Challenges faced by management today:

Management of change

Dr K Kuhathasan-CEO: CENLEAD

We live in turbulent times. Rapid technological changes are creating dramatic dislocations in the workplace, altering what people do, the skills they do it with, and how business firms compete. These and other revolutionary developments challenge many of our most cherished firms and institutions to rethink how they are organized to deliver quality products, offer valued services, provide satisfying employment, and maintain effective global citizenship. Increasingly, they signify pressure on leaders and managers to executive wrenching revisions of organizations, to carry out strategic change.

Reorientations of this sort are fundamentally creative acts: They require individuals and organization capable of recognizing the limitations of an existing framework, conceiving alternatives, and mobilizing the support to enact a vision.

Change is always with us

Change is one of the most critical aspects of effective Management. The turbulent business environment in which most organizations operate means that not only is change becoming more frequent, but that the nature of change may be increasingly complex, and the impact of change is often more extensive.

Many of the change situations in which a manager can be involved are incremental rather than fundamental, and although there is some common ground, there are also differences in how these two types of situations should be managed.

Badly handled change situations can lead to serious consequences, which may include:

* The frustration of otherwise sound strategies. Research suggests that many planned strategies are never implemented, often because the change process is badly managed.

* The costs of implementation may rise. Delays, spoilt work and emergency action to reduce the impact of delay all add to costs.

* Benefits of change may be lost, for example through competitors getting in first and taking the market share.

* The human consequences of change may become greater. The human price when change leads to people losing their jobs is already high, but it becomes much worse when the change is handled carelessly or without adequate planning.

* Motivation may be reduced within the organization as people feel the confusion and chaos that often accompany a poor change management situation, and faith is lost in senior management.

* Resistance to future changes may increase as people feel that their worst fears about the change are justified.

Causes of change

Many organizations appear to be in an almost continuous state of change, and the breathing space between one change and another tends to disappear. What are the forces causing this?

* Technological change continues to accelerate, so the speed with which obsolescence occurs is also increasing. Organizations cannot ignore developments which could give advantages to their competitors, and it is very rarely that a new development can be substituted for an old one without causing changes to skills, jobs, structure and, often, culture.

* Competition is intensifying, and becoming more global. More organizations are compelled to attain the standards of quality and cost achieved by the pacemakers in the industry. More industries are served on a world basis, and in these conditions it is no longer sensible to think on a single country basis.

* Customers are more demanding, and will no longer accept poor service or low quality. To be competitive organizations have to respond more rapidly to customer needs, and these change over time.

* The demographic profile of the country is changing. In many EU countries and the USA the proportion of older people is increasing and that of younger people reducing. This will bring continual pressures on organizations.

* Privatization of publicly owned businesses continues, and their monopoly protection disappears. This is a world trend, and even where ownership does not change, new systems are being established to create competition and market forces, as in the National Health Service.

* Shareholders demand more value. The influence of money markets on demands for corporate performance, with high proportions of shares residing with institutional investors, creates pressure for continued improvement in share earnings.

Typical change situations triggered by these forces include:

* Downsizing, or rightsizing; both expressions which mean that organizations are becoming smaller, and structures flatter.

* Approaches that lead to rethinking ways of doing things, such as world-class manufacturing, business process re-engineering and continuous improvement.

* Increase in outsourcing of activities previously handled inside the organization.

* Methods that reduce time in the development of new products or activities.

* More organizations become involved in strategic alliances and joint ventures.

Resistance

Equally important is the degree of resistance to change.

If everyone wants change, the implementation methods may be very different from those chosen when resistance is high. Where resistance occurs is also important; the higher the organization, the harder it can be to overcome.

The style of strategies suggested for handling the various change situations vary from participative to dictatorial, and suggestions are made below for appropriate approaches for each situation.

The problem with general advice is that situations are always specific, and certain situational factors should be considered which may modify the approach. The following questions should also be considered.

* What are the skills and abilities of those affected by the change? Participation may have to be reduced if the people involved lack the ability to contribute, and cannot be brought up to speed quickly. Where lack of ability limits the effectiveness of participation, it may be necessary to substitute extensive and regular communication for total involvement.

* Are people motivated to participate? The method chosen will also be affected by the willingness of those affected to play a part. Even where resistance to change is low, those affected may not wish to play an active part in determining how to implement the change. When the change is fundamental, such as removing layers of management, motivation may be different at different stages of implementation.

