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Lesson#24
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Leading and managing change-1
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Leading and managing change
Figure 34:
Activity Contributing to Effective Change Management
Creating a Vision:
The second activity in leading and managing change involves
creating a vision of what members want the
organization to look like or become. It is one of the most
popular yet least understood practices in
management. Generally, a vision describe the core values and
purpose that guide the organization as well as
an envisioned future toward which change is directed. It
provides a valued direction for designing,
implementing and assessing organization changes. The vision also
can energize commitment to change by
providing members with a common goal and a compelling rationale
for why change is necessary and worth
the effort. However, if the vision is seen impossible or
promotes changes that the organization cannot
implement, it actually can depress member motivation. For
example, George Bush’s unfulfilled “thousand
points of light” vision was emotionally appealing but it was too
vague and contained little inherent benefit.
In contrast, John Kennedy’s vision of “putting a man on the moon
and returning him safely to the earth”
was just beyond engineering and technical feasibility. In the
context of the 1960s, it was bold, alluring and
vivid; it provided not only a purpose but a valued direction as
well. Recent research suggests that
corporation with carefully crafted vision can significantly out
perform the stock market over long periods
of time.
Creating a vision is considered a key element in most leadership
frameworks. Organization or subunit
leaders are responsible for effectiveness, and they must take an
active role in describing a desired future and
energizing commitment to it. In many cases, leaders encourage
participation in developing the vision to
gain wider input and support. For example, they involve
subordinates and others who have a stake in the
changes. The popular media frequently offer accounts of
executives who have helped to mobilize and
direct organizational change, including Nobuhiko Kawamoto of
Honda and Jack Welch at General Electric.
Describing a desired future is no less important for people
leading change in small departments and work
groups than for senior executives. At lower organizational
levels, there are ample opportunities to involve
employees directly in the visioning process.
Developing a vision is heavily driven by people’s values and
preference for what the organization should
look like and how it should function. The envisioned future
represents people’s ideals, fantasies, or dreams
of what they would like the organization to look like or become.
Unfortunately, dreaming about the future
is discouraged in most organization, because it requires
creative and intuitive thought processes that tend to
conflict with the rational, analytical methods prevalent there.
Consequently, leaders may need to create
special conditions in which to describe a desired future such as
off site workshop or exercise that stimulate
creative thinking.
Research by Collins and Porras suggests that compelling visions
are composed of two parts: (1) a relatively
stable core ideology that describes the organization’s core
values and purpose, and (2) an envisioned future
with bold goals and a vivid description of the desired future
state that reflects the specific change under
consideration.
Describing the Core Ideology:
The fundamental basis of a vision for change is the
organization’s core ideology. It describes the
organization’s core values and purpose and is relatively stable
over time. Core values typically include three
to five basic principles or beliefs that have stood the test of
time and best represent what the organization
stands for. Although the vision ultimately describes a desired
future, it must acknowledge the organization’s
historical roots, the intrinsically meaningful core values and
principles that have guided and will guide the
organization over time. Core values are not “espoused values”;
they are the “values in use” that actually
inform members what is important in the organization.The
retailer Nordstrom, for example, has clear
values around the importance of customer service; toymaker Lego
has distinct values around the
importance of families; and the Disney companies have explicit
values around wholesomeness and
imagination. These values define the true nature of these firms
and cannot be separated from them. Thus,
core values are not determined or designed; they are discovered
and described through a process of inquiry.
Members can spend considerable time and energy discovering their
organization’s core values through long
discussion about organizational history, key events, founder’s
beliefs, and the work people actually do, and
the “glue” that holds the organization together. In many cases,
organizations want the core values to be
something they are not. For example, many U.S firms want
“teamwork” to be a core value despite strong
cultural norms and organizational practices that reward
individuality.
The organization’s core purpose is its reason for being the
idealistic motivation that brings people to work
each day. A core purpose is not a strategy. Purpose describes
why the organization exists; strategy describes
how an objective will be achieved. Organizations often create a
slogan or metaphor that captures the real
reason they are in business. For example, part of Disneyland’s
return to prominence in the late 1980s and
1990s was guided by the essential purpose of “creating a place
where people can feel like kids again”.
