Journal of Change Management,

Vol. 4, No. 2, 155–183, June 2004

Leading and coping with change

SALLY WOODWARD & CHRIS HENDRYSir John Cass Business School, London, UK

ABSTRACT Change process models, developed in the tradition of Lewin, tend to emphasize peopleas resisting change, portray leading and coping with change as discrete entities, and reify theorganization. In contrast, this article reports on findings from two descriptive surveys examiningleading and coping processes. Attitudes, opinions and organizational practices were investigated toidentify and describe variability in change in financial service institutions in the City of London asled by top managers and as experienced by employees. A ‘leading and coping with change’framework that emphasizes the social process dynamics of change is developed which managers canutilise as a conceptual tool to guide action. This is built around the finding that change leaders arethemselves part of the process, and that the judgmental and cognitive processes which employeesengage in, in their relationship with those leading change, is crucial.

KEY WORDS: change management, coping process, leadership, financial services

Introduction

Managers and consultants have access to an extensive body of literature onorganizational change, yet a large number of change management programmes stillappear to fail. This suggests a need to reconsider how our chosen perspective affectsour theories, research and practice. Many change process models (Beckhard andHarris, 1977; Tichy and Devanna, 1986) have been developed in the tradition ofKurt Lewin’s (1951) work, which relied on field theory. In that approach, a changesituation involves moving from a current condition to a desired condition, and thesituation is a ‘field’ in which there are forces to facilitate change and restrainingforces. The current situation is held in check or ‘quasi-equilibrium’ by these twosets of forces. The change process aims to introduce (temporary) instability and, inthe traditional organizational development approach, is driven from the top.

In this article, we present a ‘leading and coping with change’ framework that isgrounded in a relational perspective. We seek to generate a different discourse onchange management that conceptualizes leading and coping with change as aconjoint process which, when positive, increases the learning capacity oforganizations. We believe that this revised perspective will help managersincrease the success of change management programmes.

1469-7017 Print/1479-1811 Online/04/020155–29 # 2004 Taylor & Francis LtdDOI: 10.1080/1469701042000221687

Correspondence Address:Chris Hendry, Sir John Cass Business School, 106 Bunhill Row, London EC1Y 8TZ, UK.

In deriving this framework, we utilize findings from two descriptive surveys,which aimed to define, for people working in the financial services sector, therange of skills and competencies required to lead change and those needed toeffectively cope with change. Structuring these findings within an organizationalchange model (Beer et al., 1990), we highlight psychological relations throughsetting our systematically derived perceptions in juxtaposition with sequencinginterventions. Too often, attention has been paid exclusively to skills in managingchange, with little regard for the skills needed to absorb change and limits toadaptability. When change processes require fundamental shifts in the wayorganizational members think and act, the consequences of change can test to theutmost the organization’s capabilities and resources. Moreover, when people havebeen subject to substantial change already, or are operating in an uncertainenvironment that affects their future prospects, they may rapidly reach the limits oftheir capacity to absorb and respond to more change (Sikora et al., 2002). What isneeded, therefore, is a dynamic process model to show how change cansuccessfully be absorbed.

This article highlights some of the dynamics that exist in leading and adaptationprocesses, which result in the success or failure of change programmes. Formalchange leaders are themselves part of the process, and the judgmental andcognitive processes that employees engage in, in their relationship with thoseleading change, is crucial. In a changing workplace, employees are continuallyevaluating what is going on and what is its significance for them. Coping strategiescome into play when employees think the demands being placed on them tax orexceed their resources; these strategies will be influenced by organizationalclimate. Problems arise when those leading change underestimate or misinterpretthe requirements needed to support change.

This article is structured in six sections. Following this introduction is a shortdiscussion of the existing literature on leading and coping with change, included topoint out issues that we believe are particularly relevant for explaining the conjointrelations between leading and coping, particularly through the notion ofdistributed leadership. The third section details findings of an empirical studyconducted in the City of London’s financial services sector involving two relatedsurveys: one questioning those responsible for initiating organizational changeand the other questioning those experiencing organizational change: fivesubsections sequence the findings according to how change is experienced.Following this, a framework for ‘leading and coping with change’ is presented toillustrate how change may be successfully absorbed by an organization. Thisframework builds inferentially on the Beer et al. (1990) model based on findingsfrom the empirical study. We discuss the key elements of the framework in thelight of prior literature in the fifth section, and in the final section, we drawconclusions and make recommendations that, we trust, may lead to more effectivechange management.

Literature review

For the purposes of this article we do not present a comprehensive review of theliterature on managing change. Rather, we use existing literature on leading and

S. Woodward and C. Hendry 156

coping with change to highlight issues that we believe are particularly relevant forexplaining the conjoint relations between leading and coping in the process ofimplementing change.

Leading change

In spite of the distinction that management is tasked with creating stability whileleadership seeks to create change (Zalenick, 1977) much confusion abounds, withacademics often using the term ‘leadership’ to refer to quite different concepts. Ithas been argued that most approaches to leadership focus on the ‘leader’ becauseof an underlying conceptual framework that is based on a feudal paradigm‘pointing to someone who occupies a high position’ (Barker, 1997: 347).Managerial leadership is therefore underpinned by the notion of leader as

a giver of direction and as a manipulator of will, who frames and solves specific managerial orsocial problems . . . resulting from the need for an imposed order and from the need toaccomplish specific goals. (Barker, 1997: 350)

However, leadership under this view cannot work in situations where goals are notspecific, where imposition of order is ineffective, and where there is increasinginternal and external complexity.

Similarly, over the past 20 years or so, there has been an explosive growth in thepromotion of ‘transformational leadership’ (Burns, 1978; Bass, 1999), with arecent analysis bringing into question some of its rubrics (Tourish and Pinnington,2002) and the authors arguing for a more inclusive and participatory model of theleadership process. Thus, alternative perspectives have been proposed to thetraditional hierarchical and bureaucratic form of organization and technocratic orvisionary leadership.

In organizations that are undergoing change it is difficult, if not impossible,to define and resolve all eventualities. Hence, adaptive situations are not amenableto leader-driven solutions (Heifetz and Laurie, 1997). Rather, all members need todeal with problems as they arise. Leadership, in this perspective involves alearning strategy. Indeed, building a learning capacity within the organization canbe seen as key to a theory of change, and it is helpful to reframe leadership in termsof ‘managers who foster communities of practice’ (Hendry, 1996: 632).

This kind of managerial leadership involves relationships between managersand their reports. People are engaged, given support and resources and, thereby,feel they have some control over changing situations. Knowledge is createdthrough the transformation of shared experience in performing new activities.Those involved come to understand the new requirements, and new rules ofrelating become tacit as time progresses (Hendry, 1996). Additionally, the conceptof ‘distributed leadership’ usefully emphasizes that leadership functions are bestperformed by those who have the necessary knowledge and skills, and that peopleother than managers, can also exhibit leadership behaviours. Indeed, Gronn (2002)argues that conventional views of leadership cannot easily accommodate eitherchanges in the division of labour in the workplace or new patterns ofinterdependence and co-ordination. Rather, we should view leadership as aprocess in which the key defining criterion is united agency.

