Significant organizational change occurs, for example, when an organization changes its overall strategy for success, adds or removes a major section or practice, and/or wants to change the very nature by which it operates. It also occurs when an organization evolves through various life cycles. For organizations to develop, they often must undergo significant change at various points in their development. That's why the topic of organizational change and development has become widespread in communications about business, organizations, leadership and management.
What's "Organizational Change?"
Examples of organization-wide change might include a change in mission, restructuring operations (e.g.. restructuring to self-managed teams, layoffs, etc.). new technologies, mergers, major collaborations, "rightsizing". new programs such as Total Quality Management, re-engineering, etc. Some experts refer to organizational transformation. Often this term designates a fundamental and radical reorientation in the way the organization operates.
What Provokes "Organizational Change"?
-Change should not be done for the sake of change — it's a strategy to accomplish some overall goal. Usually organizational change is provoked by some major outside driving force, e.g.. substantial cuts in funding, address major new markets/clients, need for dramatic increases in productivity services, etc. Typically, organizations must undertake organization-wide change to evolve to a different level in their life cycle, e.g., going from a highly reactive, entrepreneurial organization to more stable and planned development. Transition to a new chief executive can provoke organization-wide change when his or her new and unique personality pervades the entire organization.
Why is Organization-Wide Change Difficult to Accomplish?
Typically there are strong resistances to change. People are afraid of the unknown. Many people think things are already just fine and don't understand the need for change. Many are inherently cynical about change. Many doubt there are effective means to accomplish major organizational change. Often there are conflicting goals in the organization, e.g., to increase resources to accomplish the change yet concurrently cut costs to remain viable. Organization-wide change often goes against the very values held dear by members in the organization, that is, the change may go against how members believe things should be done. That's why much of organizational-change literature discusses needed changes in the culture of the organization, including changes in members' values and beliefs and in the way they enact these values and beliefs.
How Is Organization-Wide Change Best Carried Out?
Successful change must involve top management, including the board and chief executive. Lsually there's a champion who initially instigates the change by being visionarv. persuasive and consistent. A change agent role is usually responsible to translate the vision to a realistic plan and carry out the plan. Change is usually best carried out as a team-wide effort. Communications about the change should be frequent and with all organization members. To sustain change. the structures of the organization itself should be modified, including strategic plans, policies and * procedures.
The best approaches to address resistances is through increased and sustained communications and education. For example, the leader should meet with all managers and staff to explain reasons for the change, how it generally will be carried out and where others can 20 for additional information. A plan should be developed and communicated. Plans do change. That's fine, but communicate that the plan has changed and why. Forums should be held for organization members to express their ideas for the plan. They should be able to express their concerns and frustrations as well.
The Biggest Mistakes in Managing Change
by Carol Kinsey Goman, Ph.D.
Dr. Goman is president of Kinsey Consulting Sen/ices, Berkeley, CA, specializing in developing "change-adept" organizations and individuals.
From working with executives and managers, I've seen how management of change impacts a work force. Here are the biggest mistakes in managing change -- and the lessons learned.
Not understanding the importance of people. 60-75 percent of all restructuring failed -- not because of strategy, but because of the "human dimension.
Lesson learned: Organizations don't change. People do -- or they don't. If staff don't trust leadership, don't share the organization's vision, don't buy into the reason for change; and aren't included in the planning -- there will be no successful change -- regardless of how brilliant the strategy
Not appreciating that people throughout the organization have different reactions to change.
Lesson learned: Some people are naturally more "change-adept." We need to spot and encourage the early adaptors. Change-adept people are naturally happier in their work because they have come to terms with a world that never stays the same. They move with today's chaotic workplace, rather than fighting it. They are energized by, and actually thrive on, change. Change-adept professionals build greater resilience and not only survive, but flourish in changing times. There are five factors that determine which individuals deal successfully with change.
1. Confidence. Confident people are self-motivated, have high self-esteem and are willing to take risks. Quite simply, they know how good they are.
2. Challenge. With any change, the danger of possible reversals coexists with incredible opportunities for personal and professional success. When change-adept people are asked for verbal images they associate with change, they acknowledge the stress, uncertainty, pressure, and disruption, but they also emphasize the benefits – the opportunity, growth, adventure, excitement and challenge.