Similarly, Apple’s original vision of “changing the way people
do their work” describe well the benefits the
organization was providing to its customers and society at
large. Many Apple employees previously had
experienced the drudgery of a boring job, an uninspired boss, or
an alienating workshop, and it was alluring
to be part of a company that was changing work into something
more challenging, creative or satisfying.
The real power of an organization’s core ideology is its
stability over time and the way it can help the
organization change itself. Core values and purpose provide
guidelines for the strategic choices that will
work and can be implemented versus those that will not work
because they contradict the real nature of the
organizations identity. An envisioned future can be compelling
and emotionally powerful to members only
if it aligns with and supports the organization’s core values
and purpose.
Constructing the Envisioned Future:
The core ideology provides the context for the envisioned
future. Unlike core values and purpose, which
are stable aspect of the organization and must be discovered,
the envisioned future is specific to the change
project at hand and must be created. The envisioned future
varies in complexity and scope depending on
the changes being considered. A relatively simple upgrading of a
work group’s word processing software
requires a less complex envisioned future than the
transformation of a government bureaucracy.
The envisioned future typically includes the following elements
that can be communicated to organization
members:
1.
Bold and valued
outcomes
. Descriptions of envisioned
futures often include specific performance
and human outcomes that the organization or unit would like to
achieve. These valued outcomes can
serve as goals for the change process and standards for
assessing program. For example, BHAGs (Big,
Hairy, and Audacious Goals) are clear, tangible, energizing
targets that serve as rallying points for
organization action. They can challenge members to meet clear
target levels of sales growth or
customer satisfaction, to overcome key competitors, to achieve
role-model status in the industry, or to
transform the organization in some meaningful way. For example,
in 1990 Wal-Mart Stores made a
statement of intent “to become a $ 125 billion company by the
year 2000” (Net sales in 1999 exceeded
$ 137.6 billion). Following the downsizing of the U.S. military
budget, Rockwell proposed the following
bold outcomes for its change efforts: “Transformation this
company from a defense contractor into
the best diversified high- technology company in the world.”
2.
Desired future
state.
This element of the envisioned
future specified, in vivid detail, what the
organization should look like to achieve bold and valued
outcomes. It is a passionate and engaging
statement intended to draw organization members into the future.
The organizational features describe
in the statement help define a desired future state toward which
change activities should move. This
aspect of the visioning process is exciting and compelling. It
seeks to create a word picture that is
emotionally powerful to members and motivates them to change.
Developing Political Support:
From a political perspective, organizations can be seen as
loosely structured coalitions of individuals and
groups having different preference and interests. For example,
shop-floor workers may want secure, highpaying
jobs, and top executives may be interested in diversifying the
organization into new business. The
marketing department might be interested in developing new
products and markets, and the production
department may want to manufacture standard products in the most
efficient way. These different groups
or coalitions compete with one another for scarce resources and
influence. They act to preserve or enhance
their self-interest while managing to arrive at a sufficient
balance of power to sustain commitment to the
organization and achieve overall effectiveness.
Given this political view, attempts to change the organization
may threaten the balance of power among
groups, thus resulting in political conflicts and struggles.
Individuals and groups will be concerned with how the changes
affect their own power and influence, and
they will act accordingly. Some groups will become less
powerful; others will gain influence. Those whose
power is threatened by the change will act defensively and seek
to preserve the status quo. For example,
they may try to act present compelling evidence that change is
unnecessary or that only minor modification
is needed. On the other hand, those participants who will gain
power from the changes will push heavily
for them, perhaps bringing in seemingly impartial consultants to
legitimize the need for change.
Consequently, significant organizational changes are frequently
accompanied by conflicting interest,
distorted information, and political turmoil.
Methods for managing the political dynamics of organizational
change are relatively recent additions to
OD. Traditional, OD has neglected political issues mainly
because its humanistic roots promoted
collaboration and power sharing among individuals and groups.
