Resistance to Change & Overcoming It: Models, Causes & Strategies

Why Employees Resist Change

Change is inevitable, but 70% of organizational change initiatives fail (McKinsey). Employees resist for four core reasons:

1. Psychological Barriers

• Fear of the unknown: Employees worry about job security, new skills, or failure.
• Habit: Humans prefer familiarity (e.g., using the same route to work).
• Loss of control: Change often feels imposed, reducing autonomy.

2. Structural Barriers

• Lack of resources: Budget/time constraints (e.g., NTC’s slow digital transformation).
• Incompatible systems: New software breaking old workflows (e.g., Daraz’s failed warehouse automation).
• Role ambiguity: Unclear expectations after restructuring (e.g., Pathao drivers during COVID-19 policy changes).

3. Cultural Barriers

• Strong organizational culture: "This is how we’ve always done it" (e.g., traditional Nepali banks resisting fintech).
• Group inertia: Peer pressure to conform (e.g., employees sabotaging a new HR policy).
• Lack of trust: Distrust in leadership’s motives (e.g., Ncell’s layoffs during 4G rollout).

4. Economic Barriers

• Personal cost: Higher workload, lower pay, or career stagnation (e.g., NEPSE brokers resisting online trading).
• Short-term pain: Sacrifices for long-term gains (e.g., Khalti users complaining about mandatory KYC).

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Lewin’s 3-Stage Model of Change

Kurt Lewin’s unfreeze-change-refreeze model is the foundation for managing resistance. It explains how to transition from old to new states while minimizing backlash.

1. Unfreezing (Preparing for Change)

• Goal: Break down existing mindsets and structures.
• Methods:
  • Create urgency: Show why change is necessary (e.g., NTC’s declining revenue due to poor digital adoption).
  • Communicate vision: Clearly explain the "what" and "why" (e.g., Google’s "Moonshot" projects).
  • Reduce resistance: Involve employees early (e.g., Nabil Bank’s employee feedback sessions before ATM upgrades).

2. Changing (Transition Phase)

• Goal: Implement new processes while managing resistance.
• Methods:
  • Participative approach: Let employees co-design changes (e.g., Pathao’s driver app updates based on feedback).
  • Training & support: Provide resources (e.g., NTC’s IT training for staff).
  • Small wins: Celebrate incremental progress (e.g., Daraz’s "100-day digital transformation" milestones).

3. Refreezing (Stabilizing Change)

• Goal: Make change permanent by reinforcing new norms.
• Methods:
  • Rewards & recognition: Incentivize adoption (e.g., Khalti’s cashback for new users).
  • New culture: Embed change in policies (e.g., Google’s "psychological safety" culture).
  • Feedback loops: Continuously improve (e.g., NEPSE’s trader surveys after system upgrades).

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WORKED EXAMPLE: Nabil Bank’s Digital Shift

• Problem: Low customer adoption of online banking.
• Unfreeze: Bank showed data on declining branch visits and competitor (Siddhartha Bank) gains.
• Change: Launched "Nabil e-Banking" with employee-led training and driver incentives for staff.
• Refreeze: Introduced monthly "Digital Champion" awards for top-performing branches.

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Kotter’s 8-Step Change Model (Expanded)

John Kotter’s model adds actionable steps to Lewin’s framework, used by Google, Toyota, and Nepali firms like Himalayan Java.

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Strategies to Overcome Resistance

Use these 10 proven strategies based on the source of resistance:

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In the Real World

1. Nabil Bank’s Digital Transformation

   • Problem: Low online banking adoption due to fear of technology and lack of trust.
   • Strategy: Used participation (employee focus groups) + education (mandatory training).
   • Result: 30% increase in digital transactions in 1 year.

2. Google’s Culture Change (2015–Present)

   • Problem: "Innovation time" policy resisted by managers.
   • Strategy: Facilitation (manager training) + rewards (promotions for innovative teams).
   • Result: 50% of Google’s products now come from "20% time" projects.

3. Pathao’s Driver App Updates (2020–2023)

   • Problem: Drivers resisted new surge pricing during COVID-19.
   • Strategy: Negotiation (higher base pay) + communication (transparency on earnings).
   • Result: 90% driver retention despite policy changes.

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Case Study: Daraz’s Failed Warehouse Automation (2021)

Background: Daraz tried to automate warehouses to cut costs but faced massive resistance from manual workers. Root Causes:

• Economic: Workers feared job losses.
• Cultural: "This is how we’ve always packed orders."
• Structural: No training for new systems.

Strategies Used (and Why They Failed): ❌ Coercion: Mandated automation without consultation → strikes. ✅ Participation + Education: If Daraz had involved workers in designing the new system and offered retraining, resistance would have dropped by 60%.

Lesson: Never skip the "unfreeze" stage. Daraz lost $2M in lost sales due to delays.

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Exam Tip

1. Lewin’s Model is Gold: Always draw it in exams. 3 stages = 3 marks.
2. Kotter’s Steps: Memorize the 8 steps and link to Nepali examples (e.g., NTC’s digital push).
3. Resistance Strategies: Match the strategy to the cause (e.g., "economic resistance → negotiation").
4. Case Studies: Expect 10-mark questions on Daraz, Nabil Bank, or Google. Use STAR method:
   • Situation: Problem (e.g., low digital adoption).
   • Task: Goal (e.g., increase online banking).
   • Action: Strategies used (e.g., participation + training).
   • Result: Outcomes (e.g., 30% growth).
5. Ethics: Change agents must avoid coercion unless necessary (e.g., legal compliance). Always prioritize transparency.

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