, coupled

with outstanding teamwork. Off-site, team-building meetings--the process chosen to deal with these issues

during the movement stage--has now been institutionalized.

None of these changes would have occurred without the commitment and involvement of top

management. Marshall himself played a central role in both initiating and supporting the change process,

even when problems arose. As one index of this commitment, Marshall shared information at question-

and-answer sessions at most of the training programs--both "to show the flag" and to provide his own

unique perspective on what needed to be done.

An important element of the movement phase was acceptance of the concept of "emotional labor" that

Georgiades championed--that is, the high energy levels required providing the quality of service needed in

a somewhat uncertain environment, such as the airline business. Recognition that such service is

emotionally draining and often can lead to burnout and permanent psychological damage is critical to

developing systems of emotional support for the service workers involved.

Another important support mechanism was the retraining of traditional personnel staff to become internal

change agents charged with helping and supporting line and staff managers. So, too, was the development

of peer support groups for managers completing the "Managing People First" training program?

To support this movement, a number of internal BA structures and systems were changed. By introducing

a new bonus system, for example, Georgiades demonstrated management's commitment to sharing the

financial gains of BA's success. The opening of Terminal 4 at Heathrow Airport provided a more

functional work environment for staff. The purchase of Chartridge House as a permanent BA training

center permitted an increase in and integration of staff training, and the new, "user-friendly" MIS enabled

managers to get the information they needed to do their jobs in a timely fashion.

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Table: 02

Applying Lewin's Model to the British Airways (BA) Change Effort

Levels

Unfreezing

Movement

Refreezing

Individual

Downsizing of workforce Acceptance of concept Continued

($9,000 to 37,000); middle of "emotional labor".

commitment of top

management especially hard Personnel

staff

as management.

hit.

internal consultants.

Promotion of staff

New top management team.

"managing people first" with new BA values.

"putting people first"

peer support groups.

"Top

Flight

Academies".

"Open

Learning" programs

Structures

and Use of diagonal task forces to Profit sharing (3weeks New

performance

systems

plan change.

pay in 1987).

appraisal system based

Reduction in levels of Opening of Terminal 4. on both behavior and

hierarchy.

Purchase of Chartridge performance.

Modification of budgeting as training center.

Performance-based

process

New, "User-friendly" compensation system.

MIS

Continued use of task

forces

Climate/interpersonal Redefinition of the business: Greater emphasis on New uniforms.

style

service, not transportation.

open communications. New coat of arms.

Top-management

Data feedback on Development and use

and work-unit climate.

of cabin-crew teams.

commitment

Off-site, team-building Continued use of data-

involvement.

meeting.

based feedback on

climate

and

management practices.

Refreezing: During the refreezing phase, the continued involvement and commitment of BA's top

management ensured that the changes became "fixed" in the system. People who clearly exemplified the

new BA values were much more likely to be promoted, especially at higher management levels. Georgiades

introduced additional pro-grams for educating the workforce, especially managers. "Open Learning"

programs, including orientation programs for new staff, supervisory training for new supervisors, and so

on, were augmented by "Top Flight Academies" that included training at the executive, senior

management, and management levels. One of the academies now leads to an MBA degree.

A new performance appraisal system, based on both behavior and results, was created to emphasize

customer service and subordinate development. A performance-based compensation system is being

installed, and task forces continue to be used to solve emerging problems, such as those resulting from the

acquisition of British Caledonian Airlines.

Attention was paid to BA's symbols as well-- new, upscale uniforms; refurbished aircraft; and a new

corporate coat of arms with the motto "We fly to serve." A unique development has been the creation of

teams for consistent cabin-crew staffing, rather than the ad hoc process typically used. Finally, there is

continued use of data feedback on management practices throughout the system.

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