Organizational change and transformation

Change Management

In order to successfully implement change management must plan the whole change process. Change management, is a sensitive process and so help of change agents is taken by the management. A change agent, or agent of change, is someone who intentionally or indirectly causes or speeds up organizational change. Change agents sometimes determine the need for change or sometimes they act on the needs identified beforehand by the internal management. After understanding the need for change thay make a plan for proposed change while considering probable reactions for proposed change. They finally execute the plan for change.

Dynamics of Change

Different warning signs show the management that the company is heading for trouble. Business starts to under-perform, more often than not demonstrated by missing trading targets. Some times management acts quickly to address short-term problem with short-term measures. However, if targets are being missed over a period of time and the balance sheet/working capital shows signs of decline and worsening then management or board ponders over long-term solutions.

Change come in different forms and ways within the organization. Sometimes the change changes the cultures while at times it only adds certain elements. Change is brought about whenever technology is introduced in organizations. Change in technology requires changes in people's competencies as they have to become skilled at new habits and take on a whole new approach. HR department or personnel acting as change agents can collaborate with departments to explain and train employees as to what they have to do and how they can do it.

Separate companies get together to form larger ones by way of mergers & acquisitions resulting in changes of cultures or amalgamation of cultures in organizations. Another way of change is the change in the management or ownership in the organization. New directors are appointed to try to perk up the fortunes of under-performing businesses. Change in management is usually followed by a series of structural and cultural changes in the organization. Changes also come when a company lay off employees as well as when it seeks to increase its strength of employees. In both scenarios problems crop up. Inductions or expansion requires on part of change agents to get them adapted to the new environment and new business goals. Similarly in case of downsizing survivors undergo complex feelings of uncertainties and insecurities resulting in dips in productivity.

Resistance to Change

Mostly employees deny change as there is natural resistance not only accept but also adapt to change. It has been observed ipractically that few people like changes. "Change has undeniably been labeled as difficult. Dealing with change is ambiguous, even on a good day. The fact is, however, that the root cause to the difficulty is the same root cause to the ambiguity. The real issue is: People! They aren't like a nicely defined data set where we can hit a few keystrokes, stack them, run an analysis and, if it doesn't work out, delete that worksheet as if it never happened. You don't get to move them into Excel so you can manipulate them in a pivot table until they look the way you would like them to" (Larson and Carnell).

The nature of resistance by its members varies in its intensity in the sense that it could be passive, active or even aggressive. Some argue that it is the organizations systems that cause more resistance rather than the individuals. Poor organization's structure or performance appraisal or compensation system can also be considered potential sources of main problem. In fact it is the loss of status, pay, or comfort because of which individuals resist change.

Change agents attempts to create changes and face resistance. Critics also argue that sometimes change agents also become a source of resistance. They have fixed mindset and an agenda and so any behavior that is not in line with his perspective is considered resistance. Self-fulfilling prophecies and preconceived notions of change agents at times create the very resistance they are trying to overcome. So it is important for change agents to consider their own role in nurturing the very resistance they are trying to prevail over.

Resistance to change is required to be converted into readiness to change. A lot depends on the probability of success of change process. Sometimes it happens that too idealistic & unrealistic goals are set because of which employees lose the morale and their resistance increase and readiness decreases. Similarly if systems are in place and resources are also available then it is easy for change agents to convert resistance into readiness. "Creating readiness involves proactive attempts by a change agent to influence the beliefs, attitudes, intentions and behavior of change participants. This view accentuates the social aspects of change as organizational players look to one another for clues about the meaning of events and circumstances facing the organization (Armenalds et al., 1993) and leads nicely into a consideration of the final change dynamic, momentum" (Jansen, 2000).

Once the change process is started then it is necessary to keep the momentum. Sometimes it happens that problems crop up during the process of change even if the initial resistance is overcome. A change agent is supposed perform different roles in order to create, maintain, or build momentum to steer change effectively. A change leader must possess different qualities that can help the change process. Agility, leadership, good communications, understanding of human psychology and business acumen are some of the qualities that change agents must possess.