157 Leading and coping with change

Nevertheless, some managers and staff are better able to lead and cope withchange than others. Poor managerial leadership can bring about additionalpressures and, therefore, being sensitive to the coping problems of both managersand staff is an important aspect of change management.

Coping with change

While all employees need to accommodate and adapt as organizations changetheir internal processes to meet external complexity, the transition process can bedifficult where change is radical rather than incremental (Nicholson, 1990;Bridges, 1992). Organizations changing fundamentally and rapidly can subjectpeople to additional, cumulative pressures and demands. These pressures can betranslated into stress, and there is evidence that the cost of occupational health andstress to organizations is considerable (CBI, 2003).

‘Coping’ is proposed as the key to people maintaining well-being andsatisfactory performance. Recent definitions view stress as arising from theinteraction between person and situation (Furnham, 1997), with a prominentmodel being that of Lazarus and Folkman (1984) and subsequent developments(Lazarus, 1991, 1999). This model suggests that the potentially stressfulemployee–work environment relationship is mediated by two factors—cognitiveappraisal and coping—and that these factors influence immediate and longer-termoutcomes. In the changing workplace, employees are continually evaluating whatis going on and what the significance for them is. They assess whether changeshave any relevance for their well-being, and if so, in what ways. Such evaluationsare of two kinds: A primary appraisal: What will I gain? What will I lose? Whatare the potential benefits or harm to me? Is what is happening irrelevant, can Iignore it?; a secondary appraisal asks: What can I do to overcome or prevent thenegative effects? What can I do to improve my prospects for benefiting fromchange? What coping options might be worth adopting? What are the likelyconsequences? Will I accomplish what I want to achieve?

In addition, employees reappraise the outcomes that have been achieved as aresult of their coping strategies within a changing environment, learn of theconsequences and make further appraisals. Coping is seen, therefore, as

. . . constantly changing cognitive and behavioral efforts to manage specific external orinternal demands that are appraised as taxing or exceeding the resources of the person.(Lazarus and Folkman 1984: 141)

Moreover, there are two functions of coping—dealing with a problem that hasarisen (problem-focused coping) and regulating associated emotions (emotion-focused coping). Different coping approaches involve regulating emotions in apositive or negative way (Latack and Havolic, 1992; Kahn and Cooper, 1993).One example of problem-focused coping is ‘innovative coping’ (Bruce and West,1996). Innovative coping is an outwardly-directed form of coping strategy. Theimplication is that people can change, in an active way, an aspect of a situation thatis seen as stressful. This means that employees can lead, either individually or asteams, and achieve unit/department goals more effectively, so the organization canalso become a beneficiary. Coping can also be proactive as well as anticipatory

S. Woodward and C. Hendry 158

(Aspinwall and Taylor, 1997: 417) through ‘efforts undertaken in advance of apotentially stressful event to prevent or to modify its form before it occurs’. Suchnotions of coping emphasise the agential, rather than reactive, nature of mutuallydefining person–situation transactions.

Change in UK financial services

Although the UK financial services has been a successful sector, contributingpositively to the economy (IFSL, 2003), and the City of London has manycompetitive advantages (Corporation of London/LDS, 1999), the sector has beenundergoing regulatory, technological and structural change over the past twodecades (Morgan and Knights, 1997; Taylor and Morrison, 1999). Currently,financial institutions are subject to ever increasing levels of competition (Knightsand McCabe, 1998; Flier et al., 2001), that are driving the need for yet morechange (Foss and Stone, 2002; La Croix et al., 2002; Bradley and Stewart, 2003;O’Brien and Meadows, 2003).

Successful change management has become an increasingly important corecompetency for financial institutions. Despite more than two decades of change,there exists strong evidence of difficulties in achieving change managementincluding: an inability to gain sustainable strategic advantage through IT/IS(Fletcher and Wright, 1996; Bloomfield et al., 1997), failures of TQM imple-mentation (Longbottom and Zairi, 1996; McCabe and Wilkinson, 1998; McCabe,2000), uncertainties about business process re-engineering (McCabe and Knights,1999), a ninefold increase in complaints to the Banking Ombudsman and atrebling of complaints to the Building Societies Ombudsman (McCabe et al.,1998).

Changes that have already affected peoples’ experience of employment are animportant complicating factor. Performance, expectations, and attitudes towardscurrent and future change will be influenced by levels of ‘self-efficacy’, whichinfluence beliefs about competency to perform (Wood and Bandura, 1989), and byscepticism and cynicism resulting from experiences of earlier, unsuccessfulchange initiatives or ineffective leadership practices and lack of participation indecisions (Anderson, 1996; Wanous et al. 2000).

Empirical study

To a large degree, change is in the eye of the beholder. Those who see themselvesas creating organizational change as an intentional process (i.e. top managementformally leading change) will have a different perspective to those who are on thereceiving end of change (Kanter et al., 1992). Similarly, case study research showsthere is no one formula for managing change. While many prescriptions,guidelines and models exist, managers responsible for executing the changes areselective in the way they use these ideas (Storey, 1992).

To accommodate these different perspectives in our research on changemanagement in the City of London’s financial services institutions, we undertooktwo surveys—one involving senior management personnel responsible forinitiating organizational change, the other covering all other employees (including

159 Leading and coping with change

managers) at various levels who were executing and/or experiencing change. Theaims of the study were (1) to define the skills and attitudes required to lead changeand those needed effectively to cope with change and (2) to develop a model toshow how change is absorbed within the organization

We organize the findings in five sections below, which have been sequenced inthe following way. In the first part, since people continually seek to make sense ofwhat is happening in their organization and its sector, we detail what employeesand senior managers see as the major external pressures for change, their formalleaders’ responses, and how these changes have affected them. Then, astraditional, routinized ways of organizing and performing are disrupted, we showin parts two and three how people are coping and what resources, in terms of skillsand competencies, are said to be needed to perform well in this changing context.We then go on, in part four, to describe the particular qualities that changemanagers might seek to cultivate in the light of employee needs. In the final part,we report what organizations do to support people in the change process, and howsenior managers and employees view this. The results provide us with valuableinsights into why many change management initiatives fail to bring aboutsustainable change and how these failings might be addressed.

Change and its impact on individuals

Employees perceived the major external pressures for change, during the latterpart of the 1990s, to have been increased competition, changing customer needs/expectations and technological developments (see Table 1). This is not surprising,and fits with most accounts of financial services and other sectors (see Ezzamelet al., 1996; Taylor, 1999; Woodward et al., 2000).

In response, city organizations have been adopting a variety of strategies andmeasures to meet these challenges. For example, employees saw an increasingemphasis on cost measurement and reduction, improved profitability andshareholder value, service to the customer, and the introduction of new productsand services (Table 2). The changes implemented in order to achieve these

Table 1. Triggers for organizational change (N ¼ 198)

Trigger %

Increased competition 67

Changing/new customer needs and expections 55

Technological developments 43

Internationalization/globalization 35

Disappointing financial performance 31

Legislation/regulation 31

New CEO 26

New competitors 25

Change in ownership 21

Industry in recession 12

Other 15

S. Woodward and C. Hendry 160

objectives have impacted dramatically on people, with two thirds experiencingchange in their departments, half seeing changes in work systems, two in fiveexperiencing change in organizational structure, and a third of organizationsreducing numbers employed (Table 3). Most employees (7 in 10) found theirworking environment to be ‘very pressured’, and while 2 in 5 said ‘I can performeffectively without any concerns’, 3 in 5 said ‘I can perform effectively, but it putsa lot of pressure on me’. There exists in the workforce, therefore, a sizeableproportion who are working in pressured environments but who seemunconcerned by it. Nevertheless, this pressured environment may be taking itstoll, and people may be unwilling to admit to being unable to cope. This has beendescribed as the ‘John Wayne’ syndrome (James and Arroba, 1999) where peopleare likely to accept the extra demands being placed on them and say ‘I can cope’up to cracking point.

