Change Management Specialist (CMS)
Transcript of Change Management Specialist (CMS)
Change Management Specialist (CMS)
“An organization's ability to learn, and translate that
learning into action rapidly, is the ultimate
competitive advantage.”
Jack Welch
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By the end of this course
you will be able to:
Design and manage change programs,
persuade people to change and
respond to resistance to change
What is This Course About?
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Why Change?
By the end of this session
you will be able to:
Understand why some organizations fail
in change management
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Why Change?
The purpose of this course is to familiarize you with the
process of change management and help you understand
why some companies succeed in implementing change
while others fail.
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Why Change?
You will be introduced to a variety of theories on change
management and best practice guidelines derived using
comprehensive studies carried out by the scientific
community on change. You will learn what needs to be
done both behaviorally and structurally to make change
stick.
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Why Change?
This course helps you understand why some people are
afraid of change and resist it. You will be introduced to a
number of techniques that are shown to be effective to
overcome this resistance. You will also learn about
coaching, mentoring, motivating and various management
tools that can help you in the process.
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Why Change?
This session is about leadership and management,
especially change management. Main causes of
organization’s failure in terms of change management are
explored in this session. Different types of change are also
explained to help you predict how your own organization
might react to a changing environment.
You will also learn about two established theories on
change management and explore their application.
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Why Organizations Fail
Recent history shows that we have become good at
creating companies around new concepts, ideas and
technologies. Founders of these companies often have a
vision for the use of the technology or methods they
pioneer and use that vision to develop the company.
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Why Organizations Fail
Growth requires management
Success leads to more recruitment
Setting up factory and starting to sell
Acquiring offices
Founding a company
Mastering a new technology or method
An idea
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Why Organizations Fail
Once the company becomes more successful, it starts to
dominate the market. This in turn leads to more growth
which requires a more extensive organization.
This is when the risk of failure starts to increase.
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Why Organizations Fail
The organization’s priority changes to manage this growth
and turns its focus inwards. Members of staff are trained
mainly on management and not on leadership simply
because there is a huge demand for managing various
aspects of the organization as it grows. Employees learn
how to solve problems, how to plan and how to manage
resources but there is no emphasis on leading.
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Organizational culture increasingly resistive to change
Focus changes to revenue generation than making great products
Emergence of competitive middle managers; “Elastic Band”
Increased bureaucracy
Management focuses on problem solving rather than leadership
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Why Organizations Fail
The strong focus on management leads to excess
bureaucracy. Since the organization is dominant in the
market, sales still continue and this lack of leadership and
focus on external events goes unnoticed.
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Why Organizations Fail
Meanwhile, a new breed of competitive managers emerges
within the company. They are totally focused on increasing
efficiency and monitoring products and services in ever
more imaginative ways and totally lose track of external
opportunities or threats.
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Why Organizations Fail
There is no urgency in changing anything, because
managers have always been encouraged and trained to
maintain the current system. The focus is no longer on
making great products or solving a customer’s needs;
instead, it is about maintaining market share and increasing
revenue per customer to make more money.
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Why Organizations Fail
This inward managerial attitude leads to a damaging
culture which is resistive to changes and lacks leadership.
It easily misses the obvious trends in the market and
sometimes even denies their existence.
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Further cuts and change in senior management
Share price goes down
Announces various profit warnings; reduces number of staff
Too slow to change even when obvious
Ignores or actively denies new trends in the market
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Why Organizations Fail
Before long, a new competitor releases a vastly superior
product to the market by which time it is too late and too
difficult to turn the massive lingering corporate ship around.
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Why Organizations Fail
What follows is what we have heard many times; growth
forecast warning, downsizing, political infighting, share
price crashes and increased volatility, redundancies, a
series of management changes, still losing market share
and becoming increasingly irrelevant in the industry. In
extreme cases the company may go bankrupt and leave a
legacy of “how not to do it”.
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The Solution
The solution is to initiate change early and create a culture
of leadership. This is not about having one larger than life
leader that goes around convincing everyone of a new
vision. Large organizations are much too big for this.
