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PRISM/BEST-Michigan
     

ORGANIZATIONAL CHANGE

"The greatest opportunities are created out of crisis. Crisis forces people to change and change often brings new opportunity."
Chinese Proverb

Business process improvements inevitable require change to an organization's structure and culture. Any significant change is likely to be disruptive. Consequently, business process improvements are likely to be disruptive to an organization's structure and culture. Enterprises that have attempted initiate process improvements while ignoring this syllogism have invariably failed. Therefore, organizational change management is one of the most critical responsibility in any program of process reengineering and improvement.

Dealing with organizational change is a continuous responsibility - management should begin to address these needs during the planning phase and should extend through the project execution phase. This responsibility may be vested in one member of the improvement team. This approach works when only one process improvement effort is under way across a group of functional units. When several functional units are affected by two or more improvement efforts, a more appropriate strategy is to assign this responsibility to a separate team chartered to support all process improvement teams.

The role of the organizational change management team is to ensure that the improved processes will be successfully assimilated into organization's structure and culture. The change management team must accomplish four general objectives:

  • Understand the organizational changes that are needed as a consequence of process redesign or reengineering;
  • Design the necessary structural changes needed to support the new process;
  • Design a program that will begin the cultural transformation of the organization to one that is aligned with the principles behind process improvement; and
  • Anticipate, recognize, and resolve the barriers to change that will spring up in reaction to the change management plan.

Organizational change management involves both structural and cultural change. Structural change management is concerned with the way functional units are organized to carry out their work responsibilities. Structural change management has to do with things or facilities. The focus includes policy and procedure, rules and regulations, management and staffing, facilities and equipment, and human resource practices.

Cultural change management is concerned with the way people interact with each other, both in peer relationships and in superior/subordinate relationships. Cultural change management has to do with people, and therefore, it is the more difficult of the two to successfully deal with. People and culture - the human systems of an enterprise - are what make or break any change initiative.

Managing human change
Managing change is critical in an age where technology turnover occurs in a matter of months, customers demand more for their money, and the competition is in relentless pursuit. One distinguishing factor separating business process reengineering (BPR) projects from other effort to respond to these factors is the risk of humans standing in the way of success. Any BPR leader and team must spend a significant amount of time managing executive and employee perceptions.

Senior management often sees change as a program which can be handled by broad-based initiatives through a series of clearly defined steps. This perception arise because they are usually so steeped in the realities of business pressures and recognize the organizational changes that must occur. The vision and the objectives are so clear in their own minds, they assume staff will understand change is necessary and will support them in every way. Executives fail to understand that employees seldom perceive change with the same clarity and determination as they do.

Employees are often skeptical, since cultural change is based on a corporate perspective, not on individual needs, each of which is different. Fear and concern center around compensation, job security, sense of worth, perception by others, position and social patterns. Employees may not be confident the organization will properly manage the transition. They may also be afraid about a lack of support while moving to a new job, if they have one at all.

Staff must first know what is happening, when it will happen, and how they will be impacted. Employees must believe they will get the training, knowledge, information and authority to manage performance affecting the products and services they deliver.

Projects must have strong, credible leadership and sufficient time and resources for high levels of communications, information gathering, participation, collaboration, education, training, and appropriate incentive and reward systems. Employees may also require support groups to help staff change, one person at a time.

Employees also need time to adapt. Therefore, change activities should start from the assessment phase of the BPR and go through to implementation. Change management cannot be just an afterthought.

The change hierarchy of needs
All changes are not the same. Nor are the consequences perceived in the same manner by all participants in the change process. Some people ignore minor changes; others are very upset by them. Big changes may not bother employees if these changes are "off at corporate." People often use a progression of evaluations - questions that they ask to assess change. Ken Blanchard, author of Leadership and the One Minute Manager, believes people change on the job by asking themselves and others the following questions, in the order specified:

  1. What is it?
  2. How will the change affect me and my job?
  3. How will I be evaluated?
  4. How will this change be conducted?
  5. What are the benefits?
  6. What will the overall impact of the change be?
  7. How can I help others with the change?
  8. How can we implement improvements?

This series of questions is somewhat analogous to Maslow's Needs Hierarchy, but adapted for process reengineering change. Maslow states that if a more basic level is not satisfied, a higher level will not be of importance to the organizational personnel. That is, if management cannot explain how the change will affect an employee (Question #2), then the employee will not help others change (Question #7). Management programs that ignore this theoretical construct usually fail.

Why BPR is so difficult
One of the reasons why change is so difficult is because managers bring their old perceptions with them. They cannot get rid of them; they just take them and charge ahead. Managers frequently believe that a reengineering project will be exactly like previous efforts to reorganize to increase efficiency. They charge ahead without properly planning or taking human behavior into consideration. Before they know it, the project is terminated because too much time and money has been spent and there are no tangible results. Then they wonder, "Where did the project go wrong?"

When BPR facilitators enter into a change situation, they are setting into action a profoundly complex set of actions and reactions which must first be understood and then managed. Facilitator may not come close to understanding what they are dealing with during the transformational process. They may look at current situations with a mind conditioned by their past experiences. They often feel disoriented and confused. Rather than using this state of confusion as one in which they can explore and discover, they may jump to incredibly simple-minded explanations. This response rapidly returns them to a state of equilibrium, but without any new project insight. In reality, each time anybody looks at change intervention, they are standing at the edge, overlooking an abyss. Rarely do we recognize the danger, however.

