Chasm of Change - Restructuring - The Goliath of Change
Author: Richard L. Daft
Last Updated: 8/7/2009 10:45:54 PM
Summary
Richard L. Daft one of the country's (USA) recognized academic leadership experts raises the question, "What kind of people can lead an organization through major change?"
Article
Richard L. Daft one of the country's (USA) 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.
1. Create a compelling vision
2. Create a new organization
3. Mobilize commitment, Empowerment
4. 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 organizational 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 rick@ceostrategist.com 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
1. The lack of a sense of urgency
2. The lack of buy-in, a coalition of support
3. An unclear vision
4. Failure to communicate the vision
5. Failure to provide resources and remove obstacles
6. Not systematically planning and creating short term wins
7. Declaring victory too soon
8. 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.
Author Bio: Dr. Eric "Rick" Johnson
(rick@ceostrategist.com) 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. Article Source: http://www.ArticleGeek.com - Free Website
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Published on Midlands Business News, Business News
for the Midlands: 18/7/09