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The Solution
Instead, many people need to get involved in leading the
change and this must be embedded into the culture of an
organization so it can always anticipate and react to market
changes.
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Is Change Inevitable?
From a certain view, change is neither emergent nor
planned. As an organization goes through cycles of growth
it needs to respond to the changing environment. The
following chart demonstrates an organizational life cycle
and how various crises may develop as the organization
grows (Greiner 1972).
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Is Change Inevitable?
Age of Organization MATUREYOUNG
LARG
ESM
ALL
Siz
e o
f
Org
aniz
ati
on
Phase 1 Phase 2 Phase 3 Phase 4 Phase 5
Crisis of
Leadership
Crisis of
Autonomy
Crisis of
Control
Crisis of
Bureaucracy Next
Crisis?
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Is Change Inevitable?
The above graph shows that as the organization grows, it
passes through 5 distinct phases. As each growth period
comes to an end, the organization goes through a short-
lived crisis. This trend forms the evolution and revolution
stages of a company as shown in the diagram. The flat
lines are the evolution and the zigzags are the revolution.
A typical life cycle pattern consists of the following (Clark
1994):
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Life Cycle
The Entrepreneurial Stage
The Collective Stage
The Formalization Stage
The Elaboration Phase
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The Entrepreneurial Stage
• Focus is on manufacturing products or providing the
service.
• Key strategy is to survive.
• Success brings growth and the need to recruit.
• Employees need managing and organizational strategy
becomes more complex.
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The Collective Stage
• The organization is more formally shaped into
departments.
• Professional managers are recruited who share the
same vision as leadership.
• Further growth requires more management control and
delegation.
• Responsibilities are well defined and there is a stronger
sense of autonomy as it increases efficiency.
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The Formalization Stage
• Systems of communication and control become more
formal.
• Bureaucratization occurs.
• Systems of rewards and incentives, salary structures,
and organizational hierarchy are formalised.
• Low level mangers become more autonomous as the
organization grows.
• There is a differentiation between strategic management
and management required to implement policy.
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The Elaboration Phase
• Strategic change expected.
• The organization may reach a plateau or may even show
the first stages of decline.
• Middle managers may need to learn new skills to
achieve change.
• This stage may include rapid turnover and replacement
of senior management.
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Types of Change
Companies don’t always go through change uniformly and
this can have a significant impact on the way they handle
change or anticipate it. The following are the most popular
patterns of change (Arnold et al. 1998).
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Smooth Incremental Change
• Change evolves slowly and follows a clear path.
• The changes are minor and people can cope with them.
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Smooth Incremental Change
Time
HIG
HLO
WR
ate
of
Change
Range of
Stability
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Bumpy Incremental Change
• There is some degree of predictability in the external
environment but it is difficult to predict frequency,
duration or magnitude of change.
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Bumpy Incremental Change
Time
HIG
HLO
WR
ate
of
Change
Range of
Stability
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Discontinuous Change
Discontinuous change is a radical change and a significant shift
away from the way currently things are done. This can be as a
result of a crisis in the external environment, possibly affecting
the whole industry and not just your organization. Alternatively,
the crisis could be due to actions of a competitor.
The key point is that the organization is under threat and needs
to act fast, and change fast to accommodate.
Because of the urgency, management is likely to provide
instructions for change rather than consult for a way forward.
The aim is short-term results and compliance. Once the crisis is
over, management can proceed to gain long term commitment
and anchor the change into organizational culture.
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Discontinuous Change
Time
HIG
HLO
WR
ate
of
Change
Range of
Stability
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Punctuated Equilibrium
This illustrates situations where periodically there is a
sudden burst of activity. It suggests that the organization
has carried on with the change within the range of stability,
though every now and then people had to move out of their
comfort zones to respond to various demands in the market
and the environment.
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Punctuated Equilibrium
Time
HIG
HLO
WR
ate
of
Change
Range of
Stability
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Continuous Transformation
As communication technology has significantly changed
the environment and has introduced dramatic changes, it
seems that the incremental punctuated model of change
will no longer be sufficient to keep pace. Instead, a
continuous transformation model is proposed where an
organization needs to proactively reinvent itself and initiate
change while responding to environmental changes. It
means that rate of change will frequently go out of the
range of stability as the organization aims to stay on top.
