Everything you need to know about organisational change. Organisational change refers to the process of growth, decline and transformation within the organisation.
Though one thinks that organisations are enduring structures in a changing society. However, the truth is that organisations are changing all the time. Organisational change takes different forms.
Sometimes, organisations change quite radically yet retaining their name; the new organisation may be nothing like the old one except in the name.
All this makes organisational change a complex and confusing phenomenon or a process. It is much more complex than normal human behaviour.
Change is a part of life and provides opportunity for growth. It is a conscious decision by the management of organisation.
In any organisation, we have people engaged in production, research, development, administration, etc. The organisation in order to change should prepare a stock of the situation and should effect change in their attitude and style of functioning.
1. Meaning of Organisational Change 2. Nature of Organisational Change 3. Type 4. Level 5. Essentials
6. Reasons 7. How to Manage Organisational Change? 8. Barriers 9. Efforts to Overcome Resistance to Change.
Organisational Change: Meaning, Nature, Type, Level, Essentials, Reasons, Barriers, Efforts to Overcome Resistance
- Meaning of Organisational Change
- Nature of Organisational Change
- Types of Organisational Change
- Levels of Organisational Change
- Essentials of Organisational Change
- Reasons for Organisational Change
- How to Manage Organisational Change?
- Barriers to Organisational Change
- Efforts to Overcome Resistance to Change
Organisational Change – Meaning
In general sense, change is to make or become different, or give or begin to have different from. For instance, postwar recovery of Japan to its present state of supremacy is a significant change, though influenced to a great extent by American openness, generosity and leadership in the process of change.
Today, Americans are learning from the Japanese as to how to retain competitiveness in the global markets a classic example of what change is all about. Even Dr. P.E. Drucker wondered as to whether he is writing for American economy or Japanese. Change also means dissatisfaction with the old and the belief in the new.
Dissatisfaction can arise out of a perceived deficiency in an existing system which may be inherent deficiency gone unnoticed or one perceived in comparative evaluation with better system.
Deficiency is also the inability of a system to respond to environmental pressures and technological impacts. Change underlines qualitatively different way of perceiving thinking and behaving to improve over the past and the present.
Change is the alteration of status quo or making things different than before. Change is the disturbance of equilibrium presently prevailing. It is any alternation that occurs in the overall work environment of an organisation.
Mr. John Bull defines organisational change as “When an organisational system is disturbed by some internal or external force, change frequently occurs. Change as a process, is simply modification of the structure or process of a system. It may be good or bad, the concept is disruptive only”.
Organisational change refers to the process of growth, decline and transformation within the organisation. Though one thinks that organisations are enduring structures in a changing society. However, the truth is that organisations are changing all the time. Organisational change takes different forms.
Organisations may change their strategy or purpose, introduce new products or services, change the way they produce and sell, change their technology, enter new markets, close down departments or plants, hire new employees, acquire other organisations become acquired by other organisations and what not ! In doing so, they may turn larger, smaller or stay the same in terms of size.
Sometimes, organisations change quite radically yet retaining their name; the new organisation may be nothing like the old one except in the name. All this makes organisational change a complex and confusing phenomenon or a process. It is much more complex than normal human behaviour.
The rapidity of change taking place in the social, political and economic environment is creating marked impact on organisations as well as individuals. Though the change has been coeval with human existence, the pace of it has varied in recent times—most of the developments we witness now have been taking place in the last 100 years and is likely to accelerate in the present century.
What is different now is that pace of change. The present day changes have been more rapid, more complex, more turbulent and more un- predictable than ever before and have effected the very traditions of human existence. In his insightful book future shock Mr. Alvin Toffler argued that humanity is now a part of an environment so unfamiliar and complex that it is threatening teeming millions with ‘future shock’.
Future shock occurs when the type of changes and the speed of their introduction over powers the individual’s ability to adapt to them with the result that one can no longer absorb change without displaying dysfunctional behaviour. The problem arises not from a particular change one cannot handle but from the fact that society itself is in a state of flux.
Since so much is changing, new ways of dealing with this ‘temporary society’ are needed. This society in which we live is characterised by the temporary nature of housing, jobs, friendship and neighbourhoods. Change is so frequent that there is no long-term stability and even values may come to reflect this.
Organisational Change – Nature
Change is a part of life and provides opportunity for growth. It is a conscious decision by the management of organisation. In any organisation, we have people engaged in production, research, development, administration, etc. The organisation in order to change should prepare a stock of the situation and should effect change in their attitude and style of functioning.
