Thursday, 1 May 2014

Change Management:Its strategic Imperatives in the Organization.

The literature on strategy states that strategic change management provides the rear opportunities as well as challenges,(provided top management sees this as such)devoid of internal politics for companies to achieve the desired turn around of their economic fortunes. But the issue has never been about the need for change, but more of how to go about it and its direction, its ultimate outcome; because all change management efforts have pretty high casualty rates in human terms. And depending on the attitude or philosophy of whom it is on whose shoulder the effort will lie; is to the extent of the human effect. Whichever way, change management efforts that achieve results  do so at some cost, however minimal we may want them to be.

Basically, two tenets govern change situations and these are, 1) that a change manager should understand the outcomes people in  and out of the organization must expect and understand how they will behave towards his or her leadership and the effort itself, 2) that the leader must change the outcome people expect in order to change their behaviour positively towards the new order.
The problem has always been about how those that should drive the change effort approach the task; more often it taken as an heroic effort or some ego driving thing, which then elicits the opposite reaction from employees. Henry Mintzbeg,notable professor of management studies, is of the view that most firms over state change management, often seeing the view that "change only comes from the top".He further declares that the idea of change management in American corporations is "cultic"of heroism and driven by outsized corporate ego.He contends that most organizations succeed at change management not because of what top management did,but because of the "small change efforts that begin at the middle or bottom of the organization........which are belatedly recognized as successful by senior management".

John Kotter,in his article "Leading Change:Why Transformation Efforts Fail," in the Harvard Business Review,(01/07),Volume 85,page 96,offers us his perspectives on the subject. He is of the view that change management efforts often come to nought because they move too quickly or are slow at implementing changes;at other times are careless about it.In moving too fast top executives fail to assess the likely risks inherent in the process, tiring up the notion of urgency where none perhaps exist just to motivate behaviour towards the change desired.
Organizations wont change until individuals in it change, is an instructive mantra. It is the individual change management that coalesces into that of organizational change management. As each employee applies him or her self to their work function differently, this is multiplied across the organization. But then individual change management is dependent on the following(what the PROSCI model calls ) ADKAR,meaning: Awareness, Desire, Knowledge, Ability and Reinforcement.
To achieve the desired change successfully, the individual employee must possess the awareness of the need for change, have the desire to be involved and support the change effort, the ability to implement the required skills and behaviours and finally, reinforce  all of the above to sustain the change effort.


In recent surveys on transformational change efforts, chief executive officers reported that 75% of their change management efforts failed. These efforts failed not because they were based on faulty assumptions or high fallutin targets or strategies; but rather around organizational re-designs, restructuring or new efficiencies with the hope of getting everyone to share the vision and work with these strategies. These CEO's failed to notice that their people didn't want to change because they didn't believe in the change they were "foisting" on their organizations.
In identifying the sources of failure of change management programs, the lack of consensus between the top and bottom of the organization has been the most critical vector. Even though the sense of urgency may be driven by outside sources, it is imperative that leaders within the organization  build the needed consensus to drive and sustain the transformation process. The consensus must begin from the board of directors to the shop floor, coalescing to create the shared vision for the change. This shared vision must be clearly thought out step by step, into short term,mid-term and long-term goals; with quick win goals emphasized in order not to flag the initial momentum gathered for the effort. Flagged momentums are often difficult to reignite.


Behavioural change is a precursor of successful transformation efforts. It is a key ingredient in all change management efforts. Change management succeeds or fails on the first hurdle of behavioural modification. Attempts therefore must be made to first of all resolve the behavioural factor because it rests on this pillar. But why is this so? Human behaviour is difficult to predict, as it is difficult to alter more so when 'enamoured' of situations it cannot control. A typical change management situation is that of mergers and acquisitions where under the traditional change model employees undergo behavioural changes or swings of "denial,resistance,exploration and finally commitment". Most CEO's fail to acknowledge the fact that employees must go through this emotional rollercoaster of behaviour. Failure on the part of top management in charge of transformation processes end up having employees who are burned out before even the process has begun, to overworked and demoralized work force.
Organizational psychologists state that employees are not overtly or covertly subversive of change management efforts; instead they "may be unwittingly caught in a competing commitment.....which is a subconscious hidden goal that conflicts with their stated commitments" to the situation at hand.
Kegan and Lahey in their article,"The real Reason People Wont Change"(HBR.On Change,2011),argue that based on the above assertion,managers in change management situations must reflect individual attitudes to the process of change within the context of the change model earlier enunciated and guide people through the exercise of behavioural change as a  priority with understanding and sensitivity fitting this activity within the strategic change management process.Competing commitments they assert make "people immune to change.Worse,they can undermine your best employees-and your company's success"For a fuller discussion please see the book;page 119-136.