Today, change agents are paying increased
attention to power and political activity, particular as they
engage in strategic change involving most parts
and features of organizations. Some practitioners are concerned,
however, about whether power and OD
are compatible. A growing number of advocates suggest that OD
practitioners can use power in positive
ways. They can build their own power base to gain access to
other power holders within the organization.
Without such access, those who influence or make decisions may
not have the advantage of an OD
perspective. OD practitioners can use power strategies that are
open and aboveboard to get those in power
to consider OD applications. They can facilitate processes for
examining the uses of power in organizations
and help power holders devise more creative and positive
strategies than political bargaining, deceit, and the
like. They can help power holders confront the need for change
and can help ensure that the interests and
concerns of those with less power are considered. Although OD
professionals can use power
constructively in organizations, they probably will continue to
be ambivalent and tense about whether such
uses promote OD values and ethics or whether they represent the
destructive, negative side of power. That
tension seems healthy, and one can hope that it will guide the
wise use of power in OD.
Assessing Change Agent Power:
The first task is to evaluate the change agent’s own sources of
power. This agent may be the leader of the
organization or department undergoing change, or he or she may
be the OD consultant if professional help
is being used. By assessing their own power base, change agents
can determine how to use it to influence
others to support changes. They also can identify areas in which
they need to enhance their sources of
power.
Greiner and Schein, in the first OD book written entirely from a
power perspective, identified three key
sources of personal power in organizations (in addition to one’s
formal position): knowledge, personality,
and others’ support. Knowledge bases of power include having
expertise that is valued by others and
controlling important information. OD professional typically
gain power through their expertise in
organizational change. Personality sources of power can derive
from change agents’ charisma, reputation,
and professional credibility can wield considerable power by
providing access to information and resource
networks. Others also may use their power on behalf of the
change agent. For example, leaders in
organizational units undergoing change can call on their
informal networks for resources and support, and
encourage subordinates to exercise power in support of the
change.
Identifying Key Stakeholders:
Having assessed their own power bases, change agents can
identify powerful individuals and groups with an
interest in the changes, such as staff groups, unions,
departmental managers, and top-level executives.
These key stakeholders can thwart or support change, and it is
important to gain broad-based support to
minimize the risk that a single interest group will block the
changes. Identifying key stakeholders can start
with the simple question “Who stands to gain or to lose from the
changes?” Once stakeholders are
identified, creating a map of their influence may be useful. The
map could show relationships among the
stakeholders in terms of who influences whom and what the stakes
are for each party. This would provide
change agents with information about which people and groups
need to be influenced to accept and
support the changes.
Managing the Transition:
Implementing organizational change involves moving from the
existing organizational state to the desired
future state. Such movement does not occur immediately but, as
shown in figure 35, instead requires a
transition state during which the organization learns how to
implement the conditions needed to reach the
desired future. Beckhard and Harris pointed out that the
transition state may be quite different from the
present state of the organization and consequently may require
special management structures and
activities. They identified three major activities and
structures to facilitate organizational transition: activity
planning, commitment planning and change-management structures.
Figure 35: Organization Change as a Transition State
Activity Planning:
This involves the making a road map for change citing specific
activities and events that must occur if the
transition is to be successful. Activity planning should clearly
identify, temporally orient, and discrete
change tasks and should link these tasks to the organization’s
change goals and priorities. Activity planning
also should gain top-management approval, be cost effective, and
remain adaptable as feedback is received
during the change process.
An important feature of activity planning is that vision and
desired future states can be quite general when
compared with the realities of implementing change. As a result
it may be necessary to supplement those
with midpoint goals as part of the activity plan. Such goals
represent desirable organizational conditions
between the current state and the desired future state. For
example, if the organization is implementing
continuous improvement process, an important midpoint goal can
be the establishment of a certain
number of improvement teams focused on understanding and
controlling key words process. Midpoint
goals are clearer and more detailed than desired future states,
and thus they provide more concrete and
manageable steps and benchmarks for change. Activity plans can
use in midpoint goals to provide members
with the direction and security they need to work towards the
desired future.
