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The dynamic nature of the external environment in which organization operate necessitates a Proactive approach to change. Change is inevitable in the business world. The survival of organization depends on their adaptability. It become necessary for them to be able to predict
Change and be prepared for it. Companies grow their wings by expanding into new competitive spaces and these spaces undergo change, new technologies emerge, and customers change Competitive spaces undergo change, new technologies emerge, and customers change. But companies sometimes fail to change and make the most of new opportunities because they are still trying to get the best out of the old opportunities. They find this convenient and less risky.
Steering mechanisms in organizations grow as the organizations get involved in more complex activities. These steering mechanisms are essential required to make meaning out of the innumerable activities that go on inside the organization. Steering mechanisms are created to align the organization with the founder's vision, and also to align the company's vision with changes in the marketplace. But these objectives may be contradictory. The founder's vision might not be relevant in the new market scenario. While most of organizations have mechanisms that are aligned with their vision, there are a few organizations in which mechanisms are aligned with the realities in the business environment.
Only organizations in which mechanisms steer the organization in line with business realities can remain tuned to change. Obsolete steering mechanisms ignore market signals. As managers rely on steering mechanisms, whenever an unexpected circumstance arises, they tend to ignore any information that does not fit into the existing mechanism. When managers address new problems, in such situations, managers are often not able to work out; people in the organization resist change. Defensive mechanisms stop an organization from adapting to change.
Transforming an Organization
Transforming an organization requires initiative, cooperation, and a willingness of the employees and managers in the organization to make sacrifices. Though change bring certain amount of pain, an organization attempting to change can minimize this pain by establishing a sense of urgency, creating a guiding coalition, developing a change vision and strategy, communicating the change vision, empowering employees for broad-based action, generating short-term wins, and consolidating change. Each step is part of the process of change, and lasts for quite a long time. Mistakes made in any of these steps can undermine the momentum of the change process significantly. The steps are explained in detail below:
1. Establishing a Sense of Urgency
Complacency that is when one is self satisfied and show no sign of coming out of that zone. It is one of the reasons why organization doesn't change. Complacency prevails in the organization for the following reasons.
There are no signs of visible crisis. For example firm is not incurring any loss; As a result managers and employees feel comfortable and do not take change seriously.
Employees and managers work in an office environment that still reflects past glories and not current realities. As a result, they are not reminded of where they are, and where they are headed. The structure of the organization defines performance department wise but none of these reflect the overall performance of the organization on parameters such as total sales, net income. This mechanisms prevails an environment where employees are not concerned with the organization objective.
Managers and employees seemed to want to avoid these. When managers in the organization do not accept responsibility for growth, naturally a sense of complacency prevails.
Lack of appropriate performance feedback systems. Even when the company is losing its market share because of the poor quality of its products, the company hardly receives any complaints from irate customers because of the absence of a mechanism for receiving complaints.
1.1 How can one create a sense of urgency?
To establish a sense of urgency one has to take bold and risky actions such as drawing up a balance sheet reflecting losses, selling luxurious headquarters which the firm can no longer afford, ROE targets. A sense of urgency can be created when the factors that breed complacency are removed. Some steps that can bring urgency in place of complacency are:
Establishing systems for evaluating manager's performance on the basis of their contribution to broader performance of the organization.
Establishing system where unsatisfied customers, unhappy suppliers, and disgruntled shareholders on the one hand and employees on the other can interact and this help employees to come out from their complacent situation.
Asking consultants to participate in managerial meetings, so that the managers at the meeting get to know a different perspective from their own.
Highlighting future opportunities, and the current inability of the firm to capitalize on those opportunities.
2. Creating a Guiding Coalition
In initial stage often programs aimed at change get the support of only a few people and resources, but to progress, and attain successful change, wider support through additional resources and people are essential. Generally a coalition is formed to guide change in an organization. This coalition usually comprises the CEO and his team of senior managers, and other managers and employees. The coalition should be powerful enough, in terms of titles, information, expertise, reputations and relationships, to guide change in the organization. Whenever possible, the coalition should try to engage board members, union leaders, and even key customers, to gain backing for bringing in the necessary changes.
A sense of urgency among managers eases the process of creating a guiding coalition. This sense of urgency at the managerial level helps the top leadership to bring suitable managers together, and promote a shared understanding of company's problems and threats. Such an understanding creates trust and facilitates clear communications among the coalition members. Organizations that succeed in bringing change are often led by powerful team at the top.
