Managing Strategic Change At Public Benefit Organizations Business Essay

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In our era change has become a way of life for the organizations since they are experiencing many different types of change in their internal and external environment. Managing a strategic change is a very complex and demanding task since it deals with the micro and macro and psychological environment of an organization. It is a fact that there is no standard way to be followed in order to accomplish a successful change implementation but managerial implementation skills are necessary requirements throughout the organization. These skills with deliberations and well prepared recipients of change and with a substantial commitment of all the parties to the change may lead an organization to the successful change implementation. In this text there is an analysis of the significant change that the Sewerage Board of Nicosia has faced in its recent history. The Sewerage Board of Nicosia (S.B.N) is a public benefit organization in Cyprus that deals mainly with the design and construction of the sanitary sewerage system in Nicosia and in 1999 has undergone a change in order to update its company culture and of course the its way of operation.

1.1 The Sewerage Board of Nicosia (S.B.N)

The S.B.N as it mentioned above is a public benefit organization which was established in 1971. The S.B.N was responsible for the designing, construction, operation and maintenance of the Central Sewerage system in Nicosia municipality area only. Nevertheless the increase in the demand for the construction of sewerage system to the municipalities that was outside of the 'territory' of the S.B.N, forced the management of the S.B.N to prepare a plan for covering the sanitation needs of the 7 municipalities of Greater Nicosia as well as their suburbs. Having in mind that their competitor which was the Water Development Department of Cyprus that also had previous experience mainly in water management in the suburb of towns, 'knocked the door' for taking a dividend from the 'pie', the need for change was then a vital issue for S.B.N. The time to decide if it should grow and increase its control area or to remain in the close boundaries of Nicosia area was came. A plan for change was prepared for implementation from the January 1999. The change programmed had two distinct phases, the first phase focused around restructuring and bringing in new management control systems and the second stage that launched in 2003 and was described as an organization development. The proposed change plan involved the change in composition of the main committee of S.B.N (addition more representatives from the other 7 municipalities of the greater Nicosia that were not included) and 30 employees based on the S.B.N Technical Department of the organization. The S.B.N organization consists by the technical department (TD) which is responsible for the technical tasks of the above mentioned activities, the accounting department (AD) and the administration department (AD) under of which the TD and AD are linked with the core of the organization.

The management of S.B.N assessed necessary change by analyzing their internal and external position. They found that the TD was not well structured and were also understaffed. The organization's culture was also an obstacle for the change since the whole organization tending to work as a small 'family business'. Further more they are also found that, beside of their experience in the sewerage field, their competitor was well staffed and structured in all of their organization's sections. The management of the S.B.N believed that by restructuring, stuffing and training of current and new recruitment staff of the TD could undertake the project and finalize it with in the budget and time limit and to prepare the organization for the later on management. According to the above S.B.N management were formulated the following goals:

Recruit a Project Manager

Make new recruitments for the Technical Department.

Make training programs for the whole Technical Department.

Creation of an internal Project Management Unit by January 2002

Technical staff ready for the management of the sewerage system by the end of 2012

The S.B.N management in order to proceed with the implementation of the above used tools like SWAT and PEST which helped them to identified the following barriers:

Resistance in all levels of the organization, especially in the TD

The existing culture of the organization

Convinced upper level of management (Head of TD) that the change will be beneficial for the organization.

Team communication in both directions (among head of TD with PMU manager and among employees with the PMU manager and head of TD).

Training and motivation policy.

At that time of speaking it can be said with safety that the change steps that S.B.N followed were successful enough since the desired outcome of the change process is moving on the right track.

2.0 Nature of change

After the identification of what to change the issue of 'how to change' (Balogun and Hailey, 2008) was came up. The nature of the change that the change agent had to select was derived from the result of the evaluation of organization's internal and external conditions and from the outcome of the SWAT and PEST analysis and were deal with the four possible types of change, like incremental, big bang, transformational or realignment change.