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Continuous Transformation
Time
HIG
HLO
WR
ate
of
Change
Range of
Stability
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Leadership versus Management
Management is different from leading. Management is the
set of processes used to run a complicated mix of people
and technology smoothly. In contrast, leadership is the set
of processes that creates an organization or leads it to
change and adopt according to circumstances.
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Leadership versus Management
When it comes to change management, the distinction is
critical. Transforming an organization depends a lot more
on leadership than it does on management. Unfortunately,
many want to manage change while in practice they should
focus on leading the organization through change.
Here is how management compares to leadership:
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Leadership versus Management
Management
• Organising
• Planning
• Budgeting
• Staffing
• Problem solving
• Controlling
• Resource management
• Providing policies and procedures
• Delegating
• Monitoring
Leadership
• Vision
• Strategy
• Producing change to achieve the vision
• Influence direction and thought process
• Create teams
• Create coalitions that understand the change
• Motivating and energizing
• Overcoming bureaucratic barriers
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Two Theories of Change
There are two archetypes of theories of change as
demonstrated by Michael Beer and Nitin Nohria (Price
2009). They are known as Theory E and Theory O.
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Two Theories of Change
Theory E• Change based
on economic value.
Theory O• Change based
on organizational capability.
HARD APPROACH SOFT APPROACH
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Theory E: Change based on economic value.
– This is the kind of change that leads to headlines. It involves
substantial redundancies, heavy use of economic incentives,
downsizing, cost saving, selling parts of the business to save
costs and so on.
– It is also known as the “hard” approach to change.
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Theory O: Change based on organizational
capability.
– Here, the goal is to develop a corporate culture through
organizational training and learning. It is a long term approach
and involves self-reflection, feedback, implementing more
changes and gradually developing a new corporate culture with
new ways of working.
– It is also known as the “soft” approach to change.
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Theory E Theory O
Aims
Increase and
maximise
shareholder value
Improve
organisational
capability
Focus
Focus on cost
saving, efficiency
and systems
Focus on corporate
culture, attitudes and
employee mentality
ResultsFocus on short-term
immediate results
Focus on long terms
goals
Increase and maximize
shareholder valueImprove organizational capability
Focus on cost saving,
efficiency and systems
Focus on corporate culture,
attitudes and employee mentality
Focus on short-term
immediate results without
which the organization may
not survive
Focus on long terms goals to
change course and end up with
persistent gains
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Theory E Theory O
LeadershipTop down change
management
Bottom up change
management
ProcessPlan specific
programs
Experiment and
evolve
Top down change management Bottom up change management
Plan specific programs Experiment and evolve
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Theory E Theory O
Use of
Consultants
Consultants analyse
the organisational
problem and
provide and shape
solutions
Consultants provide
support to the
management and
employees come up
with their own
solutions
Rewards
Provide financial
incentives to
motivate
Use commitment and
increased
responsibility as
incentives motivate
Consultants are used to analyze
the organizational problem and
provide and shape solutions
Consultants provide support to the
management and employees to
come up with their own solutions
Provide financial incentives to
motivate
Use commitment and increased
responsibility as incentives
motivate
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Two Theories of Change
Theory E and O are not always used in isolation; they can
be combined to achieve better results. The combination
allows the organization to quickly cut costs and increase
efficiency and therefore avoid immediate financial disaster
or serious cash flow problems.
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Two Theories of Change
Meanwhile, the organization can embark on a corporate
cultural change to shift its focus to more profitable areas
and respond to the changing environment by permanently
modifying the way they work.
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How Change Affects People
By the end of this session
you will be able to:
Understand how people handle change
and why their reactions matter
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How Change Affects People
This session explores various ways in which people
respond to change. This helps you understand what
people are going through as a result of the change and
allows you to plan accordingly to provide support, training,
mentoring, coaching and resources.