An organisation is an open system which implies that it is in a constant interaction and interdependent relationship with its environment. Any change can occur in its environment, such as change in consumer tastes and preferences, competition, economic policies of the government, etc.
An organisation consists of interrelated and interacting system, to perform complicated tasks such as:
1. Authority and power system.
2. Reorganisation of the tool and techniques used in the system evolving proving of better equipment.
3. Change in the attitudes and behaviours and interpersonal relationship of people working in the organisation through systematic manpower planning.
4. Delayering to flatten structures.
5. Change to multiple reporting relationships.
6. Jobs designed to grow.
7. Increase in job flexibility.
8. Increase in organisational flexibility.
9. Need for clear, measurable, and flexible standards of performance at all level, etc.
Organisational Change – 2 Major Types: Reactive Change and Proactive Change
Organizational changes are of two types:
1. Reactive changes and
2. Proactive changes (planned changes).
A brief description of these follows:
Reactive changes occur when forces compel organization to implement change without delay. In other words, when demands made by the forces are compiled in a passive manner, such a change is called reactive change.
Proactive changes occur when some factors make realize organization think over and finally decide that implementation of a particular change is necessary. Then, the change is introduced in a planned manner.
The difference between reactive and proactive changes can made on the basis of behavioural angle:
1. Reactive change involves a reflexive behaviour whereas proactive change involves purposive behaviour.
2. Reactive change covers a limited part of the system but proactive change co-ordinates the various parts of the system as a whole.
3. While reactive changes respond to immediate symptoms, proactive changes address to underlying forces creating symptoms.
An example will help you distinguish the two changes in clearer manner.
Remember, you respond reflexively to a sudden intense light by blinking your eyes or by pupillary contraction. Undoubtedly, yours this is an automatic and instant response to a force (intense light) without giving any thought.
But, your purposive response to the same force would involve devising a plan either to shield the eyes or removing the light. Obviously, yours this action would involve co-ordination of central nervous system and psychomotor capacities.
When changes are effected after working out when and how they will be carried out, planned changes occur. For initiating planned change, the manager needs to constantly watch the changes taking place in the external and internal environment of the business so that corrective measures are taken accordingly and the changes could be effected successfully.
Following are some of the causes of organizational changes which lead to disequilibrium end resistance:
i. Change in Tools, Machines and Equipment:
Technological or mechanical changes in machines, tools and equipments may bring change in the organization. For example, installation of an automatic machinery in place of old machinery, may result in displacement or re- placement of people or loss of job to people and may create disequilibrium.
ii. Change in Methods and Procedures:
Man is a creature of habits. He feels irritated when change occurs in methods and procedures of work of which he is accustomed to. As it takes time to adjust to the new environment, it creates disequilibrium till the complete adjustment to the new environment.
iii. Change in Business Conditions:
Changes in business conditions such as change in the quality of the product, change in the marketing system or practices, business cycles, change in industrial policy etc. all create disequilibrium in the work-environment and it needs adjustment accordingly.
iv. Change in Managerial Personal:
Change in the managerial personal in the organization may result in disequilibrium. A personnel may retire or change place or may be appointed afresh, this will all affect the policies, practices, procedures and programmes of the organization and the people are to adjust themselves accordingly.
v. Change in Formal Organization Structure:
The formal organization structure establish a form and line of command of authority and responsibility in an organization. Along with these lines, channels of communication and interpersonal relations are established. If there is a change in this formal organizational structure, there will be a change in the formal relationship which creates disequilibrium.
vi. Change in Informal Organization:
Informal organization is a must in every formal organization and is a very important part of our existence because many of our motivational forces find satisfaction in this relationship. Consequently when management likes to introduce any change that disturbs the informal relationship established among people there is bound to be a state of imbalance.
A short list of some of the changes which affected almost all organization in the past few decades is given here:
i. Technological innovations have multiplied, products and knowhow are fast becoming obsolete.
ii. Basic resources have progressively become more expensive.
iii. Competition has sharply increased.
iv. Environmental and consumer interest groups have become highly influential.
v. The drive for social equity has gained momentum.
vi. The economic inter-dependence among countries has become more apparent.