It is axiomatic that culture is one of the critical parts of an organization's DNA.A change management process without a review of  its readiness(organizational culture) in change is an exercise in futility. Ellen Wallach,defines organizational culture thus:"culture is like pornography; it is hard to define, but you know it when you see it".Basically, organizational culture is the gamut of commonly held beliefs,values,attitudes and behaviours of an organization. Organizational culture essentially derives from the founding of the organization , its owner/ founder and its historic trajectory through the course of time. Organizational culture is unique and diverse;often personal in a way, since it gives individual identity distinguishing it from others.It is in the way "we do things in our company",also expressed in the social norms and shared values.

In conducting an organizational culture review, the following  steps are needed:
(1) Assess the current status of organizational culture
(2) Obtain information regarding how the current culture supports quality, effectiveness and customers.
(3) Gauge the readiness of staff for change and their ability to traverse the journey
(4) Identify and address organizational forces likely to drive or impede culture change(remembering that competing commitments of some employees can impede the commitment of others to the change management process)
(5) Create a vision for the organization's "ideal" culture
(6) Define the specific changes that need to take place
(7) Incorporate this knowledge into the strategic change management vision statement.(www,;"From Crisis To Control:The Strategic Change Management Process)


We examine how change management or rather how "external conditions,namely the rising  economic tides that formerly lifted so many boats regardless of how well or badly they rowed",are not likely to make a lasting return any time soon unless they undertake the necessary painful decisions to turn the tide through change management.
As economic tides buffet the organization so do internal conditions namely,skills shortages,the mismatch between competencies and external imperatives occasioned by increasing sophistication of customer demands.Change management imperatives will also include maturing markets,slower growth,lingering debts from high leveraging, ageing work force and escalating cost of manufacturing inputs,supply chain constraints due to competitor actions. Increasing complexity in the industrial landscape forces managers to keep having to reinvent and reimagine their organizations in an emergent way,thus upturning prescriptive strategy models which before now were sacrosanct.

To the question how does change management imperatives affect the structure of an organisation vis a vis its strategy?We bear in mind Alfred Chandler's dictum,that " structure follows strategy".
What is strategy?Strategy we define as the determination of the basic long-term goals and objectives and the adoption of courses of action and the allocation of resources necessary for carrying out these goals and objectives.
Structure on the other hand,is the design of the organization through the firm and how it is administered;involving two spheres,namely: 1) the lines of authority and communication between different levels or stratas of offices,and 2) managers/officers and the information and data that flow through these lines of communication and authority, vertically and horizontally.

Change management affects the structure of an organization in one or more ways,like for instance,when an enterprise grows through diversification,(geographic and product),the consequence of which will be the strain on existing administrative structure due to increased complexity in entrepreneurial and operational activities. These changes call for multi-divisional forms or new operating divisions or the need to expand the controlling office-all require a new structure.
The obverse of course occurs when enterprises are forced to downsize or rightsize due to dwindling market share or product obsolescence; the scenario prevalent here is one of divestment and plant closures with the attendant contraction of structure or its disappearance.


 Just as Chandler identified how single-unit business organizations grew into umbrella type structures with autonomy and shared overheads, the  present demands of the market place, customers and competitive pressures, has necessitated the alignment of structure and strategy, which is strategy driven and performance oriented. Implied in this framework is the axiom that a given strategy must reflect the ever changing environmental conditions and through proper diagnosis, identify organizational weaknesses and gaps in performance which will give way to a retrofitting of the structure through a design process that generates alternatives to the existing order. A new organizational design within the context of change management, sign-posts new roles and responsibilities for fast decision making, the development of  values and norms for culture alignment with the new strategy; included in this are new sets of rewards and metrics for performance, as well as the identification of new skillsets and capabilities required to execute the strategy-structure alignment framework.In their article, "Meeting the Challenge of Disruptive Change"(Harvard Business Review on Innovation,2001), Clayton M.Christensen and Michael Overdorf,stress the need for the development of new capabilities within the context of a new organizational design,which creates new organizational structures within corporate boundaries in which new processes can be developed;spin out an independent organization from existing organization and develop within it the new processes and values required to solve the new problem; acquire a different organization whose processes and values closely match the requirements of the new task.


It is trite to state that a learning organization is the one that continually reinvents itself ,poised to withstand the vagaries of fast-paced changes in the business environment and prosper therefrom. Kaplan & Norton;(2007) note the fact that most companies in the present day operate in very turbulent times and environment;although armed with complex strategies, which in the authors' view are valid  when they(strategies)were launched, yet lose their sinews due to the ever evolving business conditions."In this kind of environment, where new threats and opportunities arise constantly. Companies must become capable of what Chris Argyris calls double-loop learning, that is learning that produces a change in people's assumptions and theories about cause and effect relationships"(Culled from, Managing For The Long-Term; Harvard Business Review,July-August,2007;"Using The Balanced Scorecard as a Strategic Management System,"p:106.

