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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Scoring Short-term Wins
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If a re-engineering effort delivers cost reduction as promised in a given time, then it is a win. Similarly, if a reorganization leads to reduction in the company's new product development cycle from 10 months to 3 months, then it too is a win. These wins are short-term wins because they are attained in a relatively short period. Whatever the size of the organization, some small wins are clearly necessary in the initial stages of transformation. According to Kotter, a short-term win has the following characteristics: Why are short-term wins important?Scoring short-term wins is important for the following reasons: |
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• They reinforce that sacrifices made by the organization are worth the effort. The wins provide justification for short-term costs.
• Positive feedback that comes with these wins boosts the morale of the people attempting change, and improves their motivation levels.
• As short-term wins provide concrete data to test the vision against reality, they help fine-tune the vision and the strategies to achieve it.
• They provide evidence that clears the doubts of cynics, and undermines the resistance of people interested in maintaining the status quo. Improvements in performance reduce the obstacles that stand in the way of change.
• Short-term wins also step up the momentum of the change effort by converting people who were earlier undecided, to supporters of change, and transforming reluctant supporters into active helpers.
Consolidating Change
Any major change takes time to take effect. Many factors influence the movement towards change. If there is a turnover of some principal change agents, this reduces the momentum of change. A similar problem arises when the change leaders in the organization are exhausted by their efforts. Short-term wins help the firm continue in the direction of change with the same momentum. But if short term wins are celebrated too much, this can lead to a reduction in the sense of urgency. Once this urgency is lost, forces opposing the change take over, and derail the change process.
Change does not take place easily. There are two reasons for this: changing corporate culture is extremely difficult (this aspect is discussed in detail below); and the inter-connections between the different parts of the organization make it difficult to change anything without changing everything.
One part of the organization influences decision making in another part of the organization either directly or indirectly. In order to bring about change in an organization, it is usually not enough to change a particular element in the organization. Several elements in the organization need to be changed at the same time.
In the phase of consolidation, the guiding coalition attempts to cash in on the credibility generated through short-term wins. It does so by taking up larger change projects. More people are brought into change mode to promote and bring in more changes. The top leadership makes an effort to ensure clarity in the shared purpose of change, and maintain a sense of urgency. People from the lower levels of the organization also start taking initiative, and provide leadership in specific projects. Senior managers attempt to remove redundant interdependencies to make change easy both in the short term and the long term.