All the reasons for organizational change can be classified into two categories external reasons and internal reasons:
A number of changes in the external environment may cause change in the organization. Here, we are mentioning some of the most common and obvious external reasons of organizational change-
1. Government Rules and Regulations:
One can catalogue a long list of the Government’s rules and regulations necessitating changes in organizations. For example, the recent slashing of grants by the University Grants Commission (UGC) to the Universities have forced them to strengthen their revenue generating functions, such as training programmes, consultancy, offering self-financing courses, etc.
Likewise, the Government’s policy to privatise the power sector encouraged Jayprakash and the DLF to diversify into the power sector.
The present time is the survival of the fittest. Organizations need to come up the challenges posed by the competitors to sustain and survive. In 1993, Mudra Communication decided to reorganise itself to counter the threats from its competitors Lintas and HTA.
3. Technological Advances:
Technology has become the buzzword of the time. Rapid changes in technology has posed a question before the organization – either run or ruin. The revolutionary change in communication technology, i.e., communication satellite, cable networking, dish antenna, etc., compelled the Doordarshan to restructure itself by segmenting its services to different categories of viewers and become more competitive.
4. Change in People Requirements:
Customers dictate organization what they actually require. With changing requirements of customers, the five-star-hotels have, of late, started to offer new services, such as business centres, conference hall facilities, secretarial services, etc.
Though there may be a host of internal factors that may also cause change in organizations, some of the illustrative ones are listed here:
1. Change in Leadership:
Leadership changes culture and values in the organizations. V. Krishnamurty of SAIL, Tapan Mitra of INDAL, Ratan Tata of Tata Sons are the examples how the change in leadership led to internal changes in these organizations.
2. Introducing New Technology:
Introduction of new technology in an organization is bound to have consequences for other functions as well. For examples, the computerisation of the Examination Division of the M.K. University affected other aspects as well, such as reporting relationships, span of control, co-ordination mechanism and so on.
3. The Domino Effect:
The source of change is change itself. The domino effect means one change triggers off a series of related changes. For example, establishing a new department, e.g., the Department of Business Administration may cause the creation of teaching and non-teaching positions, budgeting allocation, building construction etc. Ignoring domino effect leads to the problems of co-ordination and control.
4. For Meeting Crises:
Just like human life, some unforeseen happening, say, crisis in the organization makes continuation of the status quo unthinkable and difficult. Sudden death of a CEO, the resignation of the executives holding key positions, loss of major suppliers, a drastic cutback in budget and civil disturbances are the examples of unforeseen crises.
These make the organizational condition unstable and this instability becomes the stimulus for thorough self-assessment and reform to change the organization to overcome the crisis before it.
5. Organizational Life-Cycle:
As human beings pass through certain sequential stages of life-cycle, so do the organizations also. As an organization grows from tiny sized to giant sized or from young to mature stage, according to Larry Greiner, it passes through five stages.
Each stage creates new demands for adjustment for the organization and so, act as a potent sources of organizational change. Each stage culminates in a crisis (which Greiner calls ‘revolution’), which the organization must overcome before graduating to the next stage.
Organisational Change – 3 Levels: Lifeless-Change, Half-Minded-Change and Abysmal-Change
‘Consistency is the quality of a stagnant mind’, says John Sloan. This is rightly said, as it finds great application in the current unpredictable business scenario. Change, resistance to change, and managing change are popular terms and processes in the business world, more so to employees in change-prone organisations.
Well, enthusiasm to change is quite obvious in today’s employees. However, whatever it takes to bring out innate change is not ingrained in the change management programs or organisation’s conduct. The initiative to hold change management and performance enhancement programs have never fallen apart but the structure and the content of such programs definitely need refurbishing.
Change is possible only if employees are persuaded to think about their jobs in fresh perspectives. A transformation in the attitudes and behaviour of an individual can bring about a fresh outlook to one’s job.
There can be three levels of change as mentioned below:
Depending on the extent of change desired CEOs could take to any of the three levels of change. The first is related to the outcomes of the business decisions. It has nothing to do with the work patterns or the workplace behaviour of employees. For instance, consider divesting non-core assets to emphasise on core business. In no way does it affect employees change in attitudes or behaviour. This is the least complex, rather the most straightforward level of change that could be brought about in organisations.
The next level involves slightly more complex change process. This level demands of employees’ adjustment in the existing practices or adoption of new ones to achieve predetermined targets. A financially unstable company for instance, might solicit change in working patterns or look for innovative ways to reduce or even eliminate waste.