HR as Strategic Partner in Change

Strategic role of HR has been given a lot of importance in modern organizations following modern management concepts. Many changes taking place within organizational framework have enhanced the role of HR in the organization. Increasing role of information technology and fast changes taking place in the external business environment are considered important in bringing forth the strategic role of HR in change management. Previously, HR had mainly administrative function to perform but with information technology has over the years taken over the administrative function from HR. After the most administrative tasks were taken over by technology then HR function became confined to recruiting, staffing, and developing individuals using their knowledge about the organization as a business and as a strategic entity. "Even it cannot be harnessed without the fundamental role played by human and intellectual resources" (Thite).

Now HR has greater role to play in strategic decision making such as bringing about a change because of its association with human capital. Since, human capital makes and implements strategy, so understanding and developing the capabilities to make and implement strategy requires a greater participation in the strategy making task. "Corporate HR practitioners are expected to have a strong command of business practices, to understand financials, to be able to quantify the effects of their programs on the bottom line and to sell their programs to management" (Solomon 1994).

Another important aspect to consider here is that most of the time excellent strategies are formulated but such strategies fail because of failure in implementation. Change strategy implementation requires certain capabilities and sills. If such skills do not support the strategies then failure of implementation takes place. "In short, execution failures are often the result of poor human capital management. This opens the door for HR to add important value if it can deliver change strategies, plans and thinking that aid in the development and execution of business strategy" (Lawler III & Mohrman 2003).

Understanding of Cultures

Organizational culture is one of the most important factors in implementation of change strategies that managers formulate to attain competitive edge. Organizations and their strategies fail because of this intangible yet crucial factor. Organizational values and culture may hamper the implementation of strategies/techniques. Cultural factors such as, "values, beliefs, rituals, ceremonies, myths, stories, legends, sagas, language, metaphors, symbols. Heroes and heroines" (David, 1991) can make or break organizations in today's competitive environment. So, cultural evaluation becomes a feature of utmost importance. Managers must check whether they still adhere to age-old management practices or if they welcome the values that modern management supports.

Importance of Leadership

The leadership qualities can play an important part in an organization going through a change process. The tasks for the leadership here is to provide its employees overall direction in order to effectively guide them during the whole process of change. In the absence of a proper direction the change of culture may become counter productive but providing direction in any way does not mean that managers can stifle the creativity and drive of their employees rather effective leadership allows others to inculcate in themselves superior leadership qualities and understanding of the change management process so that they them self can figure out the directions and actions which are needed to be taken without actually stifling the drive to acquire new knowledge and experimentation. In the whole change process top management and change leader play their due role. Change leader is supposed to determine the source of conflicting emotions and sift them out during decision making process. The change leader should feel confident about the change if decision criteria are driven by impartial and objective considerations and his position is based on organizational, mission, vision and strategies. Then leader should try to convince all employees on objective and factual grounds while also taking care of their emotional issues. If leaders do not behave well and control their own emotions then employee morale gets affected. "Most executives do a good job of communicating a strong sense of urgency to effect change and move people out of their comfort zones. This often launches a flurry of activities in the right direction to start with. However, sustaining the quality and level of activities is a different ball game. For the abstraction that is called business, it requires more than organizational structure, incentives and job descriptions to have a multitude of people work in a concerted manner towards a common objective -- it requires a shared vision. It is one, in which everybody has a role to play, everybody clearly understands his or her role, and everyone knows 'what is in it for me?'" (Chakraborty)

The importance of good communication in change management is that it would foster participation from the right quarters of change agents. Absence of good communication could undermine the change effort for various reasons. Most importantly, it would create ambiguities and uncertainties in the minds of employees who would be in constant need of reassurance during the initial change effort which is the most formidable stage in change process. Also, ambiguities and uncertainties would create a perception of low level of commitment on the part of the leadership. This would not only affect the morale of the employees adversely but would sent out wrong signals to agents of status quo who would feel entrenched more deeply and could generate cross currents that would further lower the morale of all the employees.

