Organisational development and managing change

Wednesday, 1 December 2010 00:01 -     - {{hitsCtrl.values.hits}}

Change is a word that is being used vastly around the world in this knowledge era.  Especially businesses have not many choices but two, either to survive or to thrive in business as the environment is turbulent and moving faster than ever.

Thus organisational development and change is indispensable. Managers of organisations including the HR managers who manage people should take the challenge of developing the businesses if you want to come out unscathed. Why is that we speak of change with such determination and enthusiasm but resist it at implementation time?

Development in organisations

Organisation development is a process to improve the effectiveness of an organisation. Effectiveness is mainly about the accuracy and quality that goes beyond ability. It is also about optimal use of resources (inputs) to gain maximum outputs with added values. This is opposed to efficiency which concentrates on the speed of delivery. Enhancing the effectiveness in every system and subsystems is development.

If companies do not take a step to develop the business and change, that organisation will find it hard to play effectively in the competition. And they will rather experience what would a boiling frog experience. Having said that I would like to give a wake-up call to the companies who do not run market surveys or estimate their surrounding/competitors. They might fail or perish in the business world, like the dinosaurs, giants of the earth, millions of years ago disappeared whereas the cockroaches who are older to them survive today. It’s all about adaptability. Accepting change.    

The management should pay significant attention towards managing change when they introduce an organisational development process to a company. Because development can be done in different areas and changes will appear in all those areas. For example, when an organisation changes its overall strategy for success, adds or removes a major section or practice, and/or wants to change the very nature by which it operates.

Forms of change

  • Organisations sometimes change their identity and thus, change the relationship to the environment. For instance, when companies decide to merge, build alliances, partnerships, acquire other businesses, etc., the very same desire for growth and critical mass can at times, run the business to the ground and then we speak of divesture.  
  • Organisations change the way they operate, the ways people and units relate to each other through the changes done in the culture and structure.
  • Organisations can also change the nature of their control structures.

In 1999, Bill Gates and Steve Balmer learned a bitter lesson. Three of their top performers and team leaders resigned from Microsoft inc. to join other companies such as Tellme Networks and Reason to leave? Well, all decisions had to be funneled through Steve Balmer and Bill Gates. Hence, decisions that can be taken by HODs within 20 to 30 minutes, took days and this frustrated the senior managers. With Peter Neupert and David Richer resigning, Bill Gates and Steve Balmer started to CHANGE the way things are done at Microsoft. They tore up their Vision (version 01) and replaced it with Vision (Version 02) where, MICROSOFT will not be driven by Technocrats but that it will be driven by Customers. Steve Balmer started shaking up the culture whilst Bill Gates started plotting strategy. Both took themselves out of the operational decision making process and empowered Divisional Heads to make decisions.

Change is also good when things are going well. For instance, Jack Welch stated that we need to “change before we are compelled to”

Few common limitations of organisational development and change

  • Organisational Development is a long way process and requires more time.
  • It consist of substantial expenses
  • Possible failures
  • Lack of creativity
  • Fear of the unknown
  • Possible psychological and emotional harms
  • Employee resistance
  • High level of risk

So how do business enterprises do this? Businesses are open systems; as in, they receive and release resources from and to their environments. There is a high risk factor in implementing the change as they have to deal with several stakeholders who get affect from the changes they do in their organisations. How can you overcome this? There are occasions that people have seen the greatest risk as the motivator and have succeeded in business.

Responsibility for managing change

The employee does not have a responsibility to manage change — the employee's responsibility is no other than to do their best, which is different for every person and depends on a wide variety of factors (health, maturity, stability, experience, personality, motivation, etc). Responsibility for managing change in a way that employees can cope is completely with the management and executives of the organisation.

YET… Change must involve the people

Change must not be imposed upon the people without their consent. If people do not see the need to change, they will not change unless compelled. Change such as new structures, policies, targets, acquisitions, disposals, re-locations, etc., all create new systems and environments, which need to be explained to people as early as possible, so that people's involvement in validating and refining the changes themselves can be obtained.

First we must create awareness and educate of the need to change. What are the compelling reasons to move away from the familiar and comfortable zones and move to something different and perhaps uncomfortable?

The management should take the lead and drive the force of change by being upfront with the people. Top management can help them to be clam and focused. Maintaining open lines of communication is important.

Further unrealistic visions and goals should not be communicated to the employees. Building and maintaining trust is highly important in implementing changes within organisations.

People and teams need to be empowered to find their own solutions and responses, with facilitation and support from managers

Few benefits of organisational development and change

  • Break the monotony of the organisational processes
  • Create greater motivation
  • Increases productivity
  • A better quality of work
  • Creates high job satisfaction
  • Team work is improved and encouraged
  • Find better solution for conflicts
  • Commitment to objectives
  • Absenteeism and turnover reduced

Management's role in the organisational change

The top management has a responsibility to facilitate and enable the change across the company. Increasingly the manager's role is to interpret, communicate and enable — not to instruct and impose, which nobody really responds happily.

In Sri Lanka, it is common that most of the top managers design projects/concepts and pass it on to the supervisors, line mangers and others who are down the line to implement. We hardly see any involvement of these employees in decision making and planning stages. That is why most of the employees do not have much commitment to the work they do or towards the organisations they work. For them, it is only a place where they receive their salary at the end of the month. But if the management can change their traditional way of doing things and let the employees get the ownership and develop and design things for the company while implementing those with a clear understanding, Sri Lankan businesses will grow faster than is happening today.

It is the job of management to help support workers through the process of these changes, which are at times very difficult. This process has three stages “Unfreezing, changing and refreezing”. The end result is that management must help employees accept change and help them become well adjusted, internalise things and be effective once these changes have been implemented. In other words the management should play the role of a change agent who drives the forces of change against the restraining forces. The HR department of every organisation traditionally plays the role of a change agent by trying to create a change in the performance, developing leadership skills, increasing productivity, managing cost and wastage etc.

The Shock Wave for Change

Changing business trends

It is interesting to note the wave of change that has swept through global markets as I give below —

1950s - Sale of Baby food and nappies

1960s - Schools and education

1970s - Car sales

1980s - Real estate

1990s - Fast food chains and mega supermarkets

2000s - Age of ICT, Digital and broad band

The state of change in 2010

A new wave of entrepreneurs + advances in technology   = changing business environment.

Modern day consumers want speed, variety, quality, customisation and choice.

Financial advances through access to global networks

(The writer is the Managing Director and CEO, McQuire Rens Group of Companies. He has held regional responsibilities of two multinational companies of which one was a Fortune 500 company. He carries out consultancy assignments and management training in Dubai, India, Maldives, Singapore, Malaysia and Indonesia. He is a much sought-after business consultant and corporate management trainer in Sri Lanka.)

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