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Successful Organizational Change.

Effective Management of People and Cultural Issues

Changing an organization to meet changing market conditions or strategic goals can be one of the most exhilarating aspects of doing business today, but it can also cause confusion, low morale, turnover and decreased productivity among employees.

Whether that change takes the form of a merger, acquisition, outsourcing, downsizing, streamlining or restructuring, an organization cannot successfully achieve its business and financial objectives until a critical mass of employees have completed their individual transitions.

One of the key messages from a recent Conference Board of Canada conference called Mergers and Acquisitions 2000: Perfecting the Game, was the importance of managing cultural and people issues during times of organizational change. A presentation by Paul Dowie, Chief Executive, Nova Scotia Operations, Atlantic Blue Cross Care and Eric Beaudan, Director, Organization Development, Bank of Montreal said it best: "Culture might not make or break the deal, but it will make or break the expectations of the deal."

All changing organizations struggle with people-related issues. Most attention is usually given to the organization in terms of structure, processes, tools, measurements, policies and procedures. But for the transition to be successful, people need to "buy in" and be committed. Their individual interests, values and competencies must be effectively aligned with the organization's vision, culture and capabilities.

Transition within an organization typically becomes misaligned from the combination of two variables:

* Different functional realities: Senior managers often have access to information soon and therefore have a "jump" on moving through the transition curve from the previous organizational state to a desired state. They also tend to be the drivers of the change and have more control than middle managers and other employees. Middle managers, although intellectually on board with senior management, need more time for their emotional transitions than the senior executives expect.

* Different personal responses to change: Individuals may be scattered across the three phases of the transition curve (see diagram) depending on their personal responses to change.

The result is a misalignment of emotions, understanding, effort and commitment that impacts negatively on the performance of the individuals and the organization as a whole.

Phases of the Transition

There are typically three distinct phases of transition that an organization and its employees will pass through, as shown in the following diagram.

All employees have three basic requirements to navigate change successfully:

Structure -- Strategies that shape temporary systems and new courses of action for moving effectively through the transition process such as policies, procedures and job descriptions

Information -- Data, facts, advice, wisdom, news, tips and other knowledge they can apply to navigate the present and future

Support -- Understanding, bolstering, championing and a nurturing environment to create safe passage through times of transition.

The straight line in the graph represents the acceptable level of productivity before the change was implemented. The danger for most organizations is that they get stuck in the middle phase, turning energy inwards, not outwards, creating a sense of confusion among employees and a desire to go back to the way things were.

This is where effective leadership can make all the difference, because anything that can be done to minimize the impact of transition will make a positive impact on the bottom line. However, if managers are not trained to lead others through this transition phase effectively, they can remain there for a long time.

Signs of unmanaged transition will manifest themselves in anxiety, stress, resentment, guilt and self-absorption. All of these are direct costs to the bottom line and take up valuable management time to resolve and move forward through the transition process.

It's the Top Performers Who Leave

Employees generally fall into one of three common categories during times of organizational change and transition -- Achievers, Adopters and Abstainers.

Twenty percent are Achievers who quickly embrace the change. The middle group -- the Adopters -- usually account for about 60 percent of the workforce. They take the middle road -- they will embrace the change as long as it is well handled. The remaining 20 percent are Abstainers who do not want anything to do with the change and keep their distance from the process.

The Adopters are very susceptible to influence by the other groups, so it is vital that they are linked as quickly as possible to the Achievers to create a critical mass supporting the new change. If a conscious effort is made to engage the Abstainers in the change process, they are more likely to move forward with the new company, and won't be held back. Abstainers typically make the most noise, so this is where managers often spend most of their time. However, in doing so, they ignore the needs of the Achievers who can become more impatient and feel ignored. They are often the ones most likely to find another job elsewhere. As a result, the organization loses its top performers, the people who would normally be relied upon to make the organizational change successful.

Organizations are budget conscious, and this can lead to a reluctance to invest in time to train managers and employees how to manage change. If this investment is not made, the best boardroom plans may have to undergo a radical re-thinking. Employees will spend time worrying about the career implications of the change and trying to come to grips with the painful reality that their working environment has been radically altered. Middle managers tend to be those most affected and need professional support to help them manage the process. They have to deal with their own change and career issues at a time when employees need additional guidance and reassurance from them.