By having in mind that S.B.N is a public benefit organization which means that it follows the rules and directions of the Cyprus government, it is understandable that the resistance in any kind of change would be in a very high level. The managers and employees in such organizations don't like the changes due to variety of reasons. Therefore the choice of gradual change was more suitable and more beneficial considering also the fact that S.B.N had plenty of time to implement this change (first phase from 1999 to 2002). By taking into serious consideration all the above the S.B.N management it is assessed that the choice of the incremental change was very right. This kind of change offered a gradual change by allowing to employees to change their behaviors and attitudes and their way of thinking about the upcoming change without interrupting the regular proceedings of the organization. The incremental change was brought through evolution and adaptation and takes place through step by step implementation of change in order to facilitate the whole organization to adapt the change. This movement was on the right way since as it is well known the small adjustments may lead to fundamental improvements. From the other hand it was obvious that a choice of a big bang change nature would not be suitable but catastrophic, firstly, due to the fact that there was plenty of time to use for the above changes and secondly due to the fact that such change would prerequisite radical changes dealing with the overall organization environment, involving key players, the organization culture and values and long term issues pertaining to company growth and employee benefits. In addition to the above a big bang change would be a very dangerous choice for S.B.N since the trade unions are highly involved in the employee's rights and could easily generate or reinforce the high degree of resistance.

By having decided the nature of change S.B.N had to determine the desired end result (mentioned before). Because in reality there is no clear dividing line between realignment and transformation, S.B.N management choose to use a combination of transformation change with incremental change (Evolution) followed by a combination of realignment with incremental change (Adaptation). In general the above choice was taken because the organization required not only shift in strategy, structures, systems, processes and culture but also change to the way of doing things that involve a substantial change like a major restructuring.

3.0 Culture Web

A good way of assessing the extent of change required is to use a framework such as the Culture web (Balogun and Hailey, 2008). With the analysis of the six interrelated elements of the Cultural Web I will be in position to identify those factors that played a significant and catalyst role in the overall picture of the organization at that period of time. Further more i can get a better picture about what were the actual organization needs for change.

Stories: There were many rumors about unfair treatment on the employees of the TD while the rest employees of the organization enjoyed more benefits mostly due to their nature of job.

Symbols: All employees were very proud about the name and the fame of the organization.

Routines: The way of doing things needed to be change, as there was an attitude of spending more time in doing personal things during the normal working hours instead of doing what they had hired to do. There were also the attitudes for blaming each other for any mistakes.

Power Structures: It was found that there was high power distance. Sometimes the decisions of S.B.N managers based on political influences. The management committee of the S.B.N is consisting from people coming from all the political parties of the island.

Controls: The lack of motivation was not a rare phenomenon in such organizations. The appraisal and performance evaluation was depended to the assessment of the manager of TD. The last was not fair for all since not all the TD employees had direct contact for their daily work with the TD manager.

Organization Structure: The absence of a clear organization chart led very often to confusion and misunderstandings. It was also the major problem for the communication problems among the employees and managers.

Paradigm: The employees did not discuss the company's future since they take the ongoing situations as granted.

The results from the above Cultural Web gave us the chance to identify that there were serious gabs in the primary levers of the culture web which appeared to be stories, routines, control, organization structure and paradigm. These gabs were restored in a great manner during the change process.

4.0 Change Kaleidoscope

The management of S.B.N had used the change kaleidoscope (Balogun and Hailey, 2008) to help them in designing a context sensitive approach to change within organization. An in depth analysis of the contextual features that was carried out are the following:

Time: The time of the four years was considered to be enough for this kind of change. Therefore everything was scheduled according to the given time period. Within the four years S.B.N bring new management control systems, recruited the project manager, recruited new staff, adopted a new training programs and finally create the project management unit which by the end of the 2012 will give to the organization skilled and well trained staff for its further needs.

Scope: The scope of the change was recognized and affected mainly the TD. The transformation change was adopted since the change cannot be handled within the existing paradigm and organization routines and because it entails a change in the 'taken-for-granted' assumptions and 'the way of doing things around there'. The time was enough to complete the first stage of the change and to prepare the staff for the future needs of the organization.

Preservation: It was found that the tangible and intangible recourses and competences of the organization were in high level. The current employees of the organization were capable enough and also willing enough to adapt new working processes since they had the know how of doing that. The problem was found to be particularly in the intangible assets that were embedded in the existing culture.