3. Developing a Vision and Strategy for Change.
The guiding coalition needs a clear vision for the future. The vision provides the direction in which the organization needs to move. Hence, it is referred to as the change vision. This vision should be easy to communicate. It should appeal to customers, stockholders and employees. When the vision for changes arises from a single individual often it is not clear. After a thorough discussion of the vision by the partners in the coalition, the vision become more clear, and the coalition can even chalk out a strategy to achieve the vision.
An unclear change vision can derail the transformation of a company. Without a guiding vision, the efforts aimed at change are fragmented, and amount to nothing more than confusion as they are often incompatible. Efforts without a clear vision are bound to fail, even if plans, directives, procedures, programs, goals, and deadlines are properly laid out.
A change vision should be compelling enough to motivate fundamental rethinking at all levels of the company. However, it should not be impossible to realize. If the change vision is difficult to attain then it will have no credibility, and change will never take place.
The success of a change vision depends upon the circumstances in which the firm operates, and the leader ability to communicate. The feasibility of a change vision depends to a great extent on the ability of the leader to make others to follow him. Judging the feasibility of the vision also depends on a clear and rational understanding of the organization's strengths and weaknesses, the environment in which the organization operates, and competitive trends. Formulating a strategy that takes into consideration all these aspects is a prerequisite to realizing the change vision.
The success of a company's transformation process depends on how the leader communicates the new vision to his employees and on how readily employees take an interest in the vision.
4. Communicating the Change Vision
Transformation in the organization can be achieved only when change vision is communicated clearly, but often the change vision is not communicated clearly. This happens because the people in the organization, who are unaware of the urgency of the change, don't pay attention to information that clarifies the change vision. This can also happen when the guiding coalition is not coherent in nature.
Managers are comfortable with routine factual communication, but not future-oriented strategizing. The communication of a change vision needs a clear sense of the problem and how it can be solved. Managers tend to blame the so-called limited intellectual capabilities of lower level employees and human aversion to change for their own inability to communicate. These can be real problems, but the main problem is the process itself. Making employees and managers to consider change vision is easy but to "buy" is challenging both intellectually and emotionally.
4.1 How can one ensure clear communication of the change vision?
The language used to communicate the change vision should be simple and not involve jargon. It should not leave any scope for multiple interpretations or misinterpretations.
â€¢ Whenever appropriate, the message should use metaphors, analogies, and examples. These can help paint a clear picture of the future for members of the organization.
â€¢ The change vision can be conveyed well if the guiding coalition uses multiple channels. It can take advantage of meetings- both big and small, formal channels like memos, media like newspapers, and informal channels, to spread the ideas that underlie the change vision.
â€¢ Ideas pertaining to the change vision don't sink in immediately. They need consistent repetition with a view to reminding people in the organization of the ideas.
5. Empowering Employees for Broad - Based Action
Organizational change implies a change in the employee's manner of working and behavior. It requires full support of employees and managers. Very often, the people at different levels in the organization want to move in the new direction visualized by the coalition, but they are hampered by obstacles which block the way to change. The obstacles may be organizational structures, skills, systems, and superiors. To overcome these obstacles, the following steps are necessary:
â€¢ Ensure compatibility between the structure and the change vision: Structures that are not aligned with the change vision block the required action. If the structure is aligned with the change vision at a later point in time, the organizational energies necessary to employ new structures to realize the change vision, may simply not be generated.
Changing structures can be difficult because employees are accustomed to a basic organizational design, and are blind to other alternatives. Also they have invested significantly in the existing structure in terms of personal loyalties and functional expertise, and do not want to shift to a different structure. Though senior managers may appreciate the need to change the existing organizational structure, they might not be willing to arouse dissatisfaction among middle managers and their peers. Hence, any effort aimed at changing the structure must be carefully planned and executed.
â€¢ Train employees: Employees feel empowered and show an inclination to change, when they are equipped with the right skills and attitudes to operate in the intended time, employees cannot be expected to shed all their old skills and attitudes and acquire new ones within a few days of training. Employees and managers need enough time for this. Sometimes, employees are provided training to acquire only technical skills and not social skills and attitudes. It is also common to find that after training the employees, nobody bothers to check how successfully they are employing their skills, and what problems they are encountering while using these skills. Leaders overseeing the change process need to pay enough attention to the new behaviors, skills and attitudes necessary to bring about the desired change.