The third and the most complex and deepest of all the levels of change is cultural change. Cultural change involves a complete change in employees’ behaviour across the board. If a company could become competitive by changing from being reactive to proactive, hierarchical to collegial, or reflective to externally focused, then cultural makeover is the ideal change that one could look for. Since change is collective and affects the culture of organisations, it must aim at transformation of the minds of all those employees involved in the change.
Organisational Change – Essentials of Organizational Change
Senior leaders and their learning partners must keep three key areas in mind as they navigate any major change like:
1. Organisational design,
2. Leadership capabilities, and
3. Employee engagement.
1. Organisational Design:
As an Organisation’s strategy shifts to respond to the change, so must its design. The design of an organisation includes a number of important levers that work together to ensure the achievement of the organisation’s strategy. These levers include-organisational structure, processes, metrics and reward systems, and people practices. These systems, working in harmony, create focus and harness the collective energy of the organisation.
Realigning these key levers after a major organisational change is often not a top priority, as senior executives are typically focused on the bottom line, shareholder value and employee retention. While a full-scale redesign may not be possible or practical, organisations can begin bringing their systems back into alignment with the new reality by targeting three critical areas-
Having a shared set of values provides a clear sense of purpose to employees and serves as the foundation on which to rebuild the house.
Once the foundation has been secured, leaders must ensure that everyone knows what needs to be done to stabilise and start rebuilding. Leaders need to communicate how the goals have changed and how they link to the strategy.
Leaders must be clear with employees about how they fit into the newly defined organisation. Do they have new roles and new people they need to interact with to do their jobs? Are their roles the same, but are they part of a different team? Have teams merged? Team leaders should understand the scope of change for each person on their team and be sure to clearly identify the level of change to enable maximum productivity.
2. Leadership Capabilities:
Challenging times require a different type of leadership. There are five core leadership competencies critical to driving and enabling change. The logic behind these competencies is simple- a layoff, restructuring, or merger or acquisition causes major disruption, and leaders must focus their capabilities on a narrow list of priorities.
The priorities include:
(i) Setting Direction:
Leaders must define the focus for the organisation and its people by restating the vision and ensuring that the sense of purpose is clear and articulated.
(ii) Aligning Employees:
Once leaders have set the course, they must make the goals, objectives and mission clear to employees to gain their support.
(iii) Motivating and Inspiring People:
Enduring a major change can be difficult for the remaining employees and may drain productivity. Leaders can motivate and inspire people by focusing on the organisation’s future success.
Change can be unsettling, but people will be more productive if they know what’s going on. Leaders must demonstrate strong communication skills and must be honest with employees about the changes in the organisation.
(v) Managing Talent:
Leaders must scrutinise the redefined organisation’s talent needs and secure that talent.
While simple in theory, in practice, the focus and discipline required to successfully execute on these capabilities is not easy. In all likelihood, formal leadership development efforts are no longer practical. However, targeted coaching, action learning and on-the-job tools can help develop these competencies in real time and not only support leaders through the change, but strengthen their capabilities in the process.
During a workforce reduction, company leaders can be so focused on the employees they’re laying off that they overlook the impact of the change on those who stay. To survive and rebuild, it is vital for the organisation to support its people and teams as changes occur.
One way to do this is by directly enlisting employees to play a role in shaping the future of the organisation. Understand what they need to be more individually resilient and provide the training and support to build this capability. While often formed early in life, personal resiliency can be developed, and strengthening personal resilience enables organisational change to be absorbed with minimal impact on productivity and morale.
Leaders also can perform a quick pulse survey, asking employees to answer these key questions:
1. Do I know what is expected of me?
2. Do I have the right skills, abilities and potential?
3. Do I belong here?
4. How can I learn, grow or innovate?
Communication is also vital component of employee engagement. Employees should be kept informed through regular communication, such as newsletters and manager roundtables. The communication channels should be two-way, open and honest, and frequent. The more information employees have, the less time they spend guessing about the direction of the company and the more time they have to focus on their work.
While there is no way to predict what changes might affect an organisation in the future, leaders who prepare for the change and its aftermath will ensure their organisations can thrive through the challenges ahead.
Organisational Change – Reasons for Organisational Change
Many things cause organisational change.
