Making Sense of Organizational Change

Jean Helms-Mills

• Publisher: Routledge
• Year: 2003
• ISBN:
  9781134202751
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Applying an invaluable sensemaking framework to organizational change and combining the theory and practice of implementing change, this book represents an instructive and informative view on change in business. Its strength lies in two key areas:

• the discussion and explanation of a strategic sensemaking approach, for helping managers, management educators and students to understand organizational change
• a longitudinal study of a major company which underwent several organizational changes, revealing some of the key problems and challenges that managers face when introducing, implementing and managing change.

Rather than being structured as a 'how to' book, this outstanding text provides the reader with practical insights and skills for managing (or resisting) change. Applying Weick's famous sensemaking approach, it offers a unique way to understand the processes involved in organizational change.

1  Introduction

The little girl had the making of a poet in her who, being told to be sure of her meaning before she spoke, said: ‘How can I know what I think till I see what I say?’

(Wallace, 1926 – quoted in Weick, 1995: 12)

Introduction

This book is about making sense of organizational change. To understand the change process and change management in action, the book focuses on a major North American utility company that underwent a series of changes between 1982–2002. Using a grounded theory approach (Glaser and Strauss, 1967), data was collected in Nova Scotia Power between 1991 and 1996, while it underwent two major processes of change. This longitudinal case study involved extensive content analysis of Nova Scotia Power’s corporate documents, observations of numerous planning meetings and change practices in action, discussions and interviews with a number of senior managers, and a series of semi-structured interviews with employees in the organization. The events that led to the selection and implementation of a planned culture change and a re-engineering programme are made sense of through a strategic, retrospective use of Weick’s (1995) sensemaking approach to organizational analysis.

Studying organizational change in action

Over the last two decades of the twentieth century, theories of organizational change have had a tremendous impact on business and not-for-profit companies. The extent of the influence of popular theories of change – including ‘Culture Change’, Total Quality Management (TQM), Business Process Re-engineering (BPR), Organizational Learning, and, more recently Six Sigma – is evidenced throughout the business world as application and outcomes are reported and debated in the business presses, consulting reports, management journals and ‘best-selling’ business trade books.¹ Thousands of companies, including many of the top corporations, have implemented one or other change programme over the last twenty years,² often at the cost of millions of dollars, and involving large-scale restructuring and extensive job losses. At the end of the day, while it is generally agreed that certain change programmes have become widely popular, there is considerable debate about the success or failure of the subsequent changes themselves. Business critics who support Culture Change, TQM or BPR blame suggested failure on incorrect implementation. Other business critics are less convinced, questioning the lack of evidence of a clear link between the implementation of selected change programme and subsequent business success (Grey and Mitev, 1995).

What has been missing from the debate so far is what actually happens when management adopts and applies a popular change programme, and what can be learned from this. Reminiscent of the pioneering work of Henry Mintzberg (1973) and the more recent study of Rick Delbridge (1998), we are reminded that Mintzberg’s observations of managers in action cast a very different light from that of conventional ideal-typical constructions on the skills needed to be a successful manager.

Analysis of the data suggests that the implementation of organizational change, particularly selected change programmes such as Culture Change, TQM and BPR, does not follow the rational, orderly decision-making processes indicated by advocates (e.g., Hammer and Champy, 1993; Juran, 1988; Schein, 1985). Instead, processes of organizational change appear to be fraught with conflicting and constantly changing points of sensemaking in which various actors vie to make sense of a particular situation and its outcomes. These enactments owe more to the ability to develop a plausible account than to any notion of ‘success’ or ‘failure’. Further, the data suggest that in the post-1980 era organizational change is experienced as a metadiscourse (Cooke, 1999; Foucault, 1980) that acts as an imperative to constant change. This, in part, may explain the faddish nature of change programmes (Abrahamson, 1996) which, in turn, indicates that the processes of organizational sensemaking occurs within broad contexts, which influence actors’ choices of extracted cues.