Table 2. Management has increased emphasis on a number

of factors (N ¼ 198)

Factor %

Cost measurement and reduction 64

Improved profitability and shareholder value 63

Service to the customer 59

Introducing new products/services 56

Removing non-profitable products/services 41

Sales/marketing 41

Business growth 39

Quality improvements 38

Productivity improvements 33

Divesting non-core activities 23

Other 9

Table 3. What are the major work/job changes that have affected you?

(N ¼ 198)

Change %

Changes in structure of department/unit 64

Introduction of new technology/work systems 50

New people brought in 40

New reporting structures 40

Reduction of staff 35

Focus on meeting targets 32

Different working relationships with people at work 30

Different products/services your department/unit is offering 29

Introduction of new ways of working 27

Movements to a new location 17

Other 15

161 Leading and coping with change

Employee coping strategies

Employees were asked to indicate their willingness to respond to further changesin their job and work environment. A majority of those surveyed appeared to beready to welcome change: ‘Change is part of life, and I feel positive about it’ (3 in5), with only a quarter responding to the effect that ‘Change is part of life which Ineed to grin and bear’.

Since coping is all about meeting demands and working within the constraintsof the situation, particularly as presented in problems, employees were asked tospecify the main problems they had to cope with in the changing environment.Stress at times of change (according to those surveyed) arose from five factors(comprised from clustering reported problems):

. increased accountability but reduced resources;

. a focus on tasks with a corresponding neglect of employees;

. feelings of insecurity and uncertainty in roles and direction;

. other employees not coping and lacking skills to adapt;

. managers themselves failing to cope, and employing poor coping strategies.

When asked what personal coping strategies they found most helpful,employees detailed a variety of strategies—some proactive, others moreclassifiable as denial or avoidance (see Table 4).

Skills and competencies needed for coping with change

Adoption of negative or positive coping strategies appears to be influenced by theway employees assess the balance of demands and resources in the changing

Table 4. What personal strategies do you find helpful in coping with these problems?

Extent to which this is a helpful coping strategy

Strategy

Very

helpful (%)

Quite

helpful (%)

Not at all

helpful (%)

Looking at things objective/unemotionally 61 34 5

Deal with problems as soon as they arise 53 42 5

Deliberately separate home and work 51 35 14

Plan ahead more 45 40 15

Do not ‘bottle things up’ 42 47 11

Develop stable relationships 42 47 11

Accept the situation and try to make the most of it 35 49 16

Recognize my own limitations 31 54 16

Talk with supervisor/manager/colleagues 28 52 20

Talk with understanding friends/family 28 41 31

Try to get things done in a different way 23 57 20

Take calculated risks 19 42 39

Generally ignore what’s happening 6 11 83

S. Woodward and C. Hendry 162

employee–work environment relationship. Hence, coping strategies are influencedby the availability of resources. Skills and competencies are a major personalresource. Employees specified a number of skills and competencies they foundespecially helpful in absorbing and coping with change:

. communicating with others holding different perspectives (since nowadayspeople work in teams for many activities);

. organizing work and managing time effectively (in response to increased jobscope and the need to meet a variety of objectives);

. assimilating and interpreting information (to identify significant informationand filter out irrelevancies);

. dealing with people (since financial and professional service organizationsdeliver many of their services through people);

. innovative problem solving.

As well as specifying these critical skills, employees rated a number of personalqualities and abilities as ‘very important’. Between two-thirds and three-quartersrated self motivation (to cope with empowerment initiatives); accuracy of judge-ment (to achieve stretching targets); an understanding of customer needs (asorganizations become more service-oriented); commercial awareness (as businessesbecomes more complex); an ability to influence and negotiate; an enquiring, livelymind; and a positive attitude towards change as ‘very important’ (see Table 5).

Senior managers suggested the key personal skills or competencies to performwell in a constantly changing environment should include a commitment tochange, an understanding of the changing situation, an ability to ‘fit’ the changedenvironment, and a variety of personal qualities to help this. This is perhapsnotable for being less concrete in behavioral terms, and imbued with the ‘feudalparadigm’ of leadership (Barker, 1997) that assumes conformity to the leader’sintentions.

Table 5. Importance of personal abilities/qualities in or changing environment (N ¼ 198)

Importance

Personal abilities/qualitiesVery

important (%)

Quite

important (%)

Not at all

important (%)

Self motivated 76 24 0

Accuracy of judgement 68 31 1

Understanding of customer needs 66 30 4

Ability to influence and negotiate 65 31 4

Commercial awareness 64 34 2

Positive attitudes towards change 62 35 3

Enquiring/lively mind 60 38 2

Open and receptive to others’ views 58 40 2

Confident and able to sell one’s skills 58 40 2

Considerate of others 47 45 8

163 Leading and coping with change

Leading change skills and competencies

Much of the pressure created by organizational change may be alleviated if thoseleading change focus on people aspects in addition to strategy and otherorganizational elements. However, this crucial element is still ignored by asizeable minority, with a third of senior managers acknowledging that peopleaspects were ignored in their change programmes.

Only 1 in 5 employees rated management as ‘very able’ in implementingorganizational changes. Nearly all the rest were equally divided in their responses,giving a rating of ‘average ability’ or ‘poor’ (although acknowledging theirmanagers were probably no worse than others). Despite the low rating,nevertheless, employees seemed to be quite sympathetic and appreciative of thedifficulties involved in leading and managing change.

Employees were asked to specify the ways in which those leading changesometimes create difficulties or make it hard for employees to absorb or adapt tochange. The key areas which employees saw as barriers to absorbing and copingwith change were clustered into six categories:

. communicating (not being kept informed, receiving conflicting messages,wanting to understand but not being given explanations);

. the change process itself (when change is perceived as happening too slowlyor too fast, when leaders are seen to hold unrealistic expectations, or whenchange is managed with incorrect sequencing);

. relationships (including situations when change leaders seem remote andisolated from employees, do not exhibit constructive attitudes andbehaviours, or behave in an autocratic fashion);

. consultation (when employees do not feel they are informed or consulted, andwhen staff needs and ideas are disregarded);

. skills and experience (when change leaders are seen as lacking the requiredskills, abilities and experience, and when the change leader lacks credibility);

. motivation for change (when there appears a lack of involvement ormotivation for change at the top, or among senior managers elsewhere in theorganization).

Employees were also asked what managers could do that was most helpful toenable them to cope with change. Of 19 items compiled from the traditionalchange management literature, all but one was rated ‘very helpful’ or ‘quitehelpful’ (Table 6).