Cultural Change

Apart from career concerns, the other area of difficulty during organizational change is culture. Many cultural issues are actually turf wars or politics in which people are fighting for power. Leaders have the greatest influence in building the new culture and must model the behaviours they want to see in the organization. It's best to avoid comparing differences or looking back to the way things were. Look ahead to the future -- culture audits can be time consuming. The new culture must be built as quickly as possible.

Employees need to be told that the criteria for business decisions will be the success of the new organization, not what has worked well in the past. The changes are creating new opportunities, and with them a need for new skills. Each employee must clearly understand the business rationale for the change as well as their role in making the new organization successful. If not, they will feel they are working in the dark. It is not uncommon for employees to say, "don't know why we did this, who I'm working for or what I'm supposed to do." Employees need a roadmap and a sense of what is at the end of the journey. Without it, they may be at work physically, but mentally they are miles away.

If employees have to be displaced, outplacement and appropriate support should be provided not only for them, but also for people who stay in the organization. Often the stress level for people who remain is greater than for their colleagues who have left. They often experience "survivor" guilt while grieving for lost work groups and former jobs. They have to do more with less in a changing workplace where policies, procedures, systems and relationships are still confusing and unclear.

When changing or amalgamating culture, speed is of the essence -- the longer it takes the longer the dip in productivity and morale and the harder it is to put things right again.

Leadership Strategies

Decisiveness at the top of the organization is crucial to keep the pace of change moving. If the pace feels too quick, then it is probably right. Slowing the pace to accommodate overwhelmed employees is not the right strategy. Make sure people are engaged in important work, clarify top priorities, put your high achievers in stretch assignments, give them permission to make mistakes and celebrate small successes.

Visibility is also important. Once the key messages have been decided, it is important to "walk the talk". Managers ought to spend 80 percent of their time communicating with employees. This means more face-to-face meetings and, if that is not possible, send personalized e-mails and voicemails. The most common complaint from employees is that they feel their manager doesn't have time for questions or discussions. Create a culture that encourages open and honest communication at all levels of the organization.

Following are some other leadership strategies that organizations can use during the three main phases of transition to help their employees navigate through them.

Endings phase

* Encourage the use of symbolic ceremony to obtain closure and move on

* Explain the rationale for the new structure

* Set new guidelines regarding work role and performance standards

* Provide short-term goals and give specific directions in small increments

* Hold frequent meetings, including one-on-one and team meetings, and encourage two-way communications

Exploration phase

* Provide interim policies and procedures with input from the team

* Provide interim work descriptions and solicit input and suggestions from the team

* Explain the impact of change on the individual and demonstrate how current work fits into the overall team/company vision

* Hold frequent meetings to generate new ideas and create enthusiasm

* Develop a critical mass in support of the change and involve High Performers to act as role models

New Beginnings phase

* Provide as much information as possible about the future and involve employees in the implementation process

* Provide assistance regarding information retrieval and the new employee network

* Engage in continuous and open communication and provide regularly scheduled feedback

* Encourage risk-taking and avoid reprisals for resulting errors

* Implement empowerment strategies

A study by the Conference Board of Canada found that 66 percent of organizations that completed restructuring initiatives showed no immediate increase in productivity, more than 50 percent realized no short-term profit improvement and only 30 percent actually lowered costs. These are staggering statistics that would be enough to discourage any organization contemplating major strategic change. These results are common when organizations focus their change efforts and priorities on processes, finances and structures. There is no foolproof way of making all aspects of organizational change run flawlessly. But by valuing, respecting and communicating with people, by devoting as much effort and attention to the needs of employees, any organization is well on the way to managing change effectively.

Denis St-Amour is President, Drake Beam Morin-Canada Inc.
COPYRIGHT 2001 Canadian Institute of Management
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001 Gale, Cengage Learning. All rights reserved.

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Title Annotation:guidelines on transition and corporate culture
Author:St-Amour, Denis
Publication:Canadian Manager
Geographic Code:1CANA
Date:Jun 22, 2001
Previous Article:Be Realistic: There is No Limit to What You Can Do.
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