OD Techniques

Major Techniques of Planned change

Planned Change

Planned organizational change is normally targeted at improving effectiveness at one or more of four different levels : human resources, functional resources, technological capabilities, and organizational capabilities.

Human Resources : Human resources are an organization’s most important asset. Ultimately, an organization’s distinctive competencies lie in the skills and abilities of its employees. Because these skills and abilities give an organization a competitive advantage, organizations must continually monitor their structures to find the most effective way of motivating and organizing human resources to acquire and use their skills. Typical kinds of change efforts directed at human resources include : (i) new investment in training and development activities so that employees acquire new skills and abilities; (ii) socializing employees into the organizational culture so that they learn the new routines on which organizational performance depends; (iii) changing organizational norms and values to motivate a multi-cultural and diverse work force; (iv) ongoing examination of the way in which promotion and reward systems operate in a diverse work force; and (v) changing the composition of the top-management team to improve organizational learning and decision making.

Functional Resources : Each organizational function needs to develop procedures that allow it to manage the particular environment it faces. As the environment changes, organizations often transfer resources to the functions where the most value can be created. Critical functions grow in importance, while those whose usefulness is declining shrink. An organization can improve the value that its functions create by changing its structure, culture, and technology. The change from a functional to a product team structure, for example, may speed the new product development process. Alterations in functional structure can help provide a setting in which people are motivated to perform. The change from traditional mass production to a manufacturing operation based on self-managed work teams often allows companies to increase product quality and productivity if employees can share in the gains from the new work system.

Technological Capabilities : Technological capabilities give an organization an enormous capacity to change itself in order to exploit market opportunities. The ability to develop a constant stream of new products or to modify existing products so that they continue to attract customers is one of an organization’s core competencies. Similarly, the ability to improve the way goods and services are produced in order to increase their quality and reliability is a crucial organizational capability. At the organizational level, an organization has to provide the context that allows it to translate its technological competencies into

value for its stakeholders. This task often involves the redesign of organizational activities. IBM, for example, has recently moved to change its organizational structure to better capitalize on its strengths in providing IT consulting. Previously, it was unable to translate its technical capabilities into commercial opportunities because its structure was not focused on consulting, but on making and selling computer hardware and software rather than providing advice.

Organizational Capabilities : Through the design of organizational structure and culture an organization can harness its human and functional resources to take advantage of  technological opportunities. Organizational change often involves changing the relationship between people and functions to increase their ability to create value. Changes in structure and culture take place at all levels of the organization and include changing the routines an individual uses to greet customers, changing work group relationships, improving integration

between divisions, and changing corporate culture by changing the topmanagement team.

These four levels at which change can take place are obviously interdependent, it is often impossible to change one without changing another. Suppose an organization invests resources and recruits a team of scientists who are experts in a new technology – for example, biotechnology. If successful, this human resource change will lead to the emergence of a new functional resource and a new technological capability. Top management will be forced to reevaluate its organizational structure and the way it integrates and coordinates its other functions, to ensure that they support its new functional resources. Effectively utilizing the new resources may require a move to a product team

structure. It may even require downsizing and the elimination of functions that are no longer central to the organization’s mission.

Change Agents

Organizations and their managers must recognize that change, in itself, is not necessarily a problem. The problem often lies in an inability to effectively manage change : not only can the adopted process be wrong, but also the conceptual framework may lack vision and understanding. Why is this the case? Possibly, and many practicing managers would concur, the problem may be traced to the managers’ growing inability to approximately develop and

reinforce their role and purpose within complex, dynamic and challenging organizations. Change is now a way of life; organizations, and more importantly their managers, must recognize the need to adopt strategic approaches when facing transformation situations. Throughout the 1980s and 1990s organizations, both national and international, strived to develop sustainable advantage in both volatile and competitive operating environments. Those that have survived, and/or developed, have often found that the creative and market driven management of their human resources can produce the much needed competitive

‘cushion’.