Senior managers identified similar, although fewer, competencies—strongleadership and clarity of purpose/mission together with generating enthusiasm,involving employees, and communicating well. Again this is notable for beingshorter on concrete behaviours and having a ‘top-down’ perspective.

Organizational support

Finally, employees were asked to what extent they agreed with the statement:‘Adequate problem prevention and support has been provided to employees to

S. Woodward and C. Hendry 164

help them cope with changes introduced into this organization.’ While amajority of the senior managers agreed with this statement, less than 1 in 4employees did. There is, therefore, a discrepancy between how each sees thelevel of support provided. For example, a majority of employees reported theirorganization ‘provided them with sufficient authority to get their work doneeffectively’, and there existed ‘good working relationships’, but for otherfactors, only a minority reported availability of support (Table 7). The mostcommon support mechanisms reported by senior managers, on the other hand,included discussion with employees about career development prospects sothey could be properly matched with their new job responsibilities; givinginformation and/or consultation as to where the company is heading, and whatemployees’ roles and responsibilities will be; skills training; redesigned payand compensation packages; and steps to ensure alignment of structures andsystems.

Comparing this with what employees say, we note that managers andemployees agree about some of the important things, but disagree on howadequate the provision of these is. Ebadan and Winstanley (1997) found a similardiscrepancy in the provision of career counselling in their study. Managers alsostress relatively few sources of support. Finally, employees emphasise almostentirely those things that give them a sense of autonomy and control, whilemanagers emphasize the things which they, as managers, control. This followsthe pattern whereby employees identify a wider range of useful behaviours, whilesenior managers express a traditional model of leadership.

Table 6. Key skills/competencies needed by those leading change (N ¼ 198)

Extent to which this helps others to

adapt/absorb change

Skill/Competency

Very

helpful (%)

Quite

helpful (%)

Not at all

helpful (%)

Communicate vision/direction to others 93 7 0

Gain the support of key people needed to effect change 84 16 0

Develop a realistic vision/direction for change 84 15 1

Energize and enthuse others 76 22 2

Explain reasons for decisions 70 30 0

Be fair and equitable in treatment of people 70 30 0

Be consistent in word and deed 70 30 0

Involve people so they do not feel change is ‘done’ to them 69 29 2

Listen to employees 68 30 2

Produce realistic plans, schedules, deadlines 68 28 3

Take difficult, unpleasant decisions without undue delay 64 34 2

Convince people of the need for change 60 37 3

Maintain focus and persist in the face of difficulties 49 44 7

Set high performance standards 40 46 13

Sell benefits but also acknowledge costs for some 39 54 6

165 Leading and coping with change

Development of a ‘leading and coping with change’ framework

When asked why change programmes fail, senior managers give reasons that aresimilar to those given by employees, including a lack of commitment orenthusiasm for change, inadequate and/or conflicting messages, insufficient orinadequate HR supporting mechanisms and poor project management. Thissuggests that senior managers know what some of the problems are. What ismissing from this, however, is any sense of change as a process that binds leadingand coping together. To make sense of the coping strategies, competencies andleadership skills outlined above within a model of organizational change, we setout now a ‘leading and coping with change’ framework to address existing changemanagement failure.

Dominant models for change management often prescribe a sequence of stepsor stages. Collins (1998) refers to these prescriptive models as ‘n-step’ recipes, andargues that such approaches provide weak theoretical accounts. In contrast, wecontend that a more profitable approach is to view leading and coping in terms ofrecursive organizing social processes of changing and learning. When we viewthem as a social process (Weick, 1979; Hosking and Morley, 1991) within atransactional world-view, then:

persons, processes and contexts mutually define one another and serve as aspects of the whole,not as separate elements. These aspects do not combine to yield the whole; they are the wholeand are defined by and define one another. (Altman and Rogoff, 1987: 32)

In familiar settings, people use existing knowledge, hold expectations and applytacit rules that underpin habitual ways of performing. However, in changing

Table 7. How does your organization help prevent problems and/or help you to cope

with changes? (N ¼ 198)

Provision %

Sufficient authority to get my work done effectively 61

Good working relationships 51

Clear understanding of what I am expected to do and deliver 44

Sufficient resources to get my work done effectively 43

Fair and equitable rewards for my efforts 42

Opportunities to contribute to the full 37

Training in new skills/competencies, or updating 37

Clear understanding of my place within the organisation 33

A clear view about where the organization is heading 31

Involvement in decisions which affect me 28

On-the job opportunities to develop marketable skills 27

Useful feedback on my performance 25

The ability to manage work-home conflict 21

Communications that are open, clear, direct and frank 20

A view that people are treated with dignity and respect by the organization 19

Knowledge about my career prospects in the organization 14

Advice on possible career moves outside this organization 2

S. Woodward and C. Hendry 166

situations, people need the help of others to construct their sense of self, create asense of social order, and provide cues on how to act. Hence, organising processesare, in part, intrinsically cognitive, involving sense making and translatingunderstanding into action. It is important, however, for leaders and managers toappreciate that this reality-building process is not located within the traditionalview of communication as ‘transmission’ and of organization as a ‘conduit’, but,of communication as ‘social interaction’ and organization as emerging through‘co-ordinated activity’. In this view, language is a socially shared tool forsignalling and co-ordinating leading and coping with change activities. Figure 1illustrates the relationship between leading and coping processes, and highlightsthe importance of people creating new organizational contexts through new ideas,responsibilities and relationships developing and informing the skills people needto adapt to new role demands. Beer et al. (1990) argued that too little attention ispaid to meeting these new demands and that support for change is based onemployees’ personal experience of changing workgroup inter-dependencies. In theframework we use their notion of sequencing interventions, by which changeunfolds through learning.

Recent investigations of learning in the workplace have shown, moreover, thatmost learning is non-formal, neither clearly specified nor planned. It emerges,naturally, out of the demands and challenges of work (Orr, 1991; Eraut et al.,1998). The focus for change management should, therefore, be people in workgroups and ‘communities of practice’ (Brown and Duguid, 1991; Lave andWenger, 1991). This points to the key role of groups, tacit knowledge, experientiallearning and the location of learning in a socialization process (Hendry, 1996).Leadership discourses are material resources that can be used in the context ofdifferent communities of practice. As resources for the negotiation of meaning andformation of identity, they will be shared across practices but will be differentiallyintegrated within each community of practice (Wenger, 1998).

By combining the notion of ‘communities of practice’ to describe changingworkgroup interdependencies, and, thereby, linking learning and socializationprocesses at individual, community and structural levels, our ‘leading and copingwith change’ framework emphasizes the following key features.

. As new directions and situations are created, employees assess how theseaffect them. If they view these positively, they will adjust their expectations;if negatively, dissatisfaction results. Feeling they have the resources andcapabilities to cope will help with a positive reaction.

. Employees continually assess management support, credibility andcompetence, in the light of the climate for change they create and theresources managers provide to help them adapt. While employees tend toappreciate the difficulties managers themselves face in leading change, theyalso readily punish those managers who neglect the people aspects and createunnecessary pressures on them. The impact of employees judging managersand the effect of this on the success of change programmes is often forgotten.

