Change is unavoidable:

How to manage change in your organization?

Dr. K. Kuhathasan-CEO: CENLEAD

In the modern world, change is unavoidable, constant and accelerating.

There are two ways of answering the question "Why do organizations change?"

The pace of technological change has been phenomenal. There have been many radical innovations in systems and procedures.

On the one hand, most organizations can point to one or two obvious or immediate casual factors. These are referred to as 'triggers'. Quite often triggers are disasters of one form or another, such as financial disasters or environmental disasters.

Other triggers include the arrival of a new Chief Executive. Opportunities from new technological developments and emergence of threatening competition.

A trigger precipitates change, but for most organizations the underlying reasons for change are immense change to the environment in which the organization works: economic, technological, political and social.

The rate at which some of these changes to the environment (e.g. technology) can take place is now extremely rapid and is accelerating each year. Change is becoming the norm and stability the exception.

Change in economic environment

Economic change fall into two main categories:

* Short-term cyclical changes

* Longer terms underlying changes.

Short-term cyclical changes

These include change in the business cycle, interest rates, exchange rates, inflation, taxes and property values. They are only partially controllable by Governments and require quick flexible responses by all organizations affected by change.

These cyclical change usually requires a tactical response, not strategic: But in extreme cases they can endanger survival and act as a trigger for major structural changes.

However, a more serious problem is that Government leaders and business leaders are often tied up fire-fighting short term cyclical changes and do not consider long term, underlying changes in the economy.

Long term underlying changes

These are more dangerous than short term changes.

Long term underlying growth rates in different world regions, globalization of markets, the need for world-class products and services, growth of regional trade blocks, competition from unexpected areas and deindustrialization of the developed world.

Technological changes

The pace of technological change has been phenomenal and is still speeding. Recent new inventions include:

A whole range of electronic products such as low cost personal computers, fax machines, digital video cameras, palm-top computers, compact discs. DVDs and mobile phones.

New models and products tend to have shorter and shorter life-cycles because of the increased pace of new invention.

Computer technology has affected the way that goods and services are produced by nearly all organizations, including Governments. Cars produced by electronic robots, 24-hour cash machines at banks and collection of road tax by electronic sensing machine on motorways (Singapore).

Computer technology does not merely speed up an existing process - it often means that organizational structure has to be radically re-designed.

There have also been many radical innovations in systems and procedures available for use in business and Government: e.g. 'Just in Time' inventory control, principles of total quality management and business process re-engineering.

Developments in processing and transmitting information

The combination of computers and telecommunications has created a revolution in the way that information is transferred and processed. These changes have resulted from the rapid development of computer networks, ranging from small local networks in use by a single office through to the 'Internet' which is a worldwide network of computers connected by telephone.

The Internet handles information in two main ways:

email: (electronic mail) through which messages and whole documents can be transmitted in privacy to receivers on the other side of the world in a matter of seconds.

The world wide web: users create 'web pages' which are for public access; these pages enable users to read documents, listen to music, watch videos and 'live' recordings, make purchases, participate in surveys, advertise products, do research, share interests, make cheap telephone calls and download files.

Growing consumer power

A steady, relentless change over the past 50 years has been the growth in consumer awareness and a growing reluctance to accept substandard products and services. This has led private and public sector bodies to continually seek improvements in the quality of what they offer, while controlling costs to create better value (e.g. the development to Total Quality Management).

At the same time as the enormous drive for quality and efficiency there has emerged the need for organizations to respect the growing power of the 'Green labby'. People are now far more aware and concerned about environmental issues: e.g. pollution, artificial additives, safety, unnecessary exploitation of people and animals.

Consequently many products which work quite adequately become absolute because they, or the process by which they are made, harm the environment (e.g. fur coats, ivory, aerosols containing CFCs).

One recent survey suggested that 50 percent of French and 80 percent of West German consumers chose environmentally friendly goods when shopping in supermarkets.

Social changes

Changes in attitudes, values and beliefs growing global concerns include health and safety, concern for the environment, the role of women and the use of children at work.

Triggers for change

Triggers for change fall into the following main categories:

* Financial losses

* Increased competition

Recession

* Technological development

* Conditions attached to loans

* Cut-back in resources

* Need to improve staff utilisation

* New legislation

* Arrival of a new Chief Executive Officer

Opportunities or events foreseen resulting in proactive change.

As can be seen, most of these triggers result in reactive change (a response to adverse conditions). Proactive change (change resulting from foresight even though present conditions are good) is far rarer but is the ideal to aim for.

Scan your environment

Be proactive - don't wait for a trigger to force change on you. Start by scanning the environment to identify the need for change.

Shell anticipated the oil crisis of the early 1970s.

The Singapore Government monitored the problems caused by ageing populations and scope on social security payments in various developed countries and took action to avoid the same problems.

Hewlett Packard's philosophy is to anticipate what is needed in the future and ensure the product is in place. Glaxo Group changed at its moment of greatest success, not after things had started to change around it.

How do you adapt?

Keep close to customers and their needs. Don't ignore customer criticism.

Expect the rules of the game to change frequently.

The job is too big for just top management.

Use scenario planning.... It creates power to respond to any ball that's bowled at you!

Use external audits of organizational health. You may be too close to read 'the writing on the wall.

How IBM adapted because of rapid changes in its business environment.

Past

Few large customers

Traditional competition

Predictable technological change

Hardware - dominated

Direct sales force

One set terms and conditions

Present

Millions of smaller customers

Thousands of competitors

Exploding rate of change

Software/systems solutions

Business partners/alliances

Many ways of doing business