Commitment Planning:
This activity involves identifying key people and groups whose
commitment is needed for change to occur
and formulating a strategy for gaining their support. Although
commitment planning is generally a part of
developing political support, discussed above, specific plans
for identifying key stakeholders and obtaining
their commitment to change need to be made early in the change
process.
Change-Management Structures:
Because organizational transitions tend to be ambiguous and to
need direction, special structures for
managing the change process need to be created. These management
structures should include people who
have the power to mobilize resources to promote change, the
respect of the existing skills to guide the
change process. Alternative management structures include the
following:
• The chief executive or
head person manages the change effort.
• A project manager
temporarily is assigned to coordinate the transition.
• The formal organization
manages the change effort in addition to supervising normal operations.
• Representatives of the
major constituencies involved in the change jointly manage the project.
• Natural leaders who have
the confidence and trust of large numbers of affected employees are
selected to manage the transition.
• A cross section of
people representing different organizational functions and levels manages the
change.
• A “kitchen cabinet”
representing people whom the chief executive consults with and confides in
manages the change effort.
Sustaining Momentum:
Once organizational changes are under way, explicit attention
must be directed to sustaining energy and
commitment for implementing them. The initial excitement and
activity of changing often dissipate in the
face of practical problems of trying to learn new ways of
operating. A strong tendency exists among
organization members to return to what is learned and well known
unless they receive sustained support
and reinforcement for carrying the changes through to
completion. The following five activities can help to
sustain momentum for carrying change through to completion:
providing resources for change, building a
support system for change agents, developing new competencies
and skills, reinforcing new behaviors, and
staying the course.
Providing resources for change:
Implementing organization change generally requires additional
financial and human resources, particularly
if the organization continues day-to-day operations while trying
to change it. These extra resources are
needed for such change activities as training, consultation,
data collection and feedback, and special
meetings. Extra resources also are helpful to provide a buffer
as performance drops during the transition
period. Organizations can underestimate seriously the need for
special resources devoted to the change
process. Significant organizational change invariably requires
considerable management time and energy, as
well as the help of consultants. A separate “change budget” that
exists along with capital and operating
budgets can earmark the resources needed for training members in
how to behave differently and for
assessing progress and making necessary modifications in the
change program. Unless these extra resources
are planned for and provided, meaningful change is less likely
to occur.
Building a support system for change agents:
Organization change can be difficult and filled with tension,
not only for participants but for change agents
as well. They often must give members emotional support, but
they may receive little support themselves.
They often must maintain “psychological distance” from others to
gain the perspective needed to lead the
change process. This separation can produce considerable tension
and isolation, and change agents may
need to create their own support system to help them cope with
such problems. A support system typically
consist of a network of people with whom the change agent has
close personal relationships--- people who
can give emotional support, serve as a sounding boards for ideas
and problems, and challenge untested
assumptions. For example, OD professionals often use trusted
colleagues as “shadow consultants” to help
them think through difficult issues with clients and to offer
conceptual and emotional support. Similarly, a
growing number of companies, such as Intel, Procter & Gamble,
BHP-Copper, TRW, and Texas
instruments, are forming internal networks of change agents to
provide mutual learning and support.
Developing new competencies and skills:
Organizational changes frequently demand new knowledge, skills,
and behaviors from organization
members. In many cases, the changes cannot be implemented unless
members gain new competencies. For
example, employee-involvement programs often require managers to
learn new leadership styles and new
approaches to problem solving. Change agents must ensure that
such learning occurs. They need to provide
multiple learning opportunities, such as traditional training
programs, on-the-job counseling and coaching,
and experiential simulations, covering both technical and social
skills. Because it is easy to overlook the
social component, change agents may need to devote special time
and resources to helping members gain
the social skills needed to implement changes. Ford’s new CEO,
Jacques Nasser, is supporting the
organization’s efforts to increase the speed of decision making
through a concerted emphasis on
“teaching”. Through small-group discussions of strategy,
providing all employees with a computer,
assignments to develop new ideas, and 360-degree feedback. Ford
managers are learning new skills and a
new mindset to support the organization’s need for faster
decision making.
