Monday, January 08, 2007

Change Management

Change is constant in the world. Very little stays as it is for long. This is true in the workplace as well. Any manager who becomes too comfortable with the way things are stands the risk of being left behind. The Bible even notes in I Corinthians 10:12 “Wherefore let him that thinketh he standeth take heed lest he fall.” Sometimes change can come gradually but others times it can become necessary quickly.

Not surprisingly, a lot has been written on this topic in scholarly literature. A search of the database WilsonSelect in October 2006 returns 400 hits on the search phrase “change management and leadership.” While not all deal directly with the idea of change management in the workforce, most do.

There are a variety of issues evident in this literature. Three themes in particular stand out. These include the importance of change, risk taking, and change management models. All three of these issues will be examined through the theoretical framework of contingency (middle range) theory. This theory holds that management is relative to the situation at hand and is not fixed. It also postulates that the manager must be reactive and come to correct decisions based on environmental scanning.

Importance of Change

Many people are resistant to change. Sometimes, this resistance is justified. Why change just for the sake of changing? However, in many cases change is a necessity. Many authors have written on this topic helping leaders and their subordinates understand how important change is for any organization.

Black and Gregersen (2003) wrote that leaders fail to initiate change because they fail to see the need, they feel to act when they do see the need, or they fail to finish the change. They further wrote that leaders who fail to implement needed change would bring disaster to their organizations. Hence, leaders need to recognize the need for change, find a way to change, and then carry the change process through to completion.

Inertia is one reason why change is necessary. Harari (1995) noted that managers often recognize that change is imperative to the organization’s future yet the status quo remains. Two impediments to change are managers who tolerate mediocrity. Mediocrity can work its way through every part of the organization leading to a state of inertia. The result can mean no change within the organization or instead a burst of activity that satisfies managers' need to do something, but fails to actually change anything.

Harari (1995) wrote, “Breakthroughs begin when we as leaders accept the fact that good intentions are not enough. Let's also accept that simply pouring money into this quarter's reorganization or business fad will not yield the results we seek, either. The primary challenge before us is to confront the basic impediments to real change, which means ousting both cultures of mediocrity and obsessions with the quick fix. This demands a new type of leadership role, a new set of decision rules, and a new perspective on dealing with employees” (p. 32).

Both Black and Gregersen (2003) and Harari (1995) can be understood from the concept of contingency theory. Being able to identify the need to change and do something about and being able to combat inertia require a skilled manager who changes his approach based on ever changing circumstances. Environmental scanning is probably going to be the only way many managers have to sense an urgency for change.

Risk Taking

Successful managers usually have to take risks in the course of their careers. Almost all organizations have to take chances in order to survive at some point. As risk taking is a form of change management, it is not surprising that risk taking also is feared by many in organizations.

Ramsey (2004) wrote that managers must decide whether to choose and define their own risks or simply be victims of the random risks that that the business world presents at every turn. He argued that good managers favor being proactive by deciding for themselves when to risk, where to risk, and what to risk. Responsible risk-taking implies taking carefully calculated chances and being willing to get out of the comfort zone to accomplish worthwhile goals. Since change is inevitable, the manager must decide when the right moment is to take chances.

The role of the manager is deciding when to take risks is also evident in Tracy (2003). He wrote that managers must take the right risks for the right reasons in pursuit of the right goals. Managers who are successful in business carefully calculate every possible risk, think about what they would do should a particular situation happen, and they also have a backup plan. In addition, they minimize risk by continually questioning assumptions and asking themselves what they would do in the event of unanticipated developments. Tracy also identified five types of risk that people face and advice on how to assess risk levels.

Tracy (2003) wrote, “So why would any sensible supervisor risk risk-taking? The easy answer is they have no choice. We all know change is the unchanging condition of business leadership. And every change involves some risk. The question for managers and supervisors is whether to choose and define their own risks or simply be a passive victim of the random risks life in the business world presents at every turn” (p. 41).

People have different ways of approaching risk taking according to Hyatt (2001). Tolerance for risk appears to be a stable personality aspect that impacts everyone and their daily decision making in various ways. Low risk tolerance in a person tends to go along with worrying and pessimism. People like this tend to live very carefully. People with high risk tolerance though feel open and act freely. They seek change and novelty and like to live on the edge. Hyatt argued that since life is unpredictable everyone has to take risks anyway. No one group can be classified as risk-takers but some may be better at handling it than others.

Hyatt (2001) is a good reminder that a manager needs to be flexible when assessing situations. As people have different preferences towards risk-taking, the manager will need to keep the potential of different responses to risk-taking in mind. The contingency approach would defiantly be useful here.

Change Management Models

Once a manager accepts change, the question then becomes how to initiate the change process. How is this done? There are a variety of models that have been written that can be applied to this. As every organization is different, it is important for managers to pick the one model (or aspects of different models) which would best work for their organizations.

One of the most recent change models being advocated recently is Kotter and Cohen (2002). In their book The Heart of Change, the authors argue for an eight step approach to change. Steps include increasing urgency, building the guiding team, getting the vision right, communicating for buy-in, empowering action, creating short-term wins, not letting up, and making the changes stick.

Schafer (2004) wrote that some managers should consider creating their own change model based on their own organizations. He argued that although managers can adopt change ideas that have worked elsewhere, change is most successful when managers create their own change model through experimentation. He gave an example of this with a change model that was designed and implemented by Eagle Star Insurance. Schafer’s approach is very contingency theory based putting the impetus for designing the change model with the manager based on the manager’s judgment of the organization.

Wrote Schafer (2004), “For decades, CEOs have been looking for the holy grail of corporate transformation. Management consultants and academics have been working overtime to supply the answer. They haven't succeeded, however, because the search is a futile one. Every organization is unique. Leaders can adopt ideas that have worked elsewhere, but they need to create their own one-of-a-kind change model through experimentation, learning, blueprint creation, and, most of all, a strong focus on results” (p. 33)

Huggett (1999) wrote about the strategic management of organizational change in the face of organizational resistance. He argued that the key to achieving meaningful change in an organization is to align every thought, action, and behavior with the clearly defined and communicated vision. While not a cure-all for change resistance, it can help to ease many resisters through the process.

All three of the change model approaches require flexibility from the manager. He must have a good grasp of his organization and use this knowledge to pick the best path. Blindly following any model could get the manager in trouble but using what will work can often help lead to successful change management.

Conclusion

Change management is a large issue that will impact most organizations. It is a multi-faceted issue with many important sub aspects which include the importance of change, risk taking, and adopting change models. As contingency theory would predict, these issues require a manager to be flexible and engage in extensive environmental scanning to pick the best course of action.

References

Black, J and Gregersen, H. (2003). Leading strategic change: Breaking through the brain barrier. New York: Prentice Hall.

Harari, O. (1995). Why don't things change? Management review 84, 30-2.

Huggett, J. (1999). When culture resists change. Quality progress 32(3), 35-9

Hyatt, R. (2001). The art of healthy risk-taking. USA today 130(2676), 52-4.

Kotter, J. P. & Cohen, D. S. (2002). The heart of change: Real-life stories of how people change their organizations. Boston, MA: Harvard Business School Press.

Ramsey, R. (2004). Responsible risk-taking for supervisors. Supervision 65(1), 3-4.

Schafer, R. (2004). Build your own change model. Business horizons 47(3), 33-8

Tracy, B. (2003) Taking smart risks. National public accountant (September), 41-2.

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