The reason for this danger is that the facilitator assumes the models which have been developed for a given "reality" are generalized to others. For example, change facilitator may believe that what they learned working for the Department of Commerce is generalized to the U.S. Postal Service; or what was done at General Electric is transferable to General Motors; or what worked successfully in the private sector will be equally successful in a public university setting. Their assumptions are wrong. Each of us has a different idea of how the universe should be.

Three reactions to change
Employers and employees must recognize that people react to change in different ways and in different stages. Eileen Wolfe has identified three behavior patterns, or reactions, are exhibited in a stressful change management situation: victims, survivors, and navigators. [1]

1. Victims

  • Perceive themselves as independent of the facts.
  • Feel threatened with hostile situations they can't handle.
  • Panic and respond with "fight or flight."
  • Become fatalistic.
  • Oversimplify the world into good or bad, limiting their alternatives.
  • Are never happy and complain about everything.
  • Become pessimistic and cynical about management's intentions.
  • React by waiting for change to overtake and crush them.

2. Survivors

  • Believe they are at the mercy of circumstances they cannot change.
  • Believe they can survive the change if they simply "hold on" or become competitive with other employees.
  • Convince themselves that "grasping" and "clinging" are necessary for self protection.
  • Respond with anticipation to what is coming and behave accordingly.

3. Navigators

  • Face the pain of change and take a proactive approach.
  • Create a vision of the desired future.
  • Gather pertinent information and assertively pursue the vision.
  • Manage the stress of change well by cultivating a belief in their own ability to deal competently with the situation.
  • Believe in being the cause and influences of events rather than the victim.

Overall, being a navigator is the most effective way of managing and handling change. As the label suggests, a navigator has greater control-has a hand on the tiller-and can help to steer the necessary changes in a direction that benefits both him/her as well as the overall organization.

The stages change
Four stages of personal change manifest themselves in the reengineering change process: disbelieving, balking, testing and adapting. In the disbelieving stage, change is seen as a threat. People are afraid and react accordingly. With balking, letting go of the past is extremely difficult. Individuals angrily hold on to and defend the old way of doing things. When the stage of testing is reached, they begin to see the value of change. Effort is made to seek and test ways to feel more comfortable about accepting change. They want to examine the pros and cons. Finally, with adapting, they feel comfortable with the change and are ready to adapt and embrace the new routines. Unfortunately, not all participants in the change process more successfully through these four stages.

The challenge for managers is to recognize the stage of personal change each employee and responding accordingly. A significant amount of individual attention and communication is required since everyone will be in different stages at different times.

Organizations also go through stages of change: destabilizing, acknowledging and restabilizing. Perceptions and attitudes are destabilized when long held beliefs are challenged by new information. Transformation begins when employees collectively acknowledge the benefits of long held beliefs, but also recognize things could be changed to their advantage. Perceptions, attitudes, and behavior restabilizes when all or most employees believe the organizational benefits warrant the personal risk attached with reengineering change.

Successful change management
The steps of reengineering change are awareness, understanding, and finally, acceptance . These steps have a direct correlation to commitment. As each step along the way is well-handled, the level of change commitment generally increases. An effective change management process requires individual consideration, as the following seven steps demonstrate:

  1. Describe change and its reasons.
  2. Explain change impact on employees.
  3. Encourage questions and allow for expression of concerns.
  4. Respond to any questions and concerns.
  5. Restate or reemphasize alternative behaviors.
  6. Gain commitment to change.
  7. Confirm and get input on implementation plans and establish a follow-through process.

Success depends strongly on communication. Plan the content of the message for every phase of the BPR process; train the messenger or agents of change; determine the communication medium; be honest, flexible and empathetic.

Navigating through the seven steps requires commitment from the organization's top management. It requires a clear vision, shared throughout the organization, repeatedly communicated, and widely circulated. Successful change management maintains a connection with what was done well in the past. It focuses on the process, not the people and uses the past as stepping stones to guide future activities. Change management means caring, listening and responding to individual needs and concerns: it is people management. It also means helping people to use their insights, skills, and sense of values to move forward through team efforts and joint diagnosis. Most importantly, successful change management means openly valuing personal contributions to the process. It is accomplished by:

  • Educating people about the change.
  • Planning for change and managing it as a process.
  • Assessing organizational readiness in terms of corporate culture, the right timing and adequate resources.
  • Identifying and utilizing critical roles.
  • Demonstrating commitment through active involvement and role modeling.
  • Communicating in a clear, honest and open manner.
  • Objectively assessing and preparing for implementation barriers.
  • Limiting crises and turning them into opportunities.

Conclusion
"Effective human change management is a long journey and in many respects we have just begun. Each change we face presents new circumstances, challenges and opportunities. As change leaders, we have not only the responsibility, but the privilege of encouraging and guiding others through change journeys. As we learn to initiate and embrace change, we will do much to forward our organizations and the people within them." [2]

Endnotes [1] Eileen Wolfe, "Human Management: The Achilles Heel of Business Process Reengineering," Enterprise Reengineering (September, 1995). [2] Ibid.