. As change unfolds, employees continue to evaluate what is going on, andapply various coping strategies. If demands are felt to tax or exceed theirresources, they are more likely to respond with denial, avoidance or stress.

167 Leading and coping with change

. Providing support for employees to learn new competencies, through formaltraining or informal coaching, helps them to develop the skills to manage thenew situations they are faced with; while showing responsibility forperformance in the emerging situation, enhances their sense of autonomy andcontrol. In terms of organizational support, employees emphasize almost

Figure 1. Leading and coping with change model

S. Woodward and C. Hendry 168

entirely those things that give them a sense of autonomy and control.Unfortunately, managers leading change tend to stress the things they controlas the most important factors for success.

. Similarly, the success employees experience in meeting the requirements ofthe new situation will reinforce feelings of control.

Lewin’s theory proposes change as a transient instability that interrupts thenaturally stable equilibrium of an organised institution through a threefold linearprocedure. However, we suggest a different perspective: that ‘leading and copingwith change in the process of implementing change’ is a dynamic holistic process,with change as intrinsic and, therefore, that changing the ‘organization’ isachieved simultaneously with changing the relationships, competencies andcapabilities that define it. The relationship established between those formallyleading change and other employees involved in distributed leadership is key. Thesuccessful joint management of this relationship will determine whether desiredchanges will be achieved, in conjunction with the development of necessary skillsand competencies, and the creation of reinforcement and incentive systems.

Macro-level forces for change have created pressures for financial serviceorganizations to respond. Many have been reconfiguring themselves andintroducing new technologies, with the aim of becoming ‘flat, fast and flexible’and, thereby, more responsive to heightened competition. However, these can beviewed as merely ‘surface level’ phenomena, since the ‘deep structure’ of changetakes place through the individuals and groups that comprise the organization(Shani and Stjernberg, 1995). As Colin Carnall has commented

One of the problems we each experience when we attempt to relate models of change with ourreal-world experience of change is that formal models of change generally give an impressionof change as a neat, orderly sequence of activities or stages. Conversely, our experience isusually altogether more ‘messy’. Activities are often going on in parallel. We often recyclethrough different stages as we pilot a new organisational design or new marketing policy onlyto find that in some respects it does not work. (1995–1999: 170)

In particular, as Spender and Grinyer observe:

It is the continuity of human activity embedded in a sustained social context that is the sourceof the organization’s integrity through change . . . The key is the interplay of cognition, valuesand action. (1995: 909)

The process of changing the organization through ‘leading and coping withchange’ is based on the notion that people are not in an organization but that theactivities of people and organization can be viewed, from different standpoints, asaspects of a mutually constructed whole—in part-whole relationship. Therefore,the extent to which the organization successfully leads and copes with change is areflection of the extent to which its different members lead and cope. Theadaptation of persons and organization involves dynamic mutual modification.

Discussion of key elements of the framework

Those with formal responsibility for leading and resourcing change may createnew directions and situations in one of two ways. First, by establishing a shared

169 Leading and coping with change

goal, which becomes progressively less abstract as the uncertainties of activitiesare addressed by employees; and, second, by allowing communities of practice toevolve and then shaping and making purposive, emerging patterns of action. Ineither model, the role of the CEO, and leadership team, is not as the source ofinnovation but, rather, as the creator of an energizing context (Spender andGrinyer, 1995: 921).

Similarly, rather than viewing the aim of change as being, solely, the attainmentof particular objectives, the focus shifts to the ‘process of aiming’, which allowsfor a dynamic adopting of modified aims as situations change. Acting with theenvironment is contrasted with acting on the environment, and successfulinteraction of leading and coping processes will result in the production of well-coordinated performances. Coordination usually occurs without deliberation, butwhen problems become defined as such, they arise from a blocked cycle of activity(Clancey, 1997). Problem solving requires positive individual and collectivecoping strategies.

Yet, as formal leaders restructure expectations, different understandings aboutthe nature of the ‘changing organization’ may develop among the variousmembers, different expectations about changing roles and responsibilities mayarise, and definitions of what is important may change. With changes in eachemployee’s job/task requirements, a concomitant change can occur in workingrelationships because, as stated earlier, the individual is related to wider socialgroups in part-whole configuration. Conway suggest we might think of this in twoways: ‘task performance’, which refers to the core technical behaviours involvedin the formal job description; and ‘contextual performance’, which refers tobehaviours that support the situation in which the technical behaviours take place.‘Contextual performance’ elements include team working, helping colleagues,professionalism and supporting organizational objectives. These are oftendiscretionary, non-job specific competencies, which can be particularly importantfor supporting organizational long-term success (Conway, 1995).

Both types of performance are important aspects of the ‘process of aiming’, butsome leaders may increase task demands to such an extent that resources forcontextual performance become unavailable. Communities of practice can helpcoordination in both forms of performance, but contextual performance is moretacit since, unlike formal job descriptions, no explicit standards are set and formalsanctions are not invoked. However, the formation and functioning ofcommunities of practice may be adversely affected where resources are restrictedthrough an over emphasis on task performance, which ignores additional aspectsof practice needed to get the work done.

A changing organizational requirement, for many employees in banking andfinance, has been the expectation that they will move away from undertakingnarrowly defined tasks according to procedures, towards flexibly engaging inbroader and emerging work roles requiring new skills and knowledge. Flexiblerole orientation (FRO) and role breadth self-efficacy (RBSE) have been identifiedas two important precursors to people behaving proactively and undertaking arange of integrative and interpersonal tasks (Parker, 2000). Parker argues that foremployees to change existing behaviours, changes are required in twopsychological states. First, employees need to develop a view of their role and

S. Woodward and C. Hendry 170

responsibilities that aligns with changing employer expectations by developingFRO—seeing that broader problems are their responsibility, and recognizing theimportance of addressing problems themselves, rather than expecting others to.Second, employees must feel capable of behaving in the required way bypossessing RBSE. Self-efficacy refers to people’s judgements about theircapability to perform particular tasks (Bandura, 1989), and research has shownthat people with high task self-efficacy perform better and will persist whenproblems arise. RBSE is, therefore, a judgement about capability across a rangeof proactive interpersonal and integrative tasks. A similar concept of ‘extra’role behaviour termed ‘taking charge’ to effect workplace change (Morrisonand Phelps, 1999) has been found to result not only from felt responsibility andself-efficacy, but also from perceptions of top management ‘openness’ andpsychological safety (Baer and Frese, 2003).

While major demands result from role ambiguity and conflict, job performancedifficulties, work overload and the failure of others to cope, resources may bemade available through job enhancement and providing greater employee control,decision-making responsibility, and autonomy. Making resources available cancreate a climate in which employees may be willing to change and actively help tobring about change in their area of responsibility. In contrast, in situations ofinadequate or lost resources, where people’s expected levels of performance arethreatened, coping efficacy (that is, the degree to which a person believes that he orshe is capable of controlling threatening situations) is likely to be reduced. To theextent that active involvement in the task and context realignment process is likelyto lead to employees’ greater felt mastery and control over the work environment,coping efficacy will be enhanced. Indeed, enhanced job autonomy and improvedcommunication quality has been shown to lead to higher RBSE (Parker, 1998).