Sensemaking as a theoretical framework for understanding change

Karl Weick (1995: xi) describes his organizational sensemaking approach as ‘a developing set of ideas with explanatory possibilities’. This approach has gained in popularity since the mid-1990s because its focus on understanding organizational processes makes it flexible enough to be applied to a diverse range of organizational outcomes. In Weick’s earlier work (1979), the notion of sensemaking took on theoretical properties as a ‘recipe’ for organizational analysis, and in subsequent studies of organizations sensemaking was used as a theoretical framework for analysis of organizational events and outcomes (1990a, 1990b, 1993a, 1993b, 1996). Yet later, in his book on sensemaking and organizations, Weick (1995: xi) presented his sensemaking approach as, ‘a developing set of ideas with explanatory possibilities, rather than as a body of knowledge’ or ‘an ongoing conversation’. In the spirit of the latter comments I have taken up the conversation, seeking to make strategic use of the approach as the basis of a theoretical framework. Thus, my contribution to the conversation is twofold: one, to use some of the central ideas of sensemaking (viz. sensemaking properties) to analyse a case study of organizational change and, two, to explore the usefulness of the sensemaking approach itself as an heuristic for understanding organizational change.

In the course of this study, I have also discovered that while the sensemaking approach provides a valuable framework for analysis of key elements of organizational change (e.g., how implementation strategies and outcomes are influenced by sensemaking activities), it is limited in its ability to adequately account for structural influences on sensemaking activities (e.g., how certain decisions appear constrained by formative contexts and organizational rules), or their translation into social-psychological outcomes (e.g., the processes whereby, and through which, certain decisions become understood in meaningful ways). So, I have concluded that analysis of organizational change and change management needs also to take into account the sensemaking activities of the actors involved, in particular those factors that facilitate or mitigate against the ability of key actors to develop plausible accounts. To that end, the outline of a modified sensemaking approach will also be proposed.

The case study

Nova Scotia Power Corporation (NSP) provides a valuable case study because it has gone through a number of major organizational changes over the last two decades. In particular it provides valuable insights into the way that large corporations have been willing to adopt many, if not all, of the major change programmes that have been on offer since the advent of culture change in 1980.

NSP is a large electrical utility based in the maritime province of Nova Scotia, on Canada’s Eastern Shore. Officially the company has been in continuous operation, in one form or another, for nearly eighty years and is headquartered in the provincial capital of Halifax. The company operated as a government-owned ‘Crown Corporation’ until 1992 when it was privatised. Today Nova Scotia Power operates as the largest subsidiary of Emera Inc., which describes itself as ‘a diversified energy and services company’ (Emera Annual Report 2001: 18), whose shares trade on the Toronto Stock Exchange (TSE). Since its acquisition of Bangor Hydro-Electric on 10 October 2001, Emera Inc., currently employs a total of 2,248 people in a number of offices, call centres, and generating plants throughout the province of Nova Scotia and the state of Maine. In 2002, the vision of Nova Scotia Power is to be ‘the customer’s choice in energy and services’ (Ibid.: 19).

In recent history, the company has been through a series of major changes that include a company-wide attitude survey (1987), a culture change programme (1988–93), privatization (1992), downsizing (1993 and 1995), a business process re-engineering programme (1993–5), key leadership changes (1983 and 1996), ‘strategic business units’ (1996) and, most recently (1999–2000), the introduction of a ‘balanced scorecard’ strategic plan. Many of these changes were reported, often applauded, in the business presses (Bruce, 1991; Comeau, 1994; Conrad, 1995; et al., 1995; Kaplan and Norton, 2000; McShane, 1998; Myrden, 1993, 1994). Arguably, NSP is a classic serial change company that has much to tell us about how and why senior managers adopt change programme and what the outcomes are. The focus of this case study is on two of NSP’s early change programmes, which significantly contributed to their penchant for adopting the latest in management fads and fashions.