1. Challenges of growth, especially global markets
2. Changes in strategy
3. Technological changes
4. Competitive pressures
5. Customer pressure, particularly shifting markets
6. To learn new organisational behaviour and skills
7. Government legislation/initiatives.
8. Change in organisational structure
9. Change in managerial personnel.
Research indicates that organisations are undergoing major change approximately once in every three years, whilst smaller changes are occurring almost continuously. There are no signs that this pace of change will slow down.
Hence, organisations have to modify and change to adapt to the changing internal and external environment:
1. Technological innovations have multiplied
2. Basic resources have progressively become more expensive.
3. Competition has sharply increased.
4. Communication and computers have reduced the time needed to make decision
5. Environmental and consumer interest groups have become highly influential
6. The drive for social equity has gained momentum
7. The economic interdependence among countries has become more apparent.
Organisational Change – How to Manage Organisational Change?
Though the people have agreed and are convinced of expected change in organisation, the immediate question before the strategists is how to manage the change? No company wants to be the victim of change but victor of the change. This managing is an import art that asks for display of skills of developing an action plan or a process that makes the company to turn the corner successfully.
KL Strategic Change Consulting House of Kaula Lampur-Malaysia has come out with a model of manage the change which is cited by Professor Victor S.L. Tan in his title Changing the Mind-sets. Ensuring the future of Asian Organisation published by Times Books International, Singapore.
To start with the leaders of the organisation are expected to anticipate change by analysing the external environment and applying their intuitions to predict the change management can magnify the opportunities and miniaturing the threats from the forces of change in the market place by anticipating the change.
The management can leverage the resources and exploit opportunities for its own growth which is possible with superior skills of anticipation.
The organisational leaders are to identify the changes and evaluate as to how their organisation can match its strategy, structure, systems, skills styles, staff and super-ordinate the goal to the external driving forces of competitors, customers, contradictions and other conditions of the market place.
This calls for an intricate diagnosis of the organisation in the back- drop of changing environment. Wise leaders are bold and frank enough to question themselves about their vulnerability to strategic changes, opportunities they can pocket out of the change, gap between the desired performance and the real ground performance.
There is dire need for selling the change through effective communication to different executives and the employees at all the levels to bring about change. It is effective communication that creates awareness about change and to prepare the people for extending their whole-hearted support through commitment for change.
Hence, it is up to the leaders at top to bring home the benefits of change that accrue to the organisation and, therefore to the people who make the organisation.
Introduction of change can be effective only when the people responsible build a team or sub-teams and assimilate resources. The leader at the top has to involve the people at different positions commanding authority. Further, the people with requisite expertise, acumen and experience are to be consulted. This cements the task of mobilising the resources and channelizing in right direction.
The challenge of introducing change is the crucial task of changing the mind-set of people so that they feel comfortable with old habits and the deep rooted practices, even when they are misdirected. People prefer status-quo in order to avoid change. It is the inertia of these status-quo seekers of doing something in a different way.
Hence, it is the major task of the lenders to break down these comfort zones through injecting and bolstering the sense of urgency. It can be done in different ways; We way to raise organisational goal in terms of increased market share or revenue; another way is to go in for professionals from outside for diagnosing the problem area and bringing up the performance level.
Again, managers at various levels are expected to always question themselves of their perceptions and the existing practices.
6. Reinforcing Change Success:
In case the change-leaders and change-teams are convinced of an early success, it is the proof of the fact that change has worked. This gives a kick-start arid the momentum continues to propel and impel change efforts pushing forward. This should be brought to the notice of people which helps to get a lasting commitment to change.
7. Continuous Learning and Change:
Effective implementation of change warrants turning of an “existing” organisation into ‘learning” organisation and “creative” organisation in which people learn continually and put forth their new ideas which are innovative and creative and share these ideas with others.
This process can be further facilitated by making the organisation structure more flexible and easy gliding where people at different layers and at different points of layers communicate freely, frankly and immaculately.
Organisational Change – Barriers: Behavioural Barriers and Resource Barriers
Inspite of the fact that the organisational change is almost inevitable, organisations are forced to face certain restraints or resistance or barriers to change. These barriers are broadly of two kinds namely, behavioural and resourcial.
When we take of behaviour, it relates to individuals and group of individuals or bunch of groups. That is it is the ‘mind-set’ of the people which influences the way they perceive, think, feel and act in any situation that calls for change. People resist change because of their working of their mind sets.
In case of individuals these reasons for resisting change may be economic, social, and psychological in nature. Group resistance is mainly caused because of the fear that they more remain cohesive and well-knit group to fight for a cause. They have a very song sense of belongingness or loyalty and commitment to group which one can call as group solidarity.
