Organizational Change: A business imperative


Human Intelligent (HI) Workplace
Helping Leaders Help Themselves

May 22, 2015

You must be the change you wish to see in the world.

Mahatma Gandhi

 Organizational Change

In the midst of all of the ongoing trends and changes, organizations find themselves having to continue to adapt, evolve, and reinvent themselves in order to position themselves to a more competitive posture. Due to this organizational change is increasing and speeding up simultaneously. The concern or issue that organizations need to keep in mind is that some research indicates that employees are usually productive a little over 60% of their workday while during organizational change this productivity can potentially drop down to 15%.

Another way to look at this is that it has been estimated that in a typical 8-hour workday, an employee is usually productive close to 5 hours and the other hours covered in social and personal issues. When organizational change occurs productivity drops down to less then two hours with the rest of the day being taken up by speculation and gossip, concern for themselves, and trying to figure out how the organization will successfully implement the changes.

How well organizations manage their changes is not always something to brag about. It is estimated that 90% of all companies fail to execute strategy successfully, 60% to 70% of technology insertions are ineffective, $75 billion spent annually on failed IT projects with poor management as the culprit, and 8 of the 10 largest mergers over the last 10 years failed; destroying $789 billion in shareholder wealth.

Organizations will continue to learn how to adapt and change or face an Extinction Event as cited in the Code Halos. To highlight this point just keep in mind that today only 70 of the Fortune 500 that appeared in 1955 still exist, nearly 2000 companies have come and gone since then, and corporate life expectancy was 75 years and now its less then 15 and declining.

All of this is up against the backdrop that change management effectiveness has remained steady at only 30% from 1995-2010. Much has been written about the need to change behaviors in order to instill a winning culture. But what will it really take?

Leaders need to remember that for organizations to change there needs to be effective leadership committed to guiding and supporting the change with a clear and shared vision of the future. In addition the organization needs to ensure they are equipping the workforce with the appropriate skills need in the changing organization along with a clear incentive as to the rationale for the change. People want to know “what’s in it for me”, the famous FM station that we all tune into when asked to commit to something or known as WIIFM. Last the employees will need the resources in order to be successful with a clear action plan as to how they will achieve the organizational changes.

While there are many that resist change, there is at least one if not all three reasons why someone might be resisting a change. The first is that they just do not understand the change. And here it is the role of the leader to ensure the individual or individuals understands the rationale for the change. The second reason is that the individual or individuals might just not like the change. Here they do just not see the value of the change or agree with it. The last reason is that they may just not like who is driving the change. Here we’re really talking about trusting the individual trying to make the organizational changes.

When a manager establishes a culture of “my way or the highway” this minimizes genuine buy-in to the change and in turn the organization gains passive-aggressive behavior or just resistance to the change. And there has been much written about the culture needed in order to implement an organizational change or strategic effort.

This reminds me of an article I recently read on an interview with the CEO of Starbucks who when asked what they he attribute his organizational success he stated “The secret sauce to our success is the culture and values of our company”. This was previously mentioned by former Southwest CEO, Herb Kelleher who stated “everything (in our strategy) our competitors could copy tomorrow. But they can’t copy the culture – they know it.”

This just reinforces the point that these organizational changes make leadership development that more of an imperative so that leaders are equipped to guide their organizations and workforce through what could be potentially difficult times. And while this might provide a challenge it also provides for an opportunity.

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