Similarly, expectations about performance may be seen as either resources ordemands. Where expectations can be met, these are seen as manifest resourcesbecause they confirm employee adjustments to workplace changes. On the otherhand, unmet expectations will be viewed as demands. Meeting these demandsrequires the investment of further resources. Where employees do not feel incontrol, or feel a loss of control, they are likely to be unable to deal proactivelywith changing expectations and consequent problems that arise with changingprocedures, practices, and relationships in the course of workplace change. Hence,situational appraisal, coping resources and coping strategies affect employees’ability to absorb workplace change. Additional, and avoidable, pressures are likelyto be created in situations where others fail to cope or lack the skills to adapt, andwhere managers themselves fail to cope. Such a climate is more likely to engendernegative coping strategies.

The study highlights the clear judgmental aspect of the relationship betweenleaders and led when change is being initiated or executed. Employee adaptation isinfluenced by assessments of management support, credibility and competence.Employees want direction, and envisioning is an important change leadershipskill, but it must be seen to be realistic. As Alan Bryman has observed:

Organizational members are not passive receptacles, but imaginative consumers of leaders’visions and of manipulated cultural artefacts. (1996: 323)

171 Leading and coping with change

While the formal leader’s role may be seen as providing explanations,legitimations and rationale for changing organizational activities—that is,engaging in symbolic management (Pfeffer, 1981)—employees are often criticalof their managers’ skills, abilities and experience. They assess senior managers’willingness to bring about change and measure their credibility to lead change.Employees judge leaders in terms of how they try to bring about change. Do they‘energize and enthuse others’; do they ‘explain reasons for decisions’, soemployees can understand why change is needed? Are additional pressures onemployees induced by change leaders failing to communicate effectively,managing the change process incorrectly, behaving inappropriately and so on?

How formal leaders try to bring about change is part of the wider issue ofemployee relations. Employees report that relationships will be positive if formalleaders are judged to ‘treat people equitably’, ‘lead by example’ and ‘hold two-way conversations’. The notion of two-way conversations is particularlyimportant. While managers seek to change the way people think about what isdesirable, possible and necessary (Zaleznik, 1977: 71), and leadership is the activepromotion of changed values, beliefs, assumptions and expectations about theorganization and what it seeks to achieve, sense-making results from theinterpretation of the messages that leaders convey. Management support andguidance, and inviting conversation rather than ‘commanding and controlling’,helps employees develop their understanding and expectations about workingdifferently. Indeed, Ford and Ford (1995) have emphasized the importance ofconversation when they talk about change as a communication-based andcommunication-driven phenomenon, while Barrett et al. (1995: 353) contend that‘discourse is the core of the change process’, Ensuring extensive communicationwas found, in part, to be a key predictor of success in business processreengineering initiatives in the financial services sector in Australia (Terziovskiet al., 2003).

Additionally, leader–employee relations are likely to be positive if leaders arejudged to ‘treat people equitably’. This finding is supported by prior research intoorganizational justice that has shown that when employees see themselves asbeing treated fairly, they develop many of the attitudes and behaviors required forsuccessful change (Cobb et al., 1995). The wider notion of ‘fair process’ is alsorelevant here. Kim and Mauborgne (1997) propose three elements of ‘fair process’in the way a company makes and executes decisions. These are to: (1) engagepeople’s input into decisions that directly affect them; (2) explain why decisionsare made the way they are; and (3) make clear what will be expected of employeesafter the changes are made. A lack of fairness can induce people to resist changeeven when it would benefit them directly.

Leaders are also judged in terms of their ability to effect change through changecontent skills. For employees, this includes showing realism in what can beachieved in planning, scheduling and milestone setting; keeping focused; andadopting appropriate timing and sequencing in the change process (Huy, 2001).Also, leadership, it has been argued, is acutely sensitive to context, so ‘leadingchange’ involves linking action by people at all levels of the organization(Pettigrew and Whipp, 1991). This involves both ‘public performance andbackstage activity’ (Buchannan and Boddy, 1992).

S. Woodward and C. Hendry 172

Leading change is a very public activity. Leaders are being watched from allangles, and what they do and how they do it is an important element insuccessfully bringing about change. Failing to show an appreciation of the balancebetween workplace demands and employee resources and to allow people todevelop competencies needed to perform well in a changing situation creates astrong negative impression. Consequently, in change programs where peopleaspects are ignored, employees will still be active in interpreting what ishappening and how well (or poorly) change is being led and managed. Thisbecomes an element in the process of change itself.

Implementing new initiatives will, inevitably, create problems. However, pro-blems that arise in the process of trying new policies, technologies or behaviours,are a major source of learning and improvement (Tyre and von Hippel, 1997). Sinceconscious problem solving arises within a blocked cycle of activity, the situationin which this ‘puzzle’ occurs is the context where practical action enables us totest out and determine whether anticipated consequences occur or whether alter-native actions are needed. And, because adaptive situations are not amenable toleader-driven solutions, they are the province of communities of practice. Whenleadership is reframed, in terms of ‘managers who foster communities of practice’,people are encouraged to strike up relationships to solve problems (both within andoutside formal role relationships) (Hendry, 1996). In mutual engagement, throughactions whose meanings they negotiate with one another, within their jointenterprise, and through their shared repertoire, informal distributed leadership canalso occur. Opportunities for learning through local engagement and widerparticipation will influence how employees apply coping strategies.

In addition to coping, employees identified a number of skills and competenciesthat are especially helpful to absorb and cope with change, including problemsolving, organizing work and managing time effectively, and understandingcustomer needs. Organizational structures and policies that enable cross-functional communication, encourage good working practices and rewardinnovative problem solving are likely to facilitate these skills and competencies.However, senior managers, according to employees, often seem unable to createthe conditions where these skills and competencies can be developed. As Beeret al. (1990) found, few organizations seem to be aware of the need to equipemployees with skills, resources and opportunities so that they can cope with newtasks and demands. If organizations took the trouble to specify what a ‘highperforming coping individual’ looked like, they could put in place recruitment andtraining so that employees could deal with change effectively as it occurs.

Similarly, in talking about meeting the changing requirements of organizations,work, and jobs in terms of ‘communities of practice’, our thinking aboutorganizations is influenced by the perspective that learning cannot be designed—itcan only be designed for—and, hence, facilitated or frustrated by the leading andcoping processes. In addressing problems as they arise in the contexts of activityall employees can lead through using their critical knowledge of engagement toalter direction. This sharing of the control of performance and, thereby, direction,enables local adaptations as part of the overall change management process.

Poor change leadership skills are a key impediment to change. Since leadersare themselves part of the change process they too need learning and support

173 Leading and coping with change

mechanisms. Mentoring by someone who has more experience of leading andmanaging change, setting up action learning groups for all those leading thechange process (Hartley et al., 1997), or engaging an outside consultant (Porrasand Hoffer, 1986; Margerison, 1989; Morgan and Sturdy, 2000), can provide somemeans of support. As Binney and Williams propose:

successful leaders in change combine leading and learning: they lead in such a way thatlearning is encouraged; they learn in such a way that informs and guides those who seek tolead. (1995: 7)

Employees often implicitly appreciate the need to learn to work differently andadjust their expectations to a new reality. For example, the notion of ‘lifetimeemployment’ and an ‘organizational career’, once prevalent in many financialservice organizations, has been severely eroded (Hendry and Jenkins, 1996), andfor many working in retail banking this is seen as a radical change requiring a newway of thinking about employment and its meaning for them (Littlefield, 1995).However, in other occupations and among groups such as graduates, the‘unwritten contract’ has always been rather different. Hence, the type of people,their experiences and expectations of change will affect their adaptability andrequirements for support. Contrary to the pessimistic view that people resistchange, our survey showed that, while change puts pressure on employees amajority, nevertheless, see change as a part of organizational life and feel positiveabout it.