Reinforcing new behaviors:
In organizations, people generally do those things that bring
them rewards. Consequently, one of the most
effective ways to sustain momentum for change is to reinforce
the kinds of behaviors needed to implement
the changes. This can be accomplished by linking formal rewards
directly to the desired behaviors. For
example, Integra Financial encouraged more teamwork by designing
rewards and recognition programs in
which the best team players got both financial rewards and
management attention, and a variety of
behaviors aimed at promoting self-interest were directly
discouraged. In addition, desired behaviors can be
reinforced more frequently through informal recognition,
encouragement, and praise. Perhaps equally
important are the intrinsic rewards that people can experience
through early success in the change effort.
Achieving identifiable early successes can make participants
feel good about themselves and their
behaviors, and thus reinforce the drive to change.
Staying the course:
Change requires time, and many of the expected financial and
organizational benefits from change lag
behind its implementation. If the organization changes again too
quickly or abandons the change before it
is fully implemented, the desired results may never materialize.
There are two primary reasons that
managers do not keep a steady focus on change implementation.
First, many managers fail to anticipate the
decline in performance, productivity, or satisfaction as change
is implemented. Organization members need
time to practice, develop, and learn new behaviors; they do not
abandon old ways of doing things and
adopt a new set of behaviors overnight. Moreover, change
activities, such as training, extra meetings, and
consulting assistance, are extra expenses added on to current
operating expenditures. There should be a
little surprise, therefore, that effectiveness declines before
its get better. However, perfectively good change
projects often are abandoned when questions are raised about
short term performance decline. Patience
and trust in the diagnosis and intervention design work are
necessary.
Second, many managers don’t keep focused on a change because
they want to implement the next big idea
that comes along. When organizations change before they have to
in response to the latest management
fad, a “flavor-of-the-month” cynicism can develop. As a result,
organization members provide only token
support to change under the (accurate) notion that the current
change won’t last. Successful organizational
change requires persistent leadership that doesn’t waiver
unnecessarily.
OD in Practice: Values drive Culture and Operations at Levi
Strauss
Levi Strass and Company, one of the world’s largest makers of
blue jeans and other apparel, has been
engaged in a culture change effort that began in 1985. Following
a meeting with a small number of minority
and women managers who believed there were invisible barriers to
advancement, the CEO, Robert D.
Haas, the great-great-grandnephew of founder Levi Strauss
organized an off-site retreat that paired white
senior managers with minority and women managers. The
two-and-one-half days of discussions produced
painful realizations about how the firm treated its people. What
the small group had identified was not so
much a diversity problem as a leadership and culture problem.
Today, Levi Strauss is focused on managing in a way that
balances concerns with a set of values that honor
diversity, empowerment, and openness. The company has “struggled
mightily” to live up to a vision of how
to run a modern corporation – a vision set forth by Haas who has
demonstrated unswerving commitment
to it for more than ten years. As part of a mission of
“responsible commercial success,” the following
Aspiration Statement hangs on office and factory walls
throughout the organization and guides all major
decisions.
Aspiration Statement
We all want a company that our people are proud of and committed
to where all employees have an
opportunity to contribute, learn, grow, and advance based on
merit, not politics, or background. We want
our people to feel respected, treated fairly, listened to, and
involved. Above all, we want satisfaction from
accomplishments and friendships, balanced personal and
professional lives, and to have fun in our
endeavors.
When we describe the kind of Levi Strauss and Company we want in
the future what we are talking about
is building on the foundation we have inherited: affirming the
best of our Company’s traditions, closing
gaps that may exist between principles and practices, and
updating some of our values to reflect
contemporary circumstances.
What type of Leadership is necessary to make our aspirations a
reality?
New Behaviors: Leadership that exemplifies directness, openness
to influence, commitment to the success
of others, and willingness to acknowledge our own contributions
to problems, personal accountability,
teamwork, and trust. Not only must we model these behaviors, but
we must coach others to adopt them.
Diversity: Leadership that values a diverse workforce (age,
ethnic group, etc.) at all levels of the
organization, diversity in experience, and a diversity in
perspectives. We have committed to taking full
advantage of the rich backgrounds and abilities of all our
people and to promote a greater diversity in
positions of influence. Differing points of view will be sought;
diversity will be valued and honestly
rewarded, not suppressed.