This is not surprising : people manage change, and well-managed people manage change more effectively. Managing change is a multi-disciplinary activity. Those responsible, whatever their designation, must possess or have access to a wide range of skills, resources, support and knowledge. For example

1.    Communication skills are essential and must be applied for managing teams.

2.    Maintaining motivation and providing leadership to all concerned is necessary.

3.    The ability to facilitate and orchestrate group and individual activities is crucial.

4.    Negotiation and influencing skills are invaluable.

5.    It is essential that both planning and control procedures are employed.

6.    The ability to manage on all planes, upward, downword and within the peer group, must be acquired.

7.    Knowledge of, and the facility to influence, the rationale for change is essential.

There are many terms that have been used to denote those responsible for the effective implementation of change : for example, change agents, problem owners, facilitators, project managers or masters of change. The focal point of a change needs not to be an individual; a work group could quite easily be designated as a special task force responsible for managing the change. However, generally within, or above, any work group there is still someone who ultimately is accountable and responsible. What are the essential attributes of a change agent/master and are there any guidelines for them? The need to encourage participation and involvement in the management of the change by those who are to be affected has been suggested. The aim is to stimulate interest and commitment and minimize fears, thus reducing opposition. It may also be necessary to provide facilitating and support services. These could assist in promoting an individual’s awareness for the need for

change, while counseling and therapy could be offered to help overcome fears. Management must engage in a process of negotiation, striving towards agreement. This is essential where those opposing have the power, and influence, to resist and ultimately block the change. If consensus fails then one has little alternative but to move on to explicit and implicit coercion.

Somewhere in between the two extremes, the management may attempt to manipulate events in an effort to sidestep sources of resistance. For example, they may play interested parties off against each other or create galvanizing crisis to divert attention. The techniques need not be employed in isolation. They may be most effective when utilized in combination. The core tasks facing a change agent or project manager are to reduce the uncertainty associated with the change situation and then encourage positive action. Some of the steps to assist are :

1. Identify and manage stakeholders (Gainsvisible commitment).

2. Work on objectives (Clear, concise and understandable)

3. Set a full agenda (Take a hostile view and highlight potential difficulties)

4. Build appropriate control systems (Communication is a two-way process, feedback is required).

5. Plan the process of change (Pay attention to : establishing roles – clarity of purpose; build a team –

do not leave it to choice; nurture coalitions of support – fight apathy and   resistance; communicate relentlessly – manage the process;

recognize power – make the best use of supporting power bases;

handing over – ensure that the change is maintained).

The change agents exist throughout the organization (but are crucial at the top)

and constitute in effect a latent force. They have ability to :

Question the past and challenge old assumptions and beliefs

• Leap from operational and process issues to the strategic picture

• Think creativity and avoid becoming bogged down in the ‘how-to’

• Manipulate and exploit triggers for change Further, some of the traits of change agents as business athletes are :

1. able to work independently without the power and sanction of the management hierarchy.

2. effective collaborators, able to compete in the ways that enhance rather than destroy cooperation.

3. able to develop high trust relations with high ethical standards.

4. possess self-confidence tempered with humility.

5. respectful of the process of change as well as the substance.

6. able to work across business functions and units – ‘multi-faceted and multi-dextrous’.

7. willing to take rewards on results and gain satisfaction from success.

To summarize, an effective change agent must be capable of orchestrating events; socializing within the network of stakeholders; and managing the communication process. There is a need for competent internal change agents to be assigned to the project so as to ensure cooperation, effective implementation and successful handover upon completion. The role envisaged for the external change agent includes : to assist in fully defining the problem; to help in determining the cause and suggesting potential solutions; to stimulate

debate and broaden the horizons; and to encourage the client to learn from the experience and be ready to handle future situations internally; is complementary to that of the internal problem owner. It is the responsibility of the potential clients to establish the need for an objective outsider, by considering their own internal competencies and awareness of the external opportunities. The principal problem with using internal change agents is that other

members of the organization may perceive them as being politically involved in the changes and biased toward certain groups. External change agents, in contrast, are likely to be perceived as less influenced by internal polities. Another reason for employing external change agents is that as outsiders they have a detached view of the organization’s problems and can distinguish between the “forest and the trees”. Insiders can be so involved in what is going on that they cannot see the true source of the problems. Management consultants

for Mckinsey and Co. are frequently brought in by large organizations to help the top-management team diagnose an organization’s problems and suggest solutions. Many consultants specialize in certain types of organizational change, such as restructuring, re-engineering or implementing total quality management.