Organisational resistance stands for individuals and groups together resistance. These causes of resistance may be threat to power, group inertia, organisational, structure, and threat to specialisation, sunk costs and resource constraints.
Professor Victor S.L. Tan says that on an average ninety percent of organisational programmes change. Good many sound programs that change for better are forced to be landed than being allowed to take off. This is no because the activities and plans spot light only on process, technology, strategy or organisational structure. Where one element makes all the difference that is the mindset of the people.
Another way of classifying behavioural barriers is categorise them into two kinds namely “intertial” and “conscious”. Inertial resistance to change arises from the existing perception, beliefs and habits of work in the organisation. Inertial barricades are critical factors whenever the strategic requirements warrant changes of culture, management style and management preferences.
The impact of inertial forces is to delay or distort awareness, understanding and response to strategic requirements. As opposed to these, ‘conscious’ resistance consists of deliberate actions or inactions that are intended to delay or deny change, on the part of individuals or groups. Conscious resistance may be overt or convert, ranging from foot-dragging to outright organised challenge-springing from a variety of motivational dimensions.
In essence, people resist change because they have a very strong fear of loss of control. The reason is people do not want to enter the umbrella of uncertainty emerging from change and by nature they prefer status- quo.
The reasons are very simple because they find it safer to remain under conditions of stability or status-quo where they have become one with the past and proven practices. This state of affairs does not snatch their comforts in terms of perceived consistency and certainty as opposed change which brings to them pains, risks, ambiguity and penalties or less rewards.
Resource barriers are nothing but resource constraints. These resources-may be financial, technological, marketing and personnel-act as barriers-when they are insufficient or inadequate quantitatively and qualitatively to bring about change for the better future status.
Thus, all companies cannot be Reliance Group of companies just as all ladies singers cannot be Lata Mangeshkar or gents Singers Kishore Kumar. All cannot be ‘Sony’ because its a Sony. Though they can be, they do not have the resources to put in.
The market shares enjoyed by M.N.Cs-in businesses- manufacturing and trading as many potential Indian companies lack technological superiority, innovations, supply chain management knowledge of market and the brand management and so on. To compete with these MNCs, Indian companies will have to make their products and services better, cheaper, adequate and timely.
Organisational Change – Efforts to Overcome the Resistance to Change
The question before strategists is-how to overcome these barriers to change? or resistance to change? These efforts can be at individual, group and organisational levels. However, organisations are made up of individuals and groups an attempt is made to enlist the efforts at organisational level.
Bringing about change in mind-sets is done by whom? Obviously, it is leader. That is the top brass is to provide role models. It is the quality of leadership that brings about change that is conducive to bring about desired type and level of change in the organisation.
Professor Victor S.L. Tan gives recommends a seven points programme for changing the mind-sets:
1. Decentralising the organisation and empowering people
2. Encouraging creativity, innovation and experimentation
3. Rewarding those who manage change well
4. Fostering a democratic work-place based on trust instead of fear
5. Encouraging the use of power of influence rather than authority
6. Redesigning work to build responsibility and ownership in people
7. Developing team-spirit and cooperation among the staff.
Again Professor Victor S.L. Tan ten basic shifts in minds for Asian managers so that they can keep their organisations highly sensitive, responsive and flexible.
Change for the better is impossible unless the organisation has conducive atmosphere for change. The high yielding systems such as total quality management (TQM), total preventive maintenance (TPM), total cost management (TCM), six-sigma, re-engineering, cluster dynamics, re-organisation and the like are likely to fail because the management is disabled to bring about change in work-climate.
That is why Professor Victor S.L. Tan says that even the well-orchestrated change will fail if the environment is not conducive; the plans, efforts and morale get defeated along the way; thus, it is necessary to develop an environment that is positive for change.
To nurture the staple of conducive environment the leaders at the top are to:
i. Develop a Compelling Vision:
The companies are expected to develop a strategic vision that generates creative tension amongst the executives and employees, inspire them to work with sizzling zeal and provide them direction towards the final destinations of success and growth and prosperity of the company.
ii. Empower People:
To bring about change with greater degree of success, there is need for whole-hearted support and participation from the executives as well as employees at all the levels of the organisation. The point lies in collective thinking and acting than demonstrating whims and fancies, status ego and not using the powers.