*Does the suggested approach fit the organization's culture? It may not be impossible to use an approach which goes counter to the normal culture of the organization, but it may sometimes be more effective to modify the approach to achieve a better fit. Extensive participation may be viewed with suspicion in an organization with a boss-powered, fear culture. Equally, a totally dictatorial approach may demotivate if the organization is normally participative. It should be remembered that fundamental change often includes a need to change culture, and if so the way in which change is implemented should give consideration to both old and new values.

* How confidential is the change? Confidentiality is more likely to affect the point where involvement can take place than to prevent it at all. It should not be used as an excuse for using a less appropriate change strategy over the whole lie of the change than would otherwise be desirable.

* How important is it to retain the loyalty and sustain the motivation of the people affected?

In most situations many people affected by the change will continue working in the organization, but this is not always the case.

Right approach

When thinking of approaches to change management, it is worth remembering that if it fits situation, participation is likely to yield better long-term results than persuasion, and persuasion is preferable to coercion. Four words that might be kept in mind when selecting the right approach are:

Pride. Do not feel too proud to involve others, as this does not imply weakness on your part. Misplaced pride could lead to your using an autocratic approach when participation would achieve better results. However, participation does not involve abdication, and calls for a higher level of managerial leadership than order giving.

Prejudice. Examine your prejudices when considering a change situation. Managers often make comments such as, 'They could not help as they do not have the right knowledge.' Check that this is not just as assumption that has become a prejudice.

Sense. In all management common sense has a great part to play. Ensure that all advice is given a commonsense check before you decide to follow it.

Sensibility. Many forms of change can hurt people, and this is particularly true of fundamental change. Sensitivity to other people's feelings may not always seem important, but it separates good managers from the poor ones. Change which causes people to lose their jobs is often unavoidable, but the way in which this is done is often unacceptable. Tact and consideration are important to those who are staying, as well as those who are leaving.

Why people resist change?

* An individual's predisposition toward change. This predisposition is highly personal and deeply ingrained. It is an outgrowth of how one learns to handle change and ambiguity as a child.

* Surprise and fear of the unknown. When innovative or radically different changes are introduced without warning, affected employees become fearful of the implications.

* Climate of mistrust. Trust involves reciprocal faith in others' intentions and behaviour. Mutual mistrust can doom to failure an otherwise well-conceived change. Mistrust encourages secrecy, which begets deeper mistrust. Managers who trust their employees make the change process an open, honest, and participative affair. Employees who in turn trust management are more willing to expend extra and take chances with something different.

*Fear of failure. Intimidating changes on the job can cause employees to doubt their capabilities. Self-doubt erodes self-confidence and cripples personal growth and development.

* Loss of status and/or job security. Administrative and technological changes that threaten to alter power bases or eliminate jobs generally trigger strong resistance. For example, most corporate restructuring involves the elimination of managerial jobs. One should not be surprised when middle managers resist restructuring and participative management programs that reduce their authority and status.

* Peer pressure. Someone who is not directly affected by a change may actively resist it to protect the interest of his or her friends and co-workers.

* Disruption of cultural traditional and/or group relationships. Whenever individuals are transferred, promoted, or reassigned, cultural and group dynamics are thrown into disequilibrium.

* Personality conflicts. Just as a friend can get away with telling us something we would resent hearing from an adversary, the personalities of change agents can breed resistance.

* Lack of tack and/or poor timing. Undue resistance can occur because changes are introduced in an insensitive manner or at an awkward time.

* Nonreinforcing reward systems. Individuals resist when they do not foresee positive rewards for change. For example, an employee is unlikely to support a change effort that is perceived as requiring him or her to work longer with more pressure.

Why people resist major change

* Financial concerns

* Fear of the unknown

* Erosion of power and influence

* Difficulty in breaking old habits

* Inconvenience

* Prior negative experience with change

*Legitimate concerns about proposed change

Eight-step process for managing resistance

* Identify both your's and the other's resistance.

* Imaging yourself actually saying what you were thinking.

* Clarify the other's possible dilemma(s) or loss(es)

* Clarify your dilemma(s) or loss(es)

* Imaging yourself actually informing these words.

* Explore reasons why you and/or the systems may be immobilized in light of role, task, and authority.

* Develop recommended changes to the system to relieve the stress.

* Determine what areas you are responsible for change.

How people react:

The seven dynamics of change

* People will feel awkward, ill-at-ease and self-conscious.

* People initially focus on what they have to give up.

* People will feel alone even if everyone else is going through the same change.

* People can handle only so much change.

* people are at different levels of readiness for change.

* people will be concerned that they don't have enough resources.

* If you take the pressure off, people will revert to their old behaviour.