Diversity: The TD of S.B.N could be characterized as homogeneous. Although there was slight variation in attitudes between employees with longer length of service and those who had joined the company more recently.

Capability: It found that the employees belonging to personal or managerial rank are capable enough as they had experienced a number of smaller scale changes in the last some years.

Capacity: It found that in order to meet the target, S.B.N needed to make new recruitments and bring into the organizations new systems. The needs were a project manager and well trained employees but also new offices and new technology advanced computer systems and networks. The time and the money were available for such movements.

Readiness: The management of the S.B.N found that the readiness for change was considerably low since in such organizations employees did not like the idea of change. Therefore the employees were not aware about the need for change.

8. Power: S.B.N management found that the committee of S.B.N, the manager of the Technical department and the trade unions that could threaten with strike action, were very powerful.

5.0 Change Path

The S.B.N management after considering all the above took the decision to adopt a type of change which was incremental in nature and a combination of transformation and realignment in the end result. There was enough time for the changes to be evolutionary as part of the change process to build required levels of readiness, capability and capacity. The change start point was started as Top - Down mainly due to the initial low readiness and low capacity for change, but was followed by some bottom-up activity. Activities such as mobilizing support of change need the top-Down way whereas others such as creating the vision for change need to be more participative. The manager of the TD with the sub managers were asked to be familiar with the change process provided by the change agents which was worked towards internal and external fit for the organization by providing training and counseling, besides assisting the management to formulate recruitment, reward and retention strategies.

5.1 Change Style

For the first part of change S.B.N decided to adopt participative style, since the main interventions involved technical, cultural and interpersonal problems. Accordingly it held a series of meetings with the chosen carriers of change and formulated the possible Resistance to Change factor, besides make a plan for mobilizing the employees regarding the change. At the later on stage it decided to develop the quality of the team communication by organizing internal and external seminars.

6.0 Resistance to Change Factor

According to a research that was taken place had found out that the resistances that SBN had to face in managerial level and employees level were in the factors that are analyzing below.

6.1 Employee resistance

6.1.1 Lack of understanding around the vision and need for change

This consist the major reason of employees resistance since employees do not understand the vision of the organization and what actually will be the benefits for them and for the organization from the change. The less the employees they know the less they answer to the questions of what is going to happen to the organization; How and in what degree will this affect our way of life; etc.

6.1.2 The status quo and fear of the unknown

In such organizations employees used to like the stability in all aspects. They are compromising with the current way of doing things and they also believe that this way is the best for doing things in general. It is also very difficult to try to convince them the opposite due to the fear of unknown factor. The employees do not like the changes because they do not feel safe about the unexpected that will come. Finally they want to continue with the old fashioned way and feel safety in to their environment.

6.1.3 History and Culture of the organization

The current employees of S.B.N faced in the recent history of the organization some smaller changes. Due to the fact that then the organization was much smaller that now the resistance was created by a small team of people. Now the introduction of new technology, the new needs and attitudes lead to the change in culture and in the way of life of the organization.

6.1.4 Opposition to the new technologies, requirements and processes introduced by the change

A lot of employees do not like the change and resist because they do not want actually to change their selves. In S.B.N, employees were opposed to changes that increased the performance and process measurement of their work firstly because this reflected to more responsibility and accountability and secondly because they did not believe that the new technologies would be able to solve their problems.

6.2 Manager resistance

6.2.1 Loss of power and control.

The loss of power and control was one of the most important factors that the managers of the TD resist to the change. With the implementation of the change a Project manager was placed in the upper level of the organization with great influence in most of the employees of the TD that dealing with the design and construction of the sewerage system. The latter did not like to the current senior manager and sub managers of the TD of S.B.N.

6.2.2 Overload of current tasks, pressures of daily activities.

As it used to in such changes the managers continue doing their duties while at the same time had to implement the extra needs for change. The same was happening with S.B.N managers during the whole period of change.

6.2.3 Lack of skills and experience needed to manage the change effectively

It is well known that in such organizations like S.B.N the manager's position is a position derived from appraisal of a person. This means that most of the times these people do not have managerial skills and the experience of delivering a change effectively. Due to the previous fact the managers of the TD opposed in the beginning to any new business processes, systems or technologies that were needed for the change.