There is need for unity of thought, purpose and action; it needs empowering the people at all levels where one feels proud that he or she has been recognised to contribute towards implementation.
iii. Construct a Climate of Trust and Frankness:
The leaders of the organisation are to structure a lively climate of trust and frankness that helps them to win the hearts of people down the levels.
In the words of Professor Victor S.L. Tan “Building trust begins with openness; people must be able to communicate openly from the top of the organisation to the bottom, and Vice Versa. People should be able to speak without fear of being victimised because of their views being different from those of their leaders. Fear detains the creativity and talent of individuals”.
Hence, in implementing change each one’s contribution makes a good deal of difference which is possible through frank exchange of ideas and suggestions.
iv. Prepare People to Shoulder Risks:
Change calls for taking risks. By nature; people avoid change because they do not want to take risk as they have fear of failure. However, people in the organisation can turn venture some when the leaders move forward to communicate the very change plan, train, demonstrate the methods of change and carry out trials, or trial runs.
Variances will be of high degree at initial stage which are to be tolerated; they are to stand behind the people who are affording to venture risk; they should accept the responsibility for the result of the implemented change-good or bad-low or high. This builds the confidence of people to take risks.
It is very essential that the people should know-why change? What is the motive behind change? What is that justifies change? People are eager to know the answer to these questions before they are asked to act upon. Hence, it is very essential to bring home the rationale behind the change which is possible through effective communication.
Unfortunately, most of the managers communicate either too little or too late. The result is that people who are under the influence of change, near about it through unofficial or informal means leading to widening the communication gaps. In spite of holding the meetings, issue of circulars the very purport and the philosophy of change remains an ice-berg.
To make people to accept change and to do away with resistance to change, the reasons, benefits and side-effects of change should be brought of their notice in an impressive, impelling and convincing manner.
The rationale behind change may be- improving the level of efficiency and effectiveness of day-to-day performance, meeting the aspirations of customers, growing by following on innovative strategy, moving from- followership-to challenger ship-or leadership in markets, excelling competitors by product modification and refinement or using extension strategies to elongate product life cycle, achieving the overall improvement in the organisation and so on. In short, leaders or the managers are to sell well the package of change.
Getting peoples commitment for change is a must. It is because, it is something more than empowering the people and injecting interest in the work. There is a difference between ‘interest’ and ‘commitment’. According to Mr. Kenreth Blanchard- “when you are interested in doing something you do it only when it is convenient. When you are committed to something, you accept no excuses, only results”.
That is commitment is result oriented approach. The KL Strategic Change Consulting, of Kaula Lumpur—Malaysia, conducted in-depth research in companies that have implemented change. The findings of the research demonstrate that winning commitment or gaining commitment to change is hexagonic.
That is six components are very critical in winning commitment of people to change.
It pays to understand these-six-A in brief:
The starting logical point is to create an awareness about change via continuous communication to win- winning commitment. Proactive communication is more suitable than surprising people with a sudden change. Creating an awareness is conducive to build the atmosphere of trust and frankness.
An agreement among the people at work to change, which is possible by addressing the issue in an objective and impartial manner by the leaders.
‘Acceptance’ and ‘agreement’ are the two entirely different things having a gap between them. Agreement is more at a mental level while acceptance is at emotional level. Getting the acceptance for change implies appealing to the hearts of employees by addressing their personal concerns.
Moving from agreement to acceptance is a long journey because these personal concerns are real and myth-both emotional and psychological. We very often see people reject change because of fear, insecurity and uncertainty. It is the leaders’ role separate real concerns from emotional and imaginary or psychological concerns. It is the effective leadership that turns the negative acceptance into positive by appealing the plus points of change.
Action of the people is one of the tests of their commitment for change. That is why, leaders are to encourage people under them to act for change. The greatest weapon for this is reward system supported by their guarantee to stand by along with them during trial runs and outcomes emerging out of change.
To charge or stimulate their actions for change, the leaders are to ensure that they are safe and secure in the process of change. They should coach, teach and encourage to take bold actions and to learn from change.
There is need for a system of accountability to verify whether people are really acting towards change. Accountability is possible only when they are assigned certain responsibilities or tasks along with authority. The performance of the people is to he continually monitored through periodic reviews of progress chased.
This is the terminal stage where the total internalisation of the change within the people who are working for the organisation. This is the stage where their thinking, feeling and actions involved in change are integrated to bring about the expected change.
