Chasm of Change-Restructuring-The Goliath of Change
by Rick Johnson
Published on this site: September 9th, 2005 - See
more articles from this month
Restructuring - The Goliath of Change
Richard L. Daft one of the country’s recognized academic
leadership experts raises the question, “What kind of
people can lead an organization through major change?”
A Turn-A-Round restructuring qualifies as major change and
requires transformational leadership. Daft points out that
this type of leader is characterized by the ability to bring
about change through innovation and creativity. This type
of leader motivates people to not only follow their lead but
to believe in the vision of corporate transformation, the
need for revitalization, to sign on for the new vision and
to help institutionalize a new organizational process.”
Daft points to four principles in discussions about leading
an organization through major change. These four principles
are the foundation of the restructuring Turn-A-Round process.
- Create a compelling vision
- Create a new organization
- Mobilize commitment, Empowerment
- Institutionalize a culture change
Caution - Beware of the Dip
A “Transitional Performance Dip” is common when
introducing major change accompanied by a culture shift. Performance
most commonly gets worse before it gets better. There are
four phases of the transitional dip with associated cause.They include:
Denial - Confusion exists, feelings of being overwhelmed,
acting like nothing is different & checking out are common
employee reactions in this phase. Communication and sharing
of information is critical to overcoming this type of employee reaction
Resistance - Complaining, blaming others, spreading
rumors, frustration, anger and erratic performance are common
employee reactions. Again, communication, understanding and listening skills are critical during this
phase of the transition.
Acceptance - Renewed energy starts to become evident,
optimism appears and doubt begins to dissipate. Excitement
and risk taking become evident. This is when the vision must
be restated and shared with every employee taking the time for full explanation and answering all questions.
Commitment - Discretionary energy is released. Employees
become action oriented toward new goals. Ownership of the
vision is now company wide. Rewards and reinforcement are
essential during this stage.
The length of time or “depth & width of the dip”
depicting this phenomenon cannot be accurately predicted due
to the complexities that determine it. Factors contributing
to the length of time before the change efforts begin to show improvement can be impacted by the following factors:
- Magnitude of the structural changes
- Success of the communication to all employees
- External environment factors
- Critical mass of the company itself
- Competency of the middle management group and their experience
with structural and cultural change
- Competency of the executive staff and their people skills
- Effectiveness of leadership at all levels
- Severity of the financial crisis or level of financial
success
- Timing
Change Process
The restructuring change process begins with the strategic
restructuring of the organization, which is required to “Stop
the Bleeding.” This process starts with the immobilization
of the old culture. This is mandatory, as introduction of
change into any existing culture is difficult at best. Introducing
change into a losing or stagnant culture is almost impossible. This change must deal
with organization theory, social psychology and business history.
It must be dynamic and include the introduction of fresh new
leadership. This is a behavioral process. People can create
change but people also resist change. The change process introduced
must answer the question, “How do we get from here to
there?” The answer to that question is your new vehicle for success. This vehicle
includes the restructuring plan, individual one-year departmental
plans and every strategic initiative developed by the new
management team. Most importantly, this new vehicle is submerged in the empowerment theory releasing individual
employee initiative. The plans must be unified, simple, consistent
and universally understood by everyone. Most of the change
that has been introduced must be induced change versus autonomous
change. Autonomous change has a life of its own. It proceeds
due to internal dynamics and follows its own course. It is
not easily controlled as it forms its own dynamics. Induced
change is calculated and planned. It can be controlled if buy in is generated through
sincere communication and employee involvement. Each step
along this path will be accompanied by distinct challenges.
As questions arise, management must be prepared to answer
openly and honestly. While the old culture is suspended, change
can thrive under the right circumstances. It is the responsibility
of the executive team to insure that these circumstances exist.
The primary ingredients that create the right circumstances include open honest communication,
empowerment, risk taking, acknowledgment and reward.
Organizational Behavioral Process (OBP)
This is basic to creating change, and it becomes an important
part of the new vehicle for success. OBP may be described
as the wheels of the new vehicle. This process will carry
the organization on to new heights, new accomplishments. Organizational
behavior has its roots in rganizational theory and group dynamics.