Behavioural change, we have stated earlier is a sine qua non in change management which in turn depends on the receipt of new "information". By new information we mean learning which comes from the conversation between the people leading the change effort and those who are expected to implement the new strategies, manage the context of change in the organization as well as the emotional connections to it for the transformation to occur Duck,J.D;(1993;pp:2-3).
A typical learning situation for instance is that which involves acquiring new beliefs,behaviours,skillsets and capabilities for the transition of an engineering-driven, product-centred company to a customer-focussed marketing organization. This requires a paradigm shift,the challenge of which is not that  people are involved, but that the real test is in getting innovation of mental work instead of the replication of physical effort.It is basically teaching people to " think strategically, recognize new patterns, anticipate problems and opportunities" as they see them or even before they occur.This Teutonic shift in corporate attitude may appear easy when 10 to 20 people are involved,the real test is in getting this message to several layers of offices and levels; complexity bound if the enterprise is layered across national boundaries or divisions to tens of thousands of employees.

Organizational restructuring is about the re-orientation of human systems,the structure of which includes the "beliefs,world view and mental models of leaders and members"; changing this system structure requires changing the belief system that underpins its observance by personnel in the organization.The process of changing and re-orientating this belief system structure is called learning which effectiveness is predicated on clear,open communications throughout the organization.
At the macro level,organizational learning which forms the aggregate of individual learning of leaders,managers and employees,must be continuous in a world that is constantly on the cusp of change.
Learning is conversation across functional silos,learning is communication up and down and across organizational boundaries in single-unit and multi-divisional enterprises. Learning is education which provides employees with new skills,capabilities and attitudes to implement change.

The American Productivity and Quality Center,for example, enumerates six key elements in the change process that education in the learning framework can help to improve,namely,promotion of organizational values,provision of necessary skills or knowledge to new hires,provision of skills for career progression,provision of new skills for lateral job changes within the organization,preparation of employees for jobs outside the current organization and finally provision of a benefit to employees(rewards and metrics).
The APQC learning framework for change management is predicated on the notion that change is constant,learning must therefore equally be continuous.A perfect example of this is Sears Corporation,an American icon,which uses its educational program,including "town hall meetings and learning maps" as tools to communicate and converse with its 300,000 employees or associates as Sears chooses to call them.Sears goes ahead to establish the Sears University as a permanent vehicle in its continuous learning process.To this end for instance, in 1996, 17,000 of Sears personnel  attended courses on best practices,business knowledge and leadership skills.
And in furtherance of best practice in change management, the APQC documents companies that on a continuous basis conduct regular surveys on employee attitudes and behaviour in relation to business performance,disseminating results widely to the workforce.Doing this ensures that employees are on the same page with the leadership of change management in understanding the raison 'deter for change,its process and changes to the culture required and whether the imperatives are being met for changes to be made to the process( For a fuller reading,please see ,Organizational Change:Managing the Human Side,an APQC publication,1997 organizational change consortium benchmarking study)


Readers will notice that we have left the leadership factor in change management question for the last.This is not because it is the least important of factors inhibiting successful change management. It is noted that these factors are not in the least the only ones.As a constantly evolving taxonomy, readers may also identify other critical factors which will enrich future theoretical developments in change management.
Without doubt,leadership lies at the very heart of all organizational change efforts, from the identification of the need for change to the resolution of same.One company executive of a large American corporation once identified change management process " like an organization undergoing five medical procedures at the same time.One person is in charge of the root-canal job,someone else is setting the broken foot,another person is working on the displaced shoulder and still another is getting rid of the gallstone.Each operation is a success but the patient dies of shock".

The scenario so graphically illustrated by the company executive is emblematic of the difficulty involved in transformations and why they fail (Kotter;2007).
Leadership in change management is like that of the alchemist who brings together all materials in a formulae to create a panacea.the process of alchemy is one of transformation or an algorithm.Duck;(1993) likens it to the art of balancing,managing change.The leader's job,according to the author,is to be a "visible champion for the transformation,articulating the context and rationale for the new corporate direction.Working out the guidelines and ensuring that they are understood, have the confidence and  is used".......

Leadership qualification means that the leader of the change effort is first and foremost team captain,have proven talent and credibility,understand the long-term vision of the company,have a complete, knowledge of the business and the confidence of the board.
Kotter,(2007) in his article,"Leading Change",Harvard Business Review,provides the industry with change management methodology in his eight step schema of organizational transformation,namely,establishing a sense of urgency,forming a powerful guiding coalition,creating the vision,communicating the vision,empowering others to act on the vision,planning for and creating short term wins,consolidating improvements and producing who can implement the vision and lastly,institutionalising new approaches.Kotter's schema represents the "holy grail" in my thinking of change management,as it encapsulates the algorithm of the process wherein all the factors that are involved in change process are covered to achieve the performance required.

As a learning organization,it is the leader's job to organize all the elements involved in the change process,educating,training and preparing the organization to think,feel and act differently.Duck(2007),suggests that successful change management in companies that embarked on it were of those  leaders who looked at the issues congruently between operational details and the "little matter" of employee attitude to the change process.

In summary,the real contribution of leadership according to Duck,(1993),"in a time of change lies in managing the dynamics ,not the pieces.The fundamental job of leadership is to deal with the dynamics of change,the confluence and congruence of the forces that change unleashes so that the company is better prepared to compete".

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