This is the final indicator which spells out or projects the degree of change as opposed to desired change. It is final test because, the total physical, emotional, psychological and intellectual change within the organisation to achieve the expected change have taken place.
vii. Resource Leverage:
While discussing the barriers to change two broad areas were touched namely, behavioural and resource constraint. As against resource constraints, resource abundance and the resultant ability to make multiple bets and to sustain multiple failures are substitutes for disciplined and creative strategic thinking.
However material advantages have proved beyond doubts as poor substitutes for the strategic creativity emerged by resource scarcity. This takes us to get maximum out of the minimum available resources. Hence, “resource leverage” is the process of overcoming the resource constraints by creative strategic thinking. Here, creativity means the exploitation of all the possible opportunities by diving into bottomless pit.
Studies conducted by professors none other than -Gary Hamel and C.K. Prahalad have demonstrated that the Japanese companies’ and corporations’ success is more attributable to their absolute resource leverage than their unique system of management. They pinpoint that change leverages of technology, marketing, quality and costs have played more important role than Japanese management style and system.
That is, Japanese companies preserved technological leadership with pretty small budget of research and development, built brand loyalties with much lesser advertising outlay, enlarged their distribution networks more cost effectively or improved customer service-moving from consumer “satisfaction” to customer “delight” and planning to move from “consumer delight” to consumer “e-lite”, without additional resources.
The living examples all over two world are – Honda of Japan established leadership in its core-competence area of engines and power trains despite a much smaller research and development budget than General Motors, no. one Company of fortune 500.
NEC succeeded in gaining market share against Siemens-tele-communications equipment. Texas Instruments-semi- conductors, and lBM-Computers-despite, for most of its history and research and development budget substantially smaller than that of its rivals. Chrysler developed its small car, the Neon, for a fractions of the resources typically required by Detroit.
IBM challenged Xerox in the copier business and failed, while Canon, a firm only 10 percent of the size of Xerox in the mid-1970s eventually displaced Xerox as the world’s most proteific copier manufacturer.
There are five major ways of achieving resource leverage.
a. By more effectively concentrating resources on key strategic goals
b. By more efficiently accumulating resources
c. By complementing resources of one type with those of another to create higher order value
d. By conserving resources whenever possible and
e. By rapidly recovering resources by minimising the time between expenditure and pay back.
These broad categories of resource leverage further have sub components.
Let us know as to what each sub-component means – Concerning – building consensus on strategic goals; Focusing – specifying precise improvement of goals; Targeting – emphasizing high value activities; Learning- fully using the brain of every employee; Burrowing, accessing resources of partners; Blending – combining skills in new ways; Balancing – securing critical complementary assets; Recycling – reusing skills and resources; Co-opting – finding common cause with others; Protecting – shielding resources from competitors; Expediting – minimising time to pay back.
viii. Designing Learning Organisation:
Let us take a surfing than having a close-up picture. One cannot think of learning organisation without reference to Professor Peter Senge. There is a very close and deep relationship between learning organisation and strategic management.
The strategic management of today, is not merely an exercise of top management holding annual strategic meetings. What is the crux of the issue is perherennial collective intelligence, imagination and creativity of the people who make together an organisation. Professor Peter Senge very aptly remarks – “the key is not getting the right strategy but fostering strategic thinking”.
Professors Alex Miller and Gregary Dess say- organisational change needs structuring an organisation “is which all the members continuously question the status-quo, conduct experiments to see which of these ideas are most fruitful and then move to spread. What has been learned from these experiments throughout the organisation”.
It means that all organisations are not “learning organisations” though present day business environment wants every organisation to be a learning organisation. According to Professor Peter Senge a learning organisation is one “where people continually expand their capacity to create the result they truly desire, where new and expansive patterns of thinking are , nurtured, where collective aspiration is set free and where people are continually learning how to learn together”.
He states further that behind appropriate policies, strategies and structure are effective learning process, only when the planners reconceptualised their basic task as fostering learning than devising plans did their insights begin to have an impact.
Professors Alex Miller and Gregory G.Dess in their title “Strategic Management” have given contrasting features of ‘learning’ and ‘tradition’ organisations, on page 381, published by McGraw Hill Companies, Inc., New York-Second Edition 1996. They say that learning organisations are not brought into existence not by accident but they are the products of successful leadership.
These learning organisations are the result of leadership abilities of aggressively setting out to build an organisation that is capable of learning and actively working to make them happen.