/change

IS MANAGING CHANGE JUST ANOTHER HR BUZZWORD?

Many people in the fast-flowing waters of a changing organisation or those trying to instigate change against a seeming wall of resistance might be forgiven for thinking that managing change is indeed an oxymoron. It can be argued that we don’t so much manage change as react it or embark on it, often blindly. Once in the throes of change the random events of life and the complexities of human nature take over. Of course, change comes in many forms, some more disruptive than others.

CHANGE CHARACTERISED BY RATE OF OCCURRENCE

Some organisations are constantly changing like FMCG where standing still is tantamount to suicide or in fast-growing industries. Micro-chip manufacturers Samsung as a case in point, currently the most successful mass-market chip manufacturer in the world, they work to a business investment cycle defined by generations of chip technologies. Here new markets emerge fast, as consumer fashions and market trends dictate that new devices and new features are suddenly needed, and in volume. As the pace of change increases, so the nature of competitive advantage shifts from having the lowest manufacturing cost base, to the ability to acquire and deploy new technologies quickly. In their world agility and scale, often regarded as opposite poles in terms of competitive advantage, need to be brought together as mutually supportive talents. Madonna, a corporate entity rather than just a pop act has a strategy based on building new consumer loyalty (fans) to replace those lost through changing tastes and fashions. Understanding that pop music is a form of fashion, she exploits the change by reinvention of image and re-packaging of music in styles which follow a yearly cycle and which coincide with each new album. This is surely managing change and in this case it is internally generated change in the face of external change, in this case, music trends. It’s clear that something is happening here in terms of conscious actions in response to external events but is it management? “There is a big difference between changing ourselves, which is something we all do over time, and managing change through others.” The term “managing” however implies control of resources, setting objectives and methodology.

“People don’t mind changing just being changed, and this is the nub of change management”.

It is about changing others in such a way that the people being changed are more effective after the change than they were previously. We all know that adapting to change on the personal level is often uncomfortable and stressful. To manage others through this process must therefore recognise that even change for the better has some negative aspects for the people concerned and so we need to factor in these personal feelings with the business outputs that our change may seem to be all about. This is especially true when change is externally driven and so both the pace and timing our outside of our control, as we will see.

CHANGE CHARACTERISED BY HOW IT COMES ABOUT

There is a big difference between internally generated change, and change in response to external factors. This is usually manifested through how we see the change. Internally driven change is often motivated by opportunity, even if the alternative is painful. Externally driven change sometimes arrives through a presented opportunity but may also be a response to a perceived threat. Some see change as an opportunity: for advancement or achieving personal ambition others see change as highly threatening and wrong-headed. For example, a takeover may bring new promotion opportunity, however it may also bring a loss of livelihood if your skills are in surplus in the new entity. When change is necessitated by external factors such as global competition, regulation or changing customer tastes then debate can seem a luxury which can be ill afforded. There are certainly times when senior management have to drive change through without consensus, such as when the future of the organisation is at stake.

If your house is being swept away in a flood there is no time for debate on whether to leave. External change shown through changes in market trends or regulation are the most immediate since they affect the competitiveness of the organisation and so demand an urgent response. In the case of external change through competition it is very tempting to simply react by top-down changes. There are a number of limitations to this approach, however. Top amongst these is that top-down change gets progressively less effective over time. People will accept that there is a crisis and so will be told what to do, though not repeatedly. More often there is a wide spectrum of responses to externally driven change, here we can only claim to be managing change if our response is creative, decisive and motivational, or a reflex of cost cutting and lowering prices.

CHANGE CHARACTERISED BY SCALE

What about when we are used to small changes and suddenly a much larger change is called for? Small change is really just a variation, and we can argue that management is essentially about managing small variations in the status of operations. We used to call it continuous improvement and Total Quality Management in the 80’s, however Lean Six Sigma is about reinventing the machine not tuning it better.

Are these changes worthy of a different management approach to business as usual?

When change is on a massive scale, for example through disruptive technology such as the invention of the iPOD or the mass deployment of WiFi public networks, theeffect on whole industries can be enormous. Management in conventional industries can find that their business profitability disappears overnight, while new ones emerge with different rules of engagement. Interestingly, in this case the juxtaposition of fashion and technology has made design and adaptability as important as core technology, which is mostly comprised of commodity components. The innovation behind the iPOD is based on packaging, not technology. When the scale of change is significant, management need to change the strategy as well as trying to manage the change. This is often a source of confusion as changing direction is not the same thing as changing the operation or ethos of an organisation. This can lead to the view that managing the change is about changing the organization chart and shuffling the roles. This leaves the most important aspects unaddressed, since changing the structure of the organization often necessitates changes to targets and rewards, capabilities, processes and the assets used. Where we need to change the ethos of an organisation this will follow the more obvious changes listed above.

Ethos is the hardest and slowest thing to change because it follows new behaviour and so new thinking. Ultimately change is not one single type of event but several. They can sometimes be combined in the way that they affect the organisation, individual or even society as a whole. Managing change implies that events which result from or constitute the change are somehow under the control of management and the governance of the organisation. This takes a sophisticated approach to planning and execution. Managing change must start from understanding what is happening and what the best outcome would look like, aka “visioning”. It is important that the vision or clear idea of what a better state for the organisation would look like is a shared one and not the sole property of a single individual. Recognising the need for change and creating a shared vision are the first steps in making a new future for the organisation. Many companies and public sector bodies find themselves reacting to change because these stages have not taken place. Having understood that the case for change is compelling and the future vision, the next stage is communicating the vision with a sense of urgency. Managing change doesn’t have to be done at breakneck speed but it must be understood to be imperative. Equally the way that the vision is communicated must be itself compelling. The communication to those we seek to inspire and motivate must be in their terms of reference and not ours alone. This is particularly important because when we are undergoing even positive change (i.e. to our benefit) we will face a period of anxiety and even denial in which our focus of attention is decidedly self-centred.

The next stage is planning. Another stumbling block because many of us find it hard to plan for an uncertain future and for the way that we will change how others think and behave. The plan for change needs to anticipate the obstacles which need to be overcome and how the natural resistance to change will be surfaced and managed.

Since people do not like to be changed in general, we need to make it better to adapt than to resist and accept that not everyone will be supportive, irrespective of seniority. Studies have shown that typically 25% of people in a major change in working patterns cannot make the adjustment and so some fallout is inevitable.

It is also important once change is embarked on, not to go back. Effective change is irreversible and not based on “fence-sitting”. Finding some short term benefits is important to ensure that the sponsors (authorising body) see that their investment is paying off. and that the people affected by the change can see that it is indeed beneficial.

Managing change is about taking steps which make the situation better for those who are intended to benefit from it. If the steps are too big or the change takes too long people will lose faith or something far short of the vision will be achieved as the momentum of change is dissipated.

I hope that I have been able to show that managing change is not as simple as it seems and so happens less often that we might like to admit.

Merely reacting to change is not managing it. Those who can effectively manage change, like Madonna and Samsung can thrive even as the whole basis of their markets change. Adaptability may be one of the most lasting strategic advantages, but adaptability with control makes for lasting success by retaining the power of the team after the change has taken place.

Kevin Parry – PM Group

Copyright Six Sigma City Ltd 2007