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How Change Affects People
You will also learn about how ideas spread which further
helps you see how people react to these new ideas which
again can help you to plan ahead as you go through
different stages of change.
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How We Respond to Change
The following model known as the “The Personal Transition
Curve” was developed by John Fisher. It captures how
individuals deal with change. This is a useful model for
change managers and those who need to be aware of the
consequences of change so they can provide support as
the change unfolds.
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Anxiety
Thought:
• What is going to happen?
Concept:
• Not knowing how to cope with future change.
• Becoming anxious because the events lie outside of an
individual’s control.
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Time
HIG
HLO
WA
ccepta
nce
Finally, something is going to change.
Anxiety
Happiness
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Happiness
Thought:
• Finally, something is going to change.
Concept:
• Anticipating change and positively looking forward to it,
hoping that things will progress forward.
• Confirmation of thoughts that something was indeed
wrong and needed change and hence welcoming the
change.
• This stage can lead to unrealistic expectations if not
managed well.
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Time
HIG
HLO
WA
ccepta
nce
Can I handle this?
Anxiety
Happiness
Fear
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Fear
Thought:
• Can I handle this?
Concept:
• There is a fear that something significant is going to
change and will have an effect on everything. How
would the individual handle this?
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Time
HIG
HLO
WA
ccepta
nce
This is big and can disrupt my life.
Anxiety
Happiness
Fear
Threat
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Threat
Thought:
• This is big and can disrupt my life.
Concept:
• The change is perceived as a threat to lifestyle habits or
a disruption to the normal state of affairs in the current
environment. The individual is afraid to end up with
limited choices in the future or how the change can
impact others’ perception of him.
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Time
HIG
HLO
WA
ccepta
nce
Did I really behave that way?
Anxiety
Happiness
Fear
Threat
Guilt
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Guilt
• Thought:
• Did I really behave that way?
• Concept:
• The individual compares his past actions and reactions
and explores alternative interpretations. The self-
awareness and discovery can lead to guilt, causing the
person to understand the extent of what was wrong and
how it had impacted others.
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Time
HIG
HLO
WA
ccepta
nce
This is hopeless.
Anxiety
Happiness
Fear
Threat
Guilt
Depression
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Depression
• Thought:
• This is hopeless.
• Concept:
• The individual is de-motivated and confused. He cannot
see how he can fit into this new future. The individual
does not identify with the change and is somewhat lost.
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Time
HIG
HLO
WA
ccepta
nce
This is not for me. I cannot be like this.
Anxiety
Happiness
Fear
Threat
Guilt
Disillusionment
Depression
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Disillusionment
• Thought:
• This is not for me. I cannot be like this.
• Concept:
• The individual loses motivation and is in despair. His
values and beliefs are disrupted and are incompatible
with those of the organization or what the change
dictates. The individual is unmotivated and gradually
withdraws by providing minimum effort, constantly
criticising or complaining. The individual may also resign
to fully disengage from the change.
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Time
HIG
HLO
WA
ccepta
nce
I cannot accept this. This is not right.
Anxiety
Happiness
Fear
Threat
Guilt
Depression
Hostility
Disillusionment
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Hostility
• Thought:
• I cannot accept this. This is not right.
• Concept:
• The change has not been accepted and is in constant
friction with the individual’s current beliefs. The new
processes are either ignored or are actively undermined.
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Time
HIG
HLO
WA
ccepta
nce
There is no Change.
Anxiety
Happiness
Fear
Threat
Guilt
Depression
Disillusionment
Hostility
Denial
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Denial
• Thought:
• There is no Change.
• Concept:
• The change is not accepted and its presence denied.
The individual falls back to old processes and habits
ignoring the need for change or evidence that supports
ideas that are contrary to his beliefs.
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Time
HIG
HLO
WA
ccepta
nce
I can see how I would fit into this future.
Anxiety
Happiness
Fear
Threat
Guilt
Depression
Disillusionment
Hostility
Denial
Gradual
Acceptance
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Gradual Acceptance
• Thought:
• I can see how I would fit into this future.