People are the most important ingredient to every organization
and the organizations behavior. People and how they are treated will reflect the organizational characteristics, the way it
acts and interacts with its own people. Empowerment, the decision
making process and the communication channels are examples
of how the organization interacts with its people. Organizational
behavior is not easy to change. That is why it is so important
as mentioned earlier to immobilize the old culture to introduce
change. (E-mail [email protected]
for a list of immobilizers) The behavioral process of
the organization can withstand personnel changes. In other
words, changing out management does not guarantee change in
organizational behavior. You must take proactive steps designed
to create new organizational behavior. The new vehicle is
part of that. It includes, focused specific objectives, open
channels of communication, empowerment and a sincere respect for the individual
employee and his contribution to the organization. Organizational
behaviors become generalizations. They are discovered from observations of
everyday work habits and they have no independent existence
apart from the work processes in which they appear. They are
difficult to identify but they are extremely important. They
affect the form, the substance and the character of the work
processes themselves. They actually affect the way the work
process is carried out. They are different from culture because
they represent more than just values and beliefs. They actually are involved in the sequences producing
work. The decision making process is a major characteristic
of the behavioral process. The decision making process is a much studied process beginning with the
studies of Chester Barnard and Herbert Simon who argued that
organizational decision making was a distributed activity,
extending over time and involving a number of people. In other
words, decision-making is not the personal responsibility
of a single manager but a shared, dispersed activity that
they only need to orchestrate and lead. This is still a surprising
and often unaccepted theory of managers today.
The Eight Road Blocks to the Change Process
- The lack of a sense of urgency
- The lack of buy-in, a coalition of support
- An unclear vision
- Failure to communicate the vision
- Failure to provide resources and remove obstacles
- Not systematically planning and creating short term wins
- Declaring victory too soon
- Failure to anchor change in the culture as it is occurring
Sense of Urgency
Success at anything requires a sense of urgency, a commitment
to accomplishing something. If employees don’t have this
sense of urgency, complacency can become an issue. To meet
difficult challenges, to excel at anything, to create competitive
advantage it is absolutely essential that employees release
their discretionary energy toward achieving company objectives.
Discretionary energy is that extra that you can’t ask
an employee to give but is automatically given by those employees
that have a sense of urgency. Of course, no employee will
release that discretionary energy for a leader that has not
earned their trust and their respect. A leader will not be
respected by the employee until he shows respect for the employee. A leader
will not be trusted by the employee until he shows trust in
the employee.
Forming a Powerful Guiding Coalition:
Success is not an individual accomplishment. Initiating change
requires buy in and agreement. A group of believers, achievers
and team players must be assembled to not only support the
change process but to drive the process. The group must function as a unit showing unilateral support of
the change process. Examination of market and competitive
reality is part of the challenge as well as identifying and
discussing potential crisis, critical constraints and major
opportunities.
Creating a Vision:
Success at initiating change starts with the creation of
a compelling vision that provides a roadmap for the change.
This roadmap clearly answers the question “What’s
in it for me”. WIIFM. The vision is supported by the
development of strategy and action planning to achieve the vision.
Communicating the Vision:
Success requires leadership and leadership without communication
is like a gun without a bullet. It looks impressive but it
can’t do anything. A specific communication strategy must be outlined and acted upon to
insure that all employees are aware of what the vision is
and how it is expected to be accomplished including defining
individual roles and contributions. It’s about buy in.
Empowering Others to Act on the Vision:
When critical constraints or roadblocks are identified, they
must be removed or overcome quickly. This means allocating
resources accordingly. Systems or structure that can undermine
the change must be eliminated. Empowerment involves trust and allowing people to use their initiative
and creativity.
Planning for and Creating Short-Term Wins:
Milestones need to be set up to mark progress and allow victory
celebration along the change path. Success breeds success
and excitement breeds’ excitement. Create that success
and excitement by setting interim goals that can be achieved
and celebrated. Recognize and reward employees accordingly
that are part of the accomplishments.
Declaring Victory too Soon:
Interim success and short term victories are important but
don’t spike your own Kool Aid. Be realistic and keep
your long term goals in sight. Consolidate those short term
improvements to produce continuing change. Use increased credibility
to change systems, structures, & policies that don’t
fit the vision. Hiring, promoting, & developing employees
who can implement the vision is essential to continued success during a major change effort. Reinvigorate
the process with new projects, themes, and change agents.
Institutionalizing New Approaches:
Success must be anchored as it occurs and then built upon
by articulating the connections between the new behaviors
and corporate success. Leverage this success to ensure leadership
development and succession.
Make no mistake, effective leadership is about creating change.
This is true in every circumstance, whether a company is facing
restructuring or dealing with the challenge of accelerated growth. Change is the defining moment
that identifies true leaders from imposters. To become an
effective leader, understanding change, creating change and
most importantly managing change is the first
prerequisite.
Dr. Eric “Rick” Johnson ([email protected])
is the founder of CEO Strategist LLC. an experienced based
firm specializing in Distribution. CEO Strategist LLC. works
in an advisory capacity with distributor executives in board
representation, executive coaching, team coaching and education
and training to make the changes necessary to create or maintain
competitive advantage. You can contact them by calling 352-750-0868,
or visit
http://www.ceostrategist.com
for more information
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