In 1991 and again in 1993 I was fortunate to gain access to the company to study, respectively, the Culture Change and BPR programmes that the company was undergoing. In the first phase of the research (1991–3) I was given almost unlimited access to the company to study the ‘success’ of its ‘Culture Change program’. With the full support of senior management, including the Chief Executive Officer (CEO) Louis Comeau, I was given full access to travel the province, making site visits, sitting in on company meetings, conducting interviews with managers and employees, and observing various processes at work. In the second phase of the research (1993–6) I was given more limited access to study aspects of the re-engineering process. Despite initial resistance from company BPR consultants, Ernst & Young, I was able to sit in on several re-engineering planning meetings, to observe a key re-engineering process – the call centre – at work, and to interview a number of associated managers and employees. Access to the Human Resources Director was maintained throughout both phases of the research and provided invaluable insights to the various processes underway and to ‘the thinking of senior management’.

Through numerous observations, interviews and content analysis of company documents over a considerable period of time (1991–6), my unique access allowed me to construct a case study of a major company undergoing change. Instead of being limited to a study of isolated changes in a number of different organizations, I was fortunate to be allowed to observe the influence and impact of change and how it was understood. Although it is contentious to argue that a case study can be taken as representative of a class of phenomena or events, I contend that NSP is in many ways ‘typical’ of a number of organizations of the time. Certainly NSP shared with numerous organizations the experience of adopting and implementing change programmes, adopting culture change and re-engineering programmes at a time when each was in vogue and at a peak of popularity among business practitioners and educators. On a different front, NSP was typical of many state-owned organizations throughout Britain and North America that underwent privatization. While many of the practices of Nova Scotia Power are not generalizable to an understanding of other companies, the sensemaking properties and processes, I contend, are.

Making sense of the change process at Nova Scotia Power

My analysis of events at Nova Scotia Power raised many issues pertaining to the management and enactment of organizational change, that eventually led me to adopt a sensemaking perspective. What are the factors that encourage senior managers to perceive a need for change and how do these perceptions influence the consequent change process? For example, Nova Scotia Power’s culture change programme was introduced at a time when the company was operating as a Crown Corporation and certain senior managers perceived a need to unify the disparate elements of the publicly owned company. Whereas, re-engineering was introduced at a point when the company was facing privatization and senior managers were primarily concerned with efficiency and profitability.

The role of ‘experts’ in the social construction of change scenarios and of the epistemological nature of change, itself, I felt, was also worthy of exploration. Again, in both the culture change and the re-engineering situations, I was struck by the fact that change decisions were influenced by knowledge of ‘successful examples’ of other change programmes, and the activities of selected consultants. For instance, the company’s ‘Culture Change’ programme was influenced by the success of another local company, MT&T, and they hired a Nova Scotia consultant who focused exclusively on building unity around four ‘core values’. This, in turn, raised questions about whether or not specific choices influenced the outcomes of change and about the nature of change itself. What, I wondered, would the outcome have been if the company had chosen a consultant that had focused, not on values, but on a different set of characteristics, e.g., sub-cultures. This in turn led me to wonder about the implications of the socially constructed nature of change and of specific change programmes for the management of change. What problems might organizations face in attempting to implement a culture change programme that relies on a specific notion of culture and organizational reality?

Finally, some of the problems that I observed with the implementation of change programmes led me to question the relationship between prepackaged change problems and local realities. I observed that the introduction of the ‘Culture Change’ programme had mixed results from the beginning, due, in part, to differences among employees, depending on their location. For example, Cape Breton employees, based in a militant region of the province, were far less likely to accept any management change that did not address their fears and anxieties about the outcomes of change. In this case NSP’s universal approach to culture change exacerbated local difficulties.

Eventually, a focus on change as socially constructed led me to the notion of sensemaking, as I was interested in understanding how senior managers come to perceive a situation in a particular way, and how these disparate understandings of organizational change could be managed. For example, if there are competing notions of change and of the character of the organization, how can a specific situation of change be successfully managed? In attempting to answer this and other questions I was drawn to Weick’s (1995) theory of organizational sensemaking and the way it draws attention to the development of ‘knowledge’ as ‘socio-psychological frameworks’.