In cases where ‘resistance’ is highlighted this can more usefully be recognizedin terms of ambivalence (Piderit, 2000) with the need for redefining the mutualobligations and commitments that exist between employees and the organization.As others have argued, the notion of ‘resistance’ needs to return to its system rootsrather than its current psychological definition (Dent and Goldberg, 1999).Similarly, resistance is often manifest as a fear of being unable to cope with newjob demands and may, therefore, be addressed in a variety of ways. Sinceemployees determine their responsibilities, level of commitment to work andthe company’s values, by questioning three dimensions—basic task andperformance requirements, the psychological contract and the social aspects ofthe personal contract—how a company answers these questions is one of the keysto successful change (Strebel, 1996; Rhoades and Eisenberger, 2002). The worstcase scenario is where employees accept the absence of support and adapt throughlowered expectations. As Herriot et al. observed:

[managers in the financial services sector] would welcome organizational help to developthemselves further so as to be able to meet new demands. Sadly, however, they do not expectsuch help. (1996: 188)

Similarly, we found a clear discrepancy between senior managers’ andemployees’ perspectives on the existence of reinforcement and incentive systemsto support change. This is despite the fact that HR practices have been proposed asone of the most powerful levers to help bring about change, since they have avisible impact on the attitudes and behaviours of employees (Tichy, 1982; Ulrich,1987). Under such conditions, it is not surprising that many change initiatives fail.Where senior managers stress limited sources of support and emphasize thingswhich they, as managers, control, the mismatch may be made worse, not better.

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Testimony to this is the significant discrepancy between senior managers’ andemployees’ perceptions on whether changes had affected employees’ perform-ance. In our surveys, senior managers believed that employees’ performance hadincreased in terms of efficiency and effectiveness ‘in most cases’ whereas, nearlyhalf employees reported ‘no effect’. Other examples of this disconnection betweensenior managers’ perceptions and employees’ perceptions has been usefullyillustrated in other findings (Doyle et al., 2000). In change programmes, mostemployees may prefer to keep their heads down and let change roll over them.Leading change has, therefore, to be an active process of engagement.

Conclusion: process of implementing change and implications for learning

Adopting the ‘leading and coping with change’ model as a conceptual tool in theprocess of implementing change has a number of implications for learning, someof which have been touched on above. We suggest a further three ways in whichchange management skills may be enhanced.

First, those formally leading change need to become better aware of the partthey play in the change management process. Hence, workshops that engage seniorand middle managers in confronting their own assumptions about what ‘leadingchange’ means, and what change means for those who are having to adjust to newways of doing things, can prove valuable. For this to happen, producing a businesscase for the workshop would help to engage with the senior management team inconsidering the people factor when focusing on organizational change. Middlemanagers who are responsible for leading self-managed work groups would needto be, similarly, mutually engaged before the workshop, to help them appreciatethe activity. In successfully constructing a different way of talking about changemanagement, some outcomes will be that formal leaders will pay attention todifferent things (such as coping and learning) and act differently (through engagingwith emerging communities of practice) as their world view changes.

Second, people, at all levels, like to appear capable and competent in theworkplace. During periods of distinctive change they assess what new ways ofworking are needed, what demands these provide and whether they have theresources to meet these demands. In this event, questionnaires could be developedas diagnostic tools for assessing employees’ needs. For example, by identifyingwhich skills and competencies are important to have in order to adapt and copewith change, and assessing the extent to which managers and staff possess theseimportant skills. Or, identifying how employees see themselves within thechanging workplace since, in the coping process and within communities ofpractice, identities also need to change.

The questionnaires can be used in a variety of ways. First, replies fromemployees could be aggregated to help inform change leaders’ perspectives.Second, the results could be used on a personal level, such as in an appraisalinterview, to determine personal development plans. They could also feed into aperformance management system. The questionnaire survey process inevitablybecomes part of the change process itself; employees need to know the purposeof the survey, goodwill can be created by feeding back the findings anddemonstrating actions resulting (or reasons for not acting). The survey process can

175 Leading and coping with change

also be used as a vehicle for workplace learning by involving work groups activelyin the feedback process, appreciating reasons for responses and identifying waysof reducing fire-fighting activities (which can often arise from tensions betweenauthorities and responsibilities). Thirdly, since change leaders, who are in thepublic eye, have to adapt and cope with change themselves they may, therefore,need support.

Since improvement in leading change skills and competencies can best beundertaken as the change process unfolds, we propose the use of action learningteams: these can be of two types. First, a group of managers, who are responsiblefor managing change projects can get together and help each other deal withproblems that arise as the change process unfolds. This would be an ‘educative’community of practice designed for engaging with other leaders in criticallyreflecting on practice. Another approach would be to invite managerial leaders andemployees into a more collaborative, less-hierarchical setting conducive todialogue. Here, multiple local realities can be voiced, participants can learn newways of relating, and leadership becomes dispersed. Future Search (Weisbord andJanoff, 1995) and other similar methods of large group interventions (Manningand Binzagr, 1996) can be used to facilitate learning across a constellation ofcommunities of practice,1 with dialogue thereby facilitating personal andorganizational development (Dixon, 1998). Additionally, regardless of level andstatus in the organization, the rapid pace of change in the sector is driving thestrategic importance of continuous competence in professional development(Storer and Rajan, 2002).

Callan (1993) observes that research is ‘curiously silent’ about how people reactto organizational change and, particularly, about how to facilitate positiveaccommodations and adaptations to change. In this article we have sought to castsome light in this area, and, particularly, to show the interrelated nature of leadingand coping with change, and therefore the importance of encouraging leader- andemployee-led change, of both a formal and informal nature. It is only when changeleaders appreciate what managers and employees need, and managers are able todelegate, develop staff and renegotiate role relationships, that change is likely tobe effective. Such an awareness, and the supportive behaviours and mechanismsthat are indicated, then become an important part of the change leader’s owncompetence set for managing change.

