Coping with Organizational Change

Coping new strategies, downsizing, mergers and acquisitions, re- engineering, shifting markets, the economic downturn, and the technological revolution has left business exhausted.

Change has wrought so much anxiety and fatigue that many view it as a horrible beast.

A recently released book by Jeanie Daniel Duck, senior vice president with The Boston Consulting Group, captures this metaphor. She calls her book the Change Monster, and it describes powerful emotions and complex interpersonal dynamics that erupt during major change efforts.

Applicable to large and small companies, the book addresses newly merged firms, those rolling out a new product, government – owned or regulated businesses, utilities and toppling monopolies. The Change Monster is based on case studies with a cereal company, a defense contractor and a hospital emergency ward.

After studying these different organizations Ms. Duck saw a pattern emerge even though they were in different sectors, situations and cities. “They all began to sound alike. I found that astounding,” she said.

Duck says businesses must attend to sometimes overwhelming emotions or risk losing star talent, market share, profitability and competitiveness.

Take for example, the plight of a large juice company in Alberta, that purchased a smaller bulk bottled water business to increase its market share two years ago. The company integrated its operations in name only. In reality, it ran the juice and the water units separately.

The arrangement seemed to work initially but due to senior management divisiveness, staff resistance and the economic downturn, the failure to integrate the acquisition slowed profitability.

Changes crucial to organizational survival can generate vehement opposition springing from fear of the unknown as well as what employees can anticipate all too well: job losses, Duck said in an interview.

To help businesses deal with rapid upheaval, she created five phases that make up what she calls the Change Curve.

“Change is a rather predictable phenomenon. I thought if [leaders] understood what was going on they’d be able to decrease the stress of the people they were leading.” Duck said.

The first phase, stagnation, is marked by a lack of leadership, product failure, or despair over falling share prices and sales. The means by which companies try to cope can include restructuring, takeovers or mergers and acquisitions. Internally the companies find themselves re-organizing, cost cutting (laying off), and re- engineering.

Next comes preparation. It begins when the company decides to change, by, for example, creating innovative strategies, designing new structures, products and services. This phase requires leaders to unite behind the new initiative. Ms. Duck warns a divided leadership team can scuttle any change.

Ideally, the company should share details of the transformation with employees and give them time to assimilate it, explaining the change message frequently. A new way of doing something created in four months can’t be communicated to staff in a one- time, hour-long presentation, she says.

Next, implementation begins, with company announcements to staff concerning new assignments and processes.

Leaders must help people understand the plan and the decision to change. Bosses are encouraged to be transparent about the change taking place.

In influencing people to change, leaders sometimes assume that formal communications like newsletters, videos and emails is sufficient.

However, Ms. Duck says person-to-person conversation between leaders and employees is vital.

In particular, employees can be pro-active, making sure they know what this new initiative is about, what it means to them and their job. If necessary they should approach the boss with questions, she says.

Leaders too, must stay engaged, ensuring staff members tackling new assignments are matching expectations.

The fourth phase, determination, is a problem solving, trouble shooting stage. Leaders should address all problems honestly, be accountable, resist retreating to old ways and ask for and use staff suggestions to solve problems with components of the change plan.

Finally (and hopefully), the company enters the fruition phase with rising stock price and sales, talent retention and increased productivity.

Duck recommends celebrating achievements with staff members taking time to distill the learning garnered from the change exercise. But company leaders are reminded the change monster can rise again if they’re not constantly looking for new opportunities.

The Change Curve is a handy overview of the stages undergone during large organizational shifts and it familiarizes business people with how change typically happens at this level.

In our practice, we find employing change maps helpful, especially when business needs to find its way through so many varied and complex changes. Knowing what’s ahead, what to expect and a present location soothes anxiety while relieving exhaustion and despair during transformations.

Returning to the beverage company, the organization realized it had yet to align the leadership behind the integration making it difficult to become a unified entity instead of two separate operations. Recognizing the need for senior leader cohesiveness as a first step the team engaged in intense meetings unearthing leadership animosity, distrust and ambivalence.

A re-organization of the leadership team took place. Slowly the business began to reap the benefits of integration and there was renewed enthusiasm for the business and optimism about its future. The business successfully instilled a major change process.

Identifying information in cases cited has been changed to protect confidentiality.

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