â€¢ Align organizational systems to the vision: Organizational systems that are not aligned with the vision act as blocks to the required actions though systems need time
To remove all inconsistencies between the new vision and current systems in a day or two may not be possible. This too needs proper planning and consistent effort. For example, the HR department needs time to align the HR systems such as performance appraisal, compensation, promotions, etc. with the new vision.
Confront errant managers: Managers resisting change can derail the process of change. Senior managers confronted with such errant managers must make clear what the organization's expectations are. He should also ask what the organization can do to align the manager concerned with the change vision. If this dialogue does not yield any results, the errant manager should be fired.
6. Scoring Short - Term Wins
If a re-engineering process of organization leads to cost reduction, then it is a win. Similarly if reorganization leads to reduction in the company's new product development cycle from 12months to 5months, then it too is a win. Whatever the size of the organization, some small wins are clearly necessary in the initial stages of transformation.
A short -term win has the following characteristics:
The result of the win should be clearly visible and verifiable.
The win should result in an improvement in the organization.
The win should be outcome of the change effort.
6.1 Why are short-term wins important?
Scoring short-term wins is important for the following reason:
The wins provide justification for short -term costs.
They reinforce that sacrifices made by the organization are worth the effort.
Positive feedback that comes with these wins boosts the morale of the people attempting change, and improves their motivation levels.
They provide evidence that clears the doubts of cynics, and undermines the resistance of people interested in maintaining the status quo.
Short-term wins also step up the momentum of the change effort by converting people who were earlier resisting, to supporters of change, and transforming reluctant supporters into active helpers.
7. Consolidating Change
Any major change takes time to take effect. Short-term wins help the firm continue in the direction of change with the same momentum. But if short term wins are celebrated too much, this can lead to a reduction in the sense of urgency. Once this urgency is lost, forces opposing the change take over, and derail the change process. Change does not take place easily. There are two reasons for this: changing corporate culture is extremely difficult and the inter-connections between the different parts of the organization make it difficult to change anything without changing everything.
One part of the organization influences decision making in another part of the organization
either directly or indirectly. In order to bring about change in an organization, it is usually
not enough to change a particular element in the organization. Several elements in the
organization need to be changed at the same time. In the phase of consolidation, the guiding
Coalition attempts to cash in on the credibility generated through short terms wins. It does so
by taking up larger change projects. More people are brought into change mode to promote
and bring in more changes. The top leadership makes an effort to ensure clarity in the shared
purpose of change, and maintain a sense of urgency. People from the lower levels of the
organizations also start taking initiative, and provide leadership in specific projects. Senior
managers attempt o remove redundant interdependencies to make change easy both in the
Short term and the long term.
Changing Organizational Culture
Organization culture is the pattern of learned behavior that a given group has discovered or developed to cope with its problem of external adaption and internal integration. Culture is a binding force that gives coherence to organizational efforts. It should propagate success and not failure. Organizational culture is powerful, and changing it is difficult because people are selected and indoctrinated with a lot of care. And culture exerts itself through the actions and thinking of thousands of people. To change culture one needs to change all these people. Organization should design structures, management and operating processes and measurement procedures (such as setting target, giving rewards) in such a way that it reinforces the desired culture.
Organizations often make the mistake of expecting their employees to change their culture without providing them the skills required to do so. Employees generally encounter problems in adapting general guidelines to their specific situations. To transform them, the first thing employees need is time. They rarely get sufficient time to change their behavior.
Adults cannot learn to behave in a desirable way just by listening to instructions. He showed that in order to learn, they have to absorb new information, experiment with it, and integrate that knowledge with their existing knowledge like teacher cannot ask her students to learn to behave in a desirable way just by listening to instructions. She should show that in order to learn, they have to absorb new information, experiment with it, and integrate that knowledge with their existing knowledge. It should be kept in mind that large scale change never occurs in a day or two. It is a slow and arduous process.
To succeed during turbulent times, organizations must find ways to thrive- not just survive- amid complexity and uncertainty. Those enterprises that can continually transform themselves in response to constantly shifting conditions gain a tremendous competitive advantage.
But remember organizations don't change people do. Leaders will not be change agent until they can harness their energies and talents and passions of the people they lead. Change- driven without significant across- the- board participation is bound to meet with work force resistance. On the other hand, the co-creation of change is an inclusive process that encourages high employee engagement from the very beginning.