Appendix: survey design

Sampling method

For the survey of senior managers responsible for initiating change, a sampleframework was generated by SIC codes for financial services and business/

1Although for convenience the ‘leading and coping with change’ model adopts change management as task

alignment at the unit level, we do not conflate this social configuration with ‘community of practice’. It is

important to recognize discontinuities that are integral to discrete practices by viewing inter-connected practices

as a ‘constellation’, where relationships may arise through sharing historical roots, competing for the same

resources, or having related enterprises (Wenger, 1998). All of these relations can create continuities that define

broader configurations

S. Woodward and C. Hendry 176

professional services supporting the sector, all located within the City of London,which was the geographical focus for this study. A data-set of 955 companies wasobtained from a commercial firm, and a further 120 organizations comprisingbuilding societies, and business and management consultants were added, making1075 firms in all. A structured, random sample of 250 companies was derived fromthis and questionnaires sent to all of these, with follow-up letters and phone calls.The response rate of 12% from 30 firms, was disappointing, although notuncommon and in line with recent survey responses in the UK (Marc Thomas,personal communication). Executives who responded nevertheless representedorganizations with a total of more than 156 000 employees. It is also worth notingthat the two traditional requirements of survey research have been representativesampling to permit generalization from a sample to a population and a highresponse rate to reduce the likelihood of bias in the obtained data. However, recentresearch has shown that when probability sampling methods have been used weshould no longer presume that lower response rates necessarily signal lowerrepresentativeness (Krosnick, 1999).

Initially, we had hoped to draw our employee sample from companiesresponding to the first round, but these generally declined to cooperate further.Instead, we derived a purposive sample with the aim of producing maximumvariation, to collect data and identify any key themes that might appear. Anypatterns emerging from such heterogeneity are likely to represent important factors(Patton, 1990/2002). Prior to selecting the sample, we adopted a number of selectioncriteria including diversity of occupational grouping, place of work (with no morethan one respondent per site), age and gender. Eight hundred individuals wereidentified through membership of relevant Institutes, Associations and other bodiesin the City of London (with some of these helping in questionnaire distribution), andthese were sent a self completion postal questionnaire. One hundred and ninety-eightcompleted questionnaires were received, giving a response rate of 25%.

Respondent characteristics

Financial services is a complex sector, comprising many services and products.The surveys sought to capture this complexity and diversity, and sampling detailsare included above. Since a typical response for a mailed survey is around 20%,and because of the indeterminate size and nature of the population being surveyed,sample characteristics are of greater consequence and, hence, are detailed below.In both surveys, nearly all of the respondents were male (90% of the seniormanagers surveyed: 75% of other employees), while around 7 in 10 of theemployee group were aged between 26 and 45 years, with the same proportion ofthe senior manager group aged over 40.

Senior managers were evenly spread in terms of length of time in the company,with one third having been with the company three years or less, a third between 4and 10 years, and the rest more than 10 years. All were located at head office andmost held positions of chairman, CEO, managing director, partner or HR director.A quarter came from insurance with between 10 to 15% coming from each ofinvestment/fund management, wholesale banking, retail banking, broking andconsultancy/professional services.

177 Leading and coping with change

Proportionately, fewer employees (including managers and staff) had been withtheir organization less than three years, with the remainder (70%) equally dividedbetween medium- to long-term service. Around a quarter worked for insurancecompanies and a similar proportion for investment/fund management firms. Therest were fairly evenly spread between wholesale banking, retail banking, brokingand consultancy/professional services. Around 90 different job titles were given.These were clustered into insurance-related jobs; professional/support staff;management positions; trading/dealing; investment-related positions; adminis-tration/backroom and retail banking positions.

Questionnaire design

In following a quantitatively based relational survey methodology (Bradbury andLichtenstein, 2000), the researchers searched the academic and business literaturesreporting on what had been happening in the sector, to identify issues of relevance.They also carried out a small number of interviews with informed people from thesector to identify core issues and close-ended categories likely to be of mostrelevance to respondents. The surveys were undertaken sequentially, with seniormanagement responses informing some of the categories used in closed-endedquestions posed in the employee survey. Since the questionnaires were designedusing internally-generated perspectives, the assumption is that the informationprovided through the survey, using both closed- and open-ended items will bericher and more complete (Anderson, 1996). The questionnaire was then pilottested with a small number of people from the sector.

Choice of survey items reflected a desire to explore with senior managers andhuman resource specialists having formal responsibility for ‘leading change’, fourkey areas:

1. Changes introduced (for example, type of major changes introduced into theorganization, triggers for change initiatives, depth of change introduced,manner and focus of change implementation, desired outcomes, and stepstaken to sustain change).

2. Opinions about employees’ reactions to change (such as the expectations ofemployees to introduced changes; manifest reactions to change; impact ofchange initiatives on roles, responsibilities and accountabilities andperformance; skills/attitudes employees’ required for coping with changesintroduced).

3. Organizational practices—such as the level of support provided—asevidenced in prior preparations for change and HR system changes.

4. Opinions on skills and attitudes believed necessary to successfully leadorganizational change, and reasons why change programmes fail.

The second survey of employees (including managers at all levels except topmanagement) investigated five areas:

1. Perceived changes in the job or work environment that employees have hadto cope with (such as key triggers for organizational change; resulting

S. Woodward and C. Hendry 178

changes of emphasis on strategic imperatives; management’s ability inimplementing change).

2. Opinions on how experience of change to date, and anticipation of futurechange, had affected employees (including the nature of the workingenvironment; work/job changes; different work performance expectations;impact of changed employer expectations on attitudes to work and to theemployer); how changes have manifest in behaviours/performance andattitudes; willingness to respond to further changes.

3. What employees perceived as the requirements for coping (problems causedby changes; personal strategies for coping with these problems; skills andcompetencies needed to absorb and cope with changes).

4. Skills and competencies needed by those leading change which will assistothers in the process of absorbing change; ways in which those leadingchange create difficulties or make it hard for people to absorb/adapt tochange.

5. Organizational practices (ways in which the organization prevents problemsand supports employees’ changing).

In both surveys, as well as closed questions, a number of open-ended questionswere inserted to capture further variations in experience in these areas.

Data analysis

Numerical data was entered onto spreadsheets and incorporated into SPSS version9. Closed question responses were aggregated as frequency data and, wherecomparisons were possible, cross tabulations were generated with x2 tests ofassociation undertaken. However, because of the small numbers involved, fewsubstantive differences across groups could be identified. This did not present aproblem because the main focus of the study was on differences in perceptionsbetween top managers of change and others who are recipients of change (whichthey, as managers, may have helped execute). Open-ended responses were contentanalysed and clustered under emerging themes.

Acknowledgements

We would like to thank Focus Central London (formerly CILNTEC) for fundingthis study and acknowledge the help of Maria Charalambous in developing anddistributing the questionnaires for the first survey, as part of her MBA dissertation.

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Notes on contributors

Sally Woodward is Lecturer in the Faculty of Management at Cass BusinessSchool (formerly City University Business School). She lectures in organizationalbehaviour and research methods, and has a special interest in consulting tomanagement, and in the strategy and management of knowledge intensiveservices, which she teaches on the MSc in Internal Auditing and Management, andthe MBA. Recent publications include Managing Change Successfully (withWilliams and Dobson, Thomson Learning, 2002) and ‘Higher educationopportunities in management consulting’ (with Williams, in B. Curnow andJ. Reuvid, The International Guide to Management Consultancy, Kogan Page,2003).Chris Hendry is Centenary Professor in Organizational Behavior in the Faculty ofManagement and Associate Dean for Research at Cass. He was previouslyPrincipal Research Fellow and Associate Director in the Centre for CorporateStrategy and Change at Warwick University and is well known for his publicationsin the areas of HRM, change management, learning organization, innovation andindustrial networks.

183 Leading and coping with change