Leadership Challenges - Managing Change in Organizations
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Keywords
Chris Argyris, John P. Kotter, market share, ROE, Coalition, Vision, Strategy for Change, communication
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Transforming an Organization
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Transforming an organization requires initiative, cooperation, and a willingness of the employees and managers in the organization to make sacrifices. Though change involves a certain amount of pain, according to John P. Kotter,4 an organization attempting to change can minimize this pain by establishing a sense of urgency, creating a guiding coalition, developing a change vision and strategy, communicating the change vision, empowering employees for broad-based action, generating short-term wins, and consolidating change. Each step is part of the process of change, and lasts for quite a long time. Mistakes made in any of these steps can undermine the momentum of the change process significantly. The steps are explained in detail below: Establishing a Sense of UrgencyComplacency is one of the obvious reasons why organizations don't change.
Complacency prevails in the organization for the following reasons. |
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But if one looks closer, there certainly could be a crisis. The company might be gradually but consistently losing its market share and margins. As this is not an immediately engulfing issue, the sense of urgency may not be apparent.
• Employees and managers work in an office environment that still reflects past glories and not current realities. As a result, they are not constantly reminded of where they are, and where they are headed.
• The structure of the organization defines performance in terms of functional goals only, and not in terms of goals at the organizational level. In such organizations all the departments have their own indices to rate their performance. But none of these indices reflect the overall performance of the organization on parameters such as total sales, return on equity, and net income. This mechanism breeds an environment where none of the employees are concerned when the organization goes down in terms of these parameters.
• Managers and employees manipulate internal planning and control systems. They not only change objectives but also the way the organization sets its objectives. At one organization, Kotter observed that an objective was to
"launch a new ad campaign by June 15." But neither this objective nor its subsequent objectives were concerned with the results of this campaign. Results means responsibility, and accountability for their actions.
• Managers and employees seemed to want to avoid these. When managers in the organization do not accept responsibility for growth, naturally a sense of complacency prevails.
• Lack of appropriate performance feedback owing to faulty internal systems. Even when the company is losing its market share because of the poor quality of its products, the company hardly receives any complaints from irate customers because of the absence of a mechanism for receiving complaints. Further, when some responsible employees try to get down to work and address the problems, they are either ignored or discriminated against.
4] Professor at Harvard Business School, and author of the best-selling book "Leading change."