Beyond sensemaking: towards a theoretical framework of change management

While Weick’s (1995) sensemaking framework is a valuable tool for analysis of change and change management processes, it is limited in so far as it does not fully capture the richness of the social, organizational and socialpsychological contexts in which frameworks develop, are enacted and changed. Two key sets of questions in particular dogged my thinking as I pursued a sensemaking approach: one concerned the context in which sensemaking occurs and the second concerned the institutionalization of sensemaking decisions.

An example of the former type of question arose when I began to search for explanations of why NSP moved from a culture change programme to one of re-engineering. Here I was led, in part, to the view that while the ‘Culture Change’ programme – with its focus on humanistic values – meshed well with extant notions of the purpose of a Crown Corporation, reengineering – with its focus on efficiency – meshed well with the needs of a privatized company. This comparison led me to wonder about the broad contexts in which sensemaking occurs.

An example of the latter type of question arose when I began to search for explanations for why employees in the Cape Breton region were less willing to accept the ‘Culture Change’. Here, in part, I was led to the view that the proposed changes clashed with existing expectations and practices. This led me to wonder about the influence of established practices on ongoing sensemaking processes.

As I grappled with these questions I was drawn, respectively, to the work of Blackler (1992a, 1992b, 1993) and Mills (1988a, 1988b; Mills and Murgatroyd, 1991). Blackler’s work on activity systems, as I shall argue later, provides a more comprehensive explanation of the ‘social’ element in Weick’s notion of sensemaking while providing a way of conceptualizing a link between socio-cultural factors, discourse and organizational rules. In particular Blackler’s (1992a) use of Unger’s notion of ‘formative contexts’ (i.e., institutional and imaginative frameworks that shape the way people view reality) contributes to an understanding of the contexts in which sensemaking occurs and which influence sensemaking outcomes. Of equal importance is Blackler’s (1993) notion of ‘activity systems’ (i.e., a series of interrelationships which form a social-psychological context that mediates people in action), which he develops from the work of Vygotsky and Engestrom. The notion of the activity system contributes not only to an understanding of the social-psychological context in which sensemaking occurs but, through reference to differences that people bring to a situation, reveals the potential for ambiguity and change in a given situation.

Embedded in both the notion of formative context and of activity systems is the idea of rule-bound activity, but this remains underdeveloped in Blackler’s work. Here the work of Mills, centrally focused on organizational rules (i.e., broad sets of expectations and practices which serve to guide, direct and constrain people in action), contributes to an understanding of the organizational influences on sensemaking.

Summary

In summary, this book sets out to improve our understanding of the process and management of organizational change by (a) a strategic utilization of Weick’s (1995) sensemaking approach as both a theoretical framework for making sense of the data and, through its application, an argument for a sensemaking approach to change management; (b) undertaking a longitudinal case study of a major North American company involved in the introduction and implementation of two popular change programmes; and (c) drawing conclusions from the data to evaluate the strengths and limitations of the sensemaking model, in order to develop new ways forward for sensemaking and the understanding of change management.

2 Identifying cues

A history of Nova Scotia Power

History is one of a series of discourses about the world . . . [that] do not create the world . . . but they do appropriate it and give it all the meanings it has.

(Jenkins, 1994: 5)

[Historiogra...

Table of contents

• Front Cover
• Half Title
• Title Page
• Copyright
• Contents
• Foreword
• Acknowledgements
• 1 Introduction
• 2 Identifying cues: a history of Nova Scotia Power
• 3 Strategic sensemaking
• 4 The story of organizational change
• 5 Sensemaking and identity construction
• 6 Application of the sensemaking model to the Nova Scotia Power case
• 7 Making sense of sensemaking: suggestions for sensible modifications of the sensemaking model
• Appendix A
• Appendix B
• Notes
• Bibliography
• Index