Importance of Communication

Clear and honest communication is a prerequisite for bringing about change in organizations. In some organizations the level of mutual trust and employee morale at its lowest ebb due to various reasons and requires adept handling. So, the prerequisite for initiating and maintaining the change in organizations is, therefore, straight forward and honest communication. Communication is further needed to share information which is the single most source of empowerment in this age of information revolution. The change, unless duly empowered through correct information, would remain ineffective in bringing about the desired change. Here the example of Serco Solutions, a change management consultancy can be given when it acquired the it services company ITNET in December 2004. "HR was right at the centre of Serco's change process, says Morgan-Jones, change director at Serco Solutions, with senior managers using road shows to get the message to a total of 85% of staff in the first three days. "We wrote to people at home; we did a desk-drop of invitations on the morning of the announcement, and we sent targeted e-mails,' recalls Morgan-Jones. "There was absolutely no reason for people not to know what was going on.' The HR department carried out a staff survey a few weeks after the acquisition, to identify the "levers for change," and designed development for staff accordingly. This meant, for example, that managers could move from an environment based on strict hierarchies to one based on self-empowerment" ('Change management: 10 biggest agents of change', 2006).

HR department and its managers play their due role as change agents by communicating intended messages to all those concerned in the event of changes taking place in the organization. For example when restaurant chain Nando's planned to increase its number of restaurants the communication of business plans to prospective managers became important. In order to facilitate the change big events were arranged each year in which company's functional heads presented the plan directly to restaurant managers and assistant managers. Not just managers but other staff members were also given importance as a member of staff was also elected to meet quarterly with senior management. All these activities were facilitated by HR department that acted as change agent.

Management of Emotional Quotient

As embodied in the modern human resource management concepts, managing feelings of employees is an essential component of management as employees are no longer expected to check in their brains and hearts at the company gates. So, in management of change, sentiments and feelings become crucial as people wish to stick to the old, tired and tested strategy or culture not just because they have a sense of ownership or because there is great sense of security associated with it but also they develop a sentimental attachment to the earlier mission, vision, goals, strategy or culture.

So, effective feelings management is a natural outgrowth of effective change communication which could minimize dissonance. and, effective change management is one which would communicate change intention effectively that would, in turn, induce, change in behavior which would reinforce believe in change thus galvanizing faith in change in providing further impetus to the momentum of change. So, caring and affectionate change leaders are needed.

However, care and affection is not the same as *****-footing on principles. Managers need to be very clear and sure about the principles to which all committed organizational members must come up and the art of managing lies in selling these principles to all members so that they may see and accept them. The human element is taken care of during the process of selling the principles and not on compromising on them. So, there is always a danger that care and affection might be misinterpreted as waffling on principled stands required essentially for bringing about change. "Change agents must act as 'voices of conscience' when any mid-course corrections are contemplated. It is the responsibility of change agents to make sure such issues get a complete airing in order to avoid the project ending in failure. One effective change agent summed up the attitude needed: 'My primary goal is to ensure this project succeeds, no matter what. My secondary objective is to preserve my personal relationship with all senior management.' The best change agents are tactful and diplomatic. 'Political skills' are necessary, not so change agents can join in the game, but so they can better understand it"(Tan and Kaufmann).

A good example in the management of feelings was seen when four years ago global snack giant Nabisco became the owners of United Biscuits. The company appointed Les Bacon as change manager. The change in management resulted in a new centralized approach of management as opposed to autonomous functioning of a number of businesses and factories. Change manager worked to facilitate the whole process for which they also took the help of occupational psychology company Kaisen. The purpose was to gain the deep understanding of how changes could affect the people and how they can manage tasks as well as emotions.

Empowerment as Change Tool

Empowerment is the next step in implementing the change philosophy. Opening the financial information for employees and making them understanding organizational goals is not enough. Employees must be empowered to take action based on the basis of their understanding of different situations and scenarios within the organization. This empowerment will develop their problem solving skill and they will become a part of the big picture. Whether employees are working individually or they are part of the cross-functional teams, HR departments and organizations today give employees the freedom and responsibility of making independent decisions. In order to win the trust of employees an organization must show reliance and confidence in its employees and their decisions so in return they could facilitate key process of organizational change.

Appointment of Change Agents

The solutions recommended by management bring about changes of both short-term and long-term nature. Change agent is usually appointed in such scenarios to herald changes. Change agents help management in executing the change plan leaving them to focus on the operational aspects. Sometimes it happens that management underestimates the seriousness of the problem and they go about addressing the issues themselves as a result of which they are unable to concentrate on the business and the problem worsens. A detailed change plan is generally made that includes all the details of the whole process, training needs of personnel and requirement of resources etc. Change agents with only clear goals in mind go about implementing change plan while taking in confidence all the stakeholders.