3 .Coping. Some people are naturally more flexible and better at coping wth. and adapting to, a complex, fast-paced reality than others. These individuals take charge of change by accepting responsibility and assuming control. To be successful in chaotic times, the trick is not to brace yourself for change, but to loosen up and learn how to roll with it. In your organization, strategies will be planned, announced, implemented, and then- right in the middle of execution - they will all too often have to be altered or aborted because of external changes. What leaders need from employees is the ability to commit to a course of action and, at the same time, to stay flexible enough to quickly alter behavior and attitude.
4 .Counterbalance. Those who are most resilient not only have a job - they have a life. Change-adept individuals compensate for the demands and pressures of business by developing counterbalancing activities in other areas of their lives. They cultivate interests outside of business - sports, hobbies, art, music, etc. - which are personally fulfilling, and they have sources of emotional support. Because employees with counterbalance have a life that includes both work and recreation, they handle stress better and are more effective on the job.
5. Creativity. Change-adept professionals are curious, creative and innovative. You can easily spot creative people in organizations. They are the employees who are constantly seeking ways to improve products, services, or themselves. Typically they contribute ideas beyond the limits of their job descriptions and value any business experience that exposes them to new knowledge and skills.
Treating transformation as an event, rather than a mental, physical and emotional process.
We disregarded the wrenching emotional process of large-scale change or underestimated its depth.
Lesson learned: Large-scale organizational change usually triggers emotional reactions - denial, negativity, choice, tentative acceptance, commitment. Leadership can either facilitate this emotional process or ignore it - at the peril of the transformation effort.
Presenting change with a too positive "spin."
And the more we "sugar-coated" the truth, the wider the trust gap grew between management and the work force.
Lesson learned: Communicate openly and honestly. Not everyone will thank you for your candor, but they will never forgive you for hiding the negative side. You need a proactive, sharing of everything — the opportunities, the risks, the mistakes, the potentials, the failures -and then inviting people in to work on these challenges together.
Not appropriately "setting the stage" for change. All too often, change was announced in an environmental vacuum, with little reason or rationale for what the organization was trying to accomplish and how this change fits into the corporate vision.
Lesson learned: To prepare employees for success, we must give them pertinent information about demographic, global, economic, technological, competitive, and industry trends. People need to know the vision, goals, and strategy of the company. They need to understand the financial reality of the business and how their actions impact that reality.
Trying to manage transformation with the same strategies used for incremental change.
Lesson learned: Incremental change -- continuous improvement, etc. - is linear, predictable, logical, and based on a progressive acceleration of past performance. Transformation is none of these things. Transformation is a redefinition of who we are and what we do. It's often unpredictable (responding to unforeseen circumstance, challenges and opportunities), illogical (demanding people and organizations change when they are the most successful), and most importantly, in a transformative change, our past success is not a valid indicator of future success. In fact, our past success may be our greatest obstacle.
Forgetting to negotiate the new "compact" between employers and employees. The result was that people knew what they were losing, but didn't have a clear picture of what to expect in its place.
Lesson learned: A new kind of relationship, grounded in mutual trust and respect, is emerging between employers and employees. It attempts to align the interests of the organization with those of its employees, to share both the risks and rewards of doing business. The developing relationship between company and worker is changing from paternalism to partnership. Increasingly, it is a matter of finding items that are of value to both the employer and the employee.
Believing that change-communication was what employees heard or read from corporate headquarters. So we focused our attention on speeches, newsletters, videos, and email - only to find out that, from an employee's perspective, the*kind of communication that impacts behavior is 10 percent "traditional" vehicles, 45 percent organizational structure (whatever punishes or rewards) and 45 percent management behavior.
Lesson learned: A communication strategy that is not congruent with organizational systems and the actions of leadership is useless. Organizations send two concurrent sets of messages about change. One set of messages goes through formal channels of communications -- speeches, newsletters, corporate videos, values statements, and so forth. The other set of messages is "delivered" informally through a combination of "off the record" remarks and daily activities.
Underestimating human potential. And when we underestimated potential, we wasted it. This was our worst mistake.
Lesson learned: Trust in the innate intelligence, capability, and creativity of your employees -- and people will astound you. In the Industrial Age, companies squandered immense amounts of human potential on mindless, repetitive tasks and meaningless paper work. It never occurred to leaders in those days that their assembly-line workers had the know-how to rebuild entire car engines, that their "lowly cashiers" easily negotiated complicated bank loans for their families, or were perfectly capable of organizing charity campaigns or running complex volunteer organizations in their spare time. Today, in the post-industrial Information Age no company can afford to waste human capital so rashly. Every talent, every idea, every skill is needed urgently if companies are to survive. The potential of the work force really is the company's greatest asset.