Recognition: Leadership that provides greater recognition – both
financial and psychic – for individuals and
teams that contribute to our success. Recognition must be given
to all who contribute: those who create
band innovate and those who continually support day-to-day
business requirements.
Ethical management practices: Leadership that epitomizes the
stated standards of ethical behavior: We
must provide clarity about our expectations and must enforce
these standards throughout the corporation.
Communications: Leadership that is clear about company, unit,
and individual goals and performance.
People must know what is expected of them and receive timely,
honest feedback on their performance and
career aspirations.
Empowerment: Leadership that increases the authority and
responsibility of those closest to our products
and customers. By actively pushing the responsibility, trust,
and recognition into the organization, we can
harness and release the capabilities of all our people.
Haas believes that successful corporations are more than
strategies and structures. “This is where values
come in. In a more volatile and dynamic business environment,
the controls have to be conceptual…
Values provide a common language for aligning a company’s
leadership and its people” to the strategy. He
set out to make each of his workers, from the factory floor on
up, feel as if they are the integral part of the
making and selling of blue jeans. All views on all issues – no
matter how controversial – are encouraged,
heard, and respected. The chairman does not tolerate harassment
of any kind. Nor will he do business with
suppliers or customers who violate the company’ (Levi’s) strict
standards regarding work environment and
ethics. For example, Levi’s board voted unanimously to pull its
business out of China in protest of human
rights violations even though it cost about $40 million of
revenues.
“We are not doing this because it makes us feel good – although
it does. We are not doing this because it is
politically correct. We are doing this because we believe in the
interconnection between liberating the
talents of our people and business success.” However, the simple
truth is, living up to a value system as
comprehensive as Levi’s is difficult. It takes hours and hours
of work by both managers and organization
members.
To implement this vision, Haas began at the top. The first
responsibility for me and for my team was to
examine critically our own behaviors and management styles in
relation to the behaviors and values that we
profess and to work to become more consistent with the values
that we are articulating…You can’t be one
thing and say another. People have unerring direction systems
for fakes, and they won’t put up with them.
They won’t put values into practice if you’re not.” The most
difficult changes were in behaviors that had
made managers successful in the past. Activities that were
productive under the old culture were
counterproductive in the flatter, more responsive, and empowered
organization that top management was
trying to implement.
To push his vision into the organization, Haas commissioned a
set of training courses, such as leadership
week, making ethical decisions, and managing diversity.
Specifically designed not to be “skill-building”
courses, the sessions were more likely highly experiential
seminars. During the sessions, managers and
employees grappled with their own prejudices, attempted to make
difficult decisions using the aspirations
statement as a guide, and built a support network that helped in
applying the ideas in the workplace. To
reinforce the importance of the training, senior management
attended the courses, came back to teach in
them, and in some cases, went through the courses again as
participants to gain additional insights and
ideas.
In addition, aspirations management was given some teeth by
making it an important part of the
performance management system. It includes a 360-degree-like
feedback process; each manager develops
an “aspirational objective”; and one-third of an employee’s
evaluation is based on “aspirational” behavioral.
The aspirations statement has also affected the way work is
designed. A new team-based organization and
incentive pay system means that a worker’s appraisals and
compensation depend on other workers.
Although more aligned with the values of the organization, the
work design produces difficult tests for
management. For example, when workers think that someone is
faking sick days or lollygagging on a
sewing machine, tempers flare. Employee ABC says that if someone
calls attention to a worker’s laziness,
the worker will just “flip him off.” Supervisor D says that “it
gets tough out there.” She finds herself
intervening to prevent “big fights.” Says plant manager EF “Peer
pressure can be vicious and brutal.”
Empowerment and teamwork can be alien, uncomfortable concepts
for those in the manufacturing plant
who have spent their working lives taking orders.
After ten years of work, Haas is a long way from realizing his
vision. “We are only a few steps along in our
journey,” he agrees. “We are far from perfect. We are far from
where we want to be. But the goal is out
there, and it’s worth striving for.”
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