6.2.4 Disagreement with the new way.

As a result of the above mentioned lack of manager's skills and experience was the fact of the continuing disagreement not only with the need of change but also with the way of change.

The above factors are in line with the Prosci's Change Management study that investigates best practices in change management that took place in 2003 where 288 organizations from 51 countries participated.

7.0 Communicating the Change

As suggested by the researches like Paton and McCalman (2000) series of steps must be taking systematically towards facilitating the change. The above was taken into serious consideration by the S.B.N management which decided during the period of the four years to take a lot of steps towards the change. These steps were consisted from meetings among all the people involved, internal and external seminars and some other ways for communicating the change that aimed at enhancing understanding, taking fresh steps towards safety and security, involving employees in decision-making, sharing the benefits, assurance regarding maintenance of status and territory.

Enhancing understanding: From the very first meetings the change agents realized that employees were refusing to change anything that affecting their work status. The major problem was that the management want from the employees to deliver the propose change without changing their payment receives. Therefore the only way to continue were by proceeding with the change slowly giving the time to employees with educational seminars to understand what will be the benefits on them from change. It was also a good practice that allowed to employees to see with their eyes the raise of organization performance due to these changes.

Taking safety and security steps: Another way of communicating the change is by reviving safety and security system. This was recommended by Alderfer's (ERG) theory of 'frustration-regression principle'. The employees of S.B.N received very well the fact that with the introduction of the new machinery and technology systems and skill development will going to have better quality in their work life since this will reduce accidents, body fatigues and stress.

Involving employees in decision - making: The employee empowerment can be very helpful in reducing the time in implementing the change Wright (1996). The change agents decided a more employee participation in decision making through brain- storming sessions or formal meetings make employees feeling part of the whole process of change.

Sharing the benefits: it is well known that in such organization there is not much that you can give to the employees as a reward for their effort. Therefore S.B.N management decided to adapt a fair policy of performance evaluation and performance - reward system for the PMU members after the 2004. The employees of the TD welcomed this movement from their management since they felt that indeed they had motivation to continue put their effort for the change. As it was expected some resistance from the employees of the other departments appeared but due to the fact that in such organizations the performance assessments and appraisals of a department do not affect at all the other department's structure and processes it was exceeded.

Assurance regarding maintenance of status and territory: the fact of the new machinery coming into the organization and the new recruitments that was made created a positive feeling among the employees regarding their future.

Effectively planning the change: The change agents after considering all the above once again proceed with the implementation of the change by making some small changes mainly in the training system and the counseling system.

8.0 Change Results

The hard effort of S.B.N management began to bring results by the end of 2002. The project manager was hired and the project management unit was formulated from existing and new recruitment staff. The new project for the installation of the sewerage system in Nicosia suburbs was undertaken by S.B.N. By that time the new machinery and systems give new air among the employees of the organization while at the same time the training courses and external seminars added positively in the whole environment. At this period of time the whole organization was moved in its new offices while at the same time corrected its own structure and recruited new employees. The luxury of four years time gave the advantage to the change agent to recognize the 'mobilize' and 'sustain' phases of the transition, a fact that is very important for such organizations. The latter help firstly into the elimination of resistance from employees and secondly towards a smoother transition. Nowadays in 2010 it seems that everything is on the right track and the employees from the PMU are well trained and prepared for the management of the sewerage system by the end of 2012.

8.0 Conclusions

As it seems right now the S.B.N is on the right track. The choice of adoption a type of change which was incremental in nature and a combination of transformation and realignment in the end result was suitable for the organization. The steps taken towards the change were logical, realistic and aligned with the nature of the organization. These steps were carefully selected and implemented in a way towards that help the organization to change in a smoother way. The creation of a project management unit was something pioneer for public benefit organizations but seems to work efficiently. The contract of the project manager will terminate by the end of 2012 and the members of the PMU will be the persons that will take all the responsibilities regarding the management and maintenance of the sewerage system the next few years. The S.B.N was ready now to move into the future having guarantees its survival. The revising of the future conditions will allow to the organization to continue change since the environment is never static but is changing all the time.