Thursday, 17 June 2010

4 of 5. How organisations change

Leadership does not always wear the harness of compromise.


Perhaps the most asked but least answered question in business today is “What can we do to make our business survive and grow?” Or a more interesting question, “How do we engage our people more so that they create the impetus for growth and transformation?” The world is rapidly changing into something too hard to easily predict, with a hundred opportunities and pitfalls passing by every moment. To add to this confusion, there are hundreds, if not thousands of techniques, solutions and methods that claim to help businesses improve productivity, quality and customer satisfaction. A company President, CEO or business owner has so many choices in these buzzwords, whether they be called Total Quality Management, Customer Satisfaction, Re-engineering, Culture Change or Teambuilding. They are like new shoppers in a giant grocery store: they are hungry, but there are so many brands, sizes and varieties you don’t know what to buy. In response to this confusion, many do nothing, often afraid of making the wrong choices. Others change the techniques they use every few months, using the “programme de jour” method of organisational change, otherwise known as MBS (Management by Best Seller). Neither of these responses help the organisation in the long run.

Over 70% of change programmes fail. However if we always do what we have always done, we will always get what we have always got. Implementing a different buzzword (Total Quality, Just in Time, Re-engineering, etc.) every few months often creates a “whipsaw” effect that causes mass confusion among your people. These buzzwords are often a hammer in search of a nail, techniques applied with no clear focus as to the why, expected results or return on investment.

Perhaps the most difficult decision to make is at what "level" to start: Organisations normally go through four main changes throughout their growth:

1. Formative Period - This is when a new organisation is just getting started. Although there is a founding vision (the purpose of the organisation), there are no formal definitions. This is just as well because normally there are a lot of experimentation and innovation taking place. These changes of creativity and discovery are needed to overcome obstacles and accomplish breakthroughs.

2. Rapid Growth Period - Direction and coordination are added to the organisation to sustain growth and solidify gains. Change is focused on defining the purpose of the organisation and on the mainstream business.

3. Mature Period - The strong growth curve levels off to the overall pace of the economy. Changes are needed to maintain established markets and assuring maximum gains are achieved.

4. Declining Period - This is the rough ride. For many organisations it means down-sizing and reorganisation. To survive, changes include tough objectives and compassionate implementation. The goal is to get out of the old and into something new. Success in this period means that the four periods start over again.

For some organisations the four periods of growth come and go very rapidly, for others, it may take decades. Failure to follow through with the needed changes in any of the four growth periods means the death of the organisation. Some, such as IBM, do it successfully, others, like ATT, do it quite poorly.

Throughout periods of change, which is just about all the time for a good organisation, leaders need to concentrate on having their people go from change avoidance to change acceptance. There are five steps accompanying change (Conner, 1993)

  • Denial - cannot foresee any major change
  • Anger at others for what they're putting me through
  • Bargaining - work out solutions, keep everyone happy
  • Depression - is it worth it? doubt, need support
  • Acceptance - the reality

This is why a worker's first reaction to change is often to resist it. People get comfortable performing tasks and processes in a particular manner. This comfort provides them with the security that they are the masters of their environment. Some of the things that cause them to fear change include a dislike of a disruption in their lives, looking like a fool by not being able to adapt and learn, their jobs might become harder, and a loss of control.

Of course it was not the change in itself that caused the higher output, but rather an intervening variable. This variable was diagnosed as the employee's attitudes. That is, when you introduce change, each employee's personal history and social situation at work will produce a different attitude towards that change. You cannot see or measure attitudes, but what you can see and measure is the response towards that change: Change + Personal history (nurture) + Social situation (environment) = Attitude + Response

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