• Concept:
• The individual can see how to handle the change and
how it can work for him. He is beginning to see a future
which is better as the result of the change.
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Time
HIG
HLO
WA
ccepta
nce
This is great. The change is working.
Anxiety
Happiness
Fear
Threat
Guilt
Depression
Disillusionment
Hostility
Denial
Gradual
Acceptance
Moving
Forward
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Moving Forward
• Thought:
• This is great. The change is working
• Concept:
• The individual can see how the change can directly
benefit him and how to exploit these changes to move
forward both individually and also as an organization.
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Why Reaction to Change Matters
The Personal Transition Curve is a great tool in recognizing
what is needed at each stage. As a manager who is
leading the change, you need to be aware that most people
may not clearly understand which part of the curve they are
in.
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Why Reaction to Change Matters
It is your job to recognize this, communicate appropriate
information and provide support to help them through these
stages.
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Why Reaction to Change Matters
As you may have noticed, many of the stages on the
transition curve are highly emotional. Management must
take steps to address these emotional upheavals as they
occur and control their impact in order to minimize the
spread of negativity throughout the organization.
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Why Reaction to Change Matters
Another important concept is that different people transit
through the curve at different speeds. Hence, you will end
up with a team where each person thinks slightly differently
about the change and hence behaves differently. This is
why the management needs to provide a tailored solution
to accommodate various needs and reassure the staff
accordingly.
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How Ideas Spread
Another useful classification of how people react to change
and how ideas spread through culture is the Diffusion of
Innovations theory by Everett Rogers.
Diffusion is a process where a change or an innovation is
communicated in a social network through various
channels over time.
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How Ideas Spread
Earl
y
Majo
rity
Time
Innovato
rs Earl
y
Adapto
rs Late
Majo
rity
Laggard
s
2.5%
13.5%
34% 34%
16%
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Innovators
– Willing to take risks
– Slightly radical
– Crave change and innovation
– Cope well with uncertainty
– Well informed with multiple sources of information
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Early adopters
– Gatekeepers of new ideas into a system
– The “opinion leaders”
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Early majority
– Take more time to adopt
– Can be influenced by early adopters
– Seldom hold a position of “opinion leadership”
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Late majority
– Sceptical to change
– Might adopt as a result of increased pressure from peers
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Laggards
– Isolated from social network
– Will be the last to change
– Suspicious of change agents
– Show little or have no “opinion leadership”
The adoption of innovation or change follows an “S Curve”
when plotted over time. Here is an example:
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Earl
y M
ajo
rity
Time
Innovato
rs
Earl
y A
dapto
rs
Late
Majo
rity
Laggard
s
% o
f
Popula
tion
100%
0%
50%
CH
ASM
@ 1
6%
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How Ideas Spread
A related area of work to diffusion of innovation is the
epidemics of memes. Malcolm Gladwell, in his book “The
Tipping Point” defines tipping point:
“The tipping point is the magic moment when an idea,
trend, or social behavior crosses a threshold, tips, and
spreads like wildfire.”
The book discusses a variety of conditions that contribute
to this and is a great read for anyone interested in
engineering a tipping point for the idea of change.
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Adoption Stages
Individuals go through 5 stages during the adoption
process:
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Adoption Stages
Finalises Decision
Confirmation
Considers
Use
Seeks Info to
Understand Benefits
Implementation
Weight Concepts
Decides?
Decision
Interested
Actively Seeks Info
Persuasion
Exposed to
Innovation
Not Inspired
Knowledge
ADAPT
REJECT
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Knowledge
– An individual is exposed to the innovation or new idea, but lacks
knowledge
– Is not inspired to find more information about it.
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Persuasion
– Has become interested in the innovation
– Actively seeks information
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Decision
– Weighs the concept of change and considers advantages and
disadvantages of using it
– Decides to adopt or reject
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Implementation
– Considers implementing the change or innovation to various
degrees
– Seeks information for better understanding
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Confirmation
– Finalizes decision to continue using the innovation and may end
up with total commitment to use it to its full potential
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