Unplanned Change

Not all the forces for change are the results of strategic planning. Indeed organizations often are responsive to changes that are unplanned – especially those derived from the factors internal to the organization. Two such forces are the changes in the demographic composition of the workforce and performance gaps.

1. Changing Employee Demographics : It is easy to see, even within our own lifetimes, how the composition of the workforce has changed. The percentage of women in the workforce is greater than ever before. More and more women with professional qualifications are joining the organization at the junior and the middle management levels. In addition to these, the workforce is getting older. Many of the old retired employees from government and public sector are joining the private sector, thereby changing the employee demographics. With the opening up of the economy and globalization, the workforce is also continually becoming more diverse.

To people concerned with the long-term operation of organizations, these are not simply curious sociological trends, but shifting conditions will force organizations to change. Questions regarding the number of people who will be working, what skills and attitudes they will bring to the job, and what new influences they will bring to the workplace are of

key interest to human resource managers.

2.Performance Gaps : If you have ever head the phrase, “It is isn’t broken, don’t fix it,” you already have a good idea of one of the potent sources of unplanned internal changes in organizations – performance gaps. A product line that isn’t moving, a vanishing profit margin, a level of sales that is not up to corporate expectations – these are examples of gaps between real and expected levels of organizational performance. Few things force change more than sudden unexpected information about poor performance. Organizations usually stay with a winning course of action and change in response to failure; in other words, they

follow a win-stay/lose-change rule. Indeed several studies have shown that a performance gap is one of the key factors providing an impetus for organizational innovations. Those organizations that are best prepared to mobilize change in response to expected downturns are expected to be the ones that succeed. Further, one of the greatest challenges faced by an organization is its ability to respond to changes from outside, something over which it has little or no control. As the environment changes, organizations must follow the suit.

Research has shown that organizations that can best adapt to changing conditions tend to survive. Two of the most important unplanned external factors are governmental regulation and economic competition.

3. Government Regulation : One of the most commonly witnessed unplanned organizational changes results from government regulation. With the opening up of the economy and various laws passed by the government about delicensing, full or partial convertibility of the currency, etc., the ways in which the organizations need to operate

change swiftly. These activities greatly influence the way business is to be conducted in organizations. With more foreign players in the competitive market, Indian industries have to find ways and mechanisms to safely and profitably run their business.

4.Economic Competition in the Global Arena : It happens every day : someone builds a better mousetrap – or at least a chapter one. As a result, companies must often fight to maintain their share of market, advertise more effectively, and produce products more inexpensively. This kind of economic competition not only forces organizations to change, but also demands that they change effectively if they are to survive. On some occasions, competition can become so fierce that the parties involved would actually be more effective if they buried the hatchet and joined forces. It was this ‘If you can’t beat them, join them’ reasoning that was responsible for the announced alliance dubbed “the deal of the decade” by one financial analyst. Although competition has always been crucial to organizational success, today competition comes from around the globe. As it has become increasingly

less expensive to transport materials throughout the world, the industrialized nations have found themselves competing with each other for shares of the international marketplace. Extensive globalization presents a formidable challenge to all organizations wishing to compete in the world economy. The primary challenge is to meet the ever-present need for change i.e., to be innovative. It can be stated that organizations change in many ways and for many reasons. The norm of pervasive change brings problems, challenges and

opportunities. Those individual managers and organizations that recognize the inevitability of change and learn to innovate or adapt to and manage it while focused on creating world class best value will be most successful. But people and organizations frequently resist change, even if it is in their best interest, especially in large and established organizations.