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spike bulletOctober, 1998 - Leading Change

Leading Change - Tips for Executives
Steps to Organizational Change
Organizational Roles of Change Teams
Resources - Books, Internet

spike bulletLeading Change

Many organizations, large and small, are undergoing changes in order to keep pace with our changing world.  In previous articles, we have discussed managing change.   In this article, we'd like to talk about how to effectively lead change from an executive viewpoint.

Case Study: The methods described here are being used as a structure for working with a client of ours.  One significant organizational impact for this client is the ability to improve cash management processes, which coincides with the planned implementation of a new computer system for all offices across the country. 

Steps to Organizational Change

  1. Set Goals for the Change
  2. Define the New Structure
  3. Define Requirements for the New Structure (what will change, how it will change)
  4. Identify Benefits, Challenges and Opportunities
  5. Communicate Changes
  6. Support the Process of Change
  7. Implement, Review and Refine Changes

Step 1: Set Goals — What are we trying to achieve by this change?

The first steps in any change project sound simple: Start at the Beginning.  The beginning of any change project should always be establishing the overall goals of the project - answering the question, "What are we trying to achieve?"

Some of the most common goals for organizational change are:

  • Higher Productivity of Staff
  • Increased Efficiency of Processes (Reduction in Paperwork, Elimination of Delays in Recording Results, Moving Information Faster, Elimination of Redundant Manual Processing)
  • Increased Profits / Lower Costs
  • Better, Faster Information for Management
  • Better Management of Resources (Cash, Materials, Supplies, Information, People, Marketing, Sales, Results, whatever)
  • Better Tracking of Resources (Cash, Materials, Supplies, Information, People, Marketing, Sales, Results, whatever)
  • Improved Audit Ability (Cash, Materials, Supplies, Information, People, Marketing, Sales, Results, whatever)
  • Improved Responsibility of Staff (Accountability, Self-Sufficiency, Empowerment in Decision-making)

Many change processes identify some of the above goals.  Occasionally, the only stated goal is lowering costs (translated to the real world, this means "layoffs").   For our client example, all of the above are stated goals, EXCEPT increased profits and lower costs. They do not expect either increased profits or lower costs to result from these changes; nor do they expect any change in the number of employees.  They do realize that some people in certain positions may not be interested or prepared to meet the challenges of the new organization, so  planning will include other options for those people. 

Step 2: The New Organization — What will it look like when we finish?

Some planning for the new organizational structure must be done soon after the overall goals are confirmed.  A new Organization Chart should be drawn, showing specific reporting hierarchy in the new structure.

Specific descriptions of each job category that is affected should be done, with their new ditties, reporting relationships, experience requirements, etc.  Most large organizations will rewrite or revise job descriptions.  Entrepreneurial or creative organizations may simply make a list of the new requirements for existing or new job categories.

When financial systems are involved, the impact on cash, finance and audit requirements should be considered.  Will an individual's financial tasks remain the same and only the reporting relationships change?  Will new audit rules need to be developed along with changed duties and responsibilities? 

Step 3: Requirements for the New Structure — What Skills/Experience are needed? Compare the Old and the New

Identify the skills and experience that will be needed in the new organization.   How many of each type of person or job title/category will be needed in the new structure

Identify the differences between current reporting relationships and those proposed in the new structure.  Identify the specific skills and experience that must be present in the future jobs as compared to the current jobs.  Also, look at specified people who fill the positions in the current organization compared to the needs in the new structure.

In many cases, there will be some people who can move into the new requirements without hesitation.  Usually, there are also a group of people who can move into the new structure with some additional training.  And, there are usually a number of people who probably not be able to move easily into the new structure.

Additional questions that must be answers:  Will job titles change?  Will compensation change?  What training is needed to help people move into new duties?   Do new people need to be recruited?  What opportunities must be created to transition people to different jobs if they are not prepared to move into the new skills required in the new organization?  These questions must be answered for staff positions and line manager positions. 

Step 4: Identify Benefits, Challenges and Opportunities

Identify Positive Benefits — How do we motivate people to accomplish desired changes?

Changes imposed on people create resistance, particularly when they perceive they have no active involvement in the change.  Executive management often fails to realize (or to remember) how traumatic changes can seem to rank and file employees.  To help minimize resistance, leaders of change must clearly identify the positive benefits of a new organization — for the organization as a whole and for those individuals who will be personally affected by the changes.

In our client case study, there are a number of incentives for people in the new structure.  They will have more training opportunities, more travel opportunities, more active involvement and recognition within the company, greater opportunities for career advancement, an expense account (for the first time), the opportunity to manage people and salary incentives for those who have (or develop) the new skills needed.

Identify Challenges and Opportunities — How do we handle people who can't/won't change?

In addition to the positive aspects of a new structure, possible negative impacts must be identified and contingency plans must be developed early in the change process.   Usually, there are some people who cannot or will not be able to move into new job roles.  The sooner those people are identified the better.  If training is needed, define the types of training required and be prepared to announce those with the announcement of the new changes.  If some people clearly can't make the change, be prepared to work with them individually to find other positions within the company that are right for their skills. 

In our client case study, no personnel reductions are expected or planned, so that will also be announced as part of the new structure.  The amount of fear present in most organizations is evident when changes are announced.  To avoid this fear becoming a destructive force, great care must be taken in the timing of change announcements and in the sincerity of management in keeping commitments not to do layoffs.  If they are to be believed, the message must be loud and clear.  In addition, management must have the long-term trust of employees and must continue to express their deep appreciation of the value of employees to the overall functioning of the company as well as to the future of the company. Even then, some employees will be fearful.  This aspect of change must be recognized and dealt with in advance if possible, or through contingency planning for unanticipated resistance.

Identify Personnel Issues — What changes will occur in working hours, benefits, etc.?

Will there be changes in reporting structures?  Define exactly what those will be and create new organization charts.  Where there will be no change, be sure to explain what will not change.

Will there be changes in hours works or schedules?  Define exactly what those will changes will be or what will not change.

Will there be changes in working location or physical office changes with the new organizational structure?  If so, be sure to explain the changes or identify what will not change.

Will there be changes in compensation?  Identify any changes in benefits, bonus programs, incentive programs, job classification, base salary rates, overtime rate or amount, promotional opportunities, etc.

Identify Schedules for the Change and Measurement Criteria

Part of an organizational structure change requires building an implementation schedule and methods for measuring progress toward the eventual goals.  Periodic milestones should be developed as part of the overall project plan.  Methods for determining the success of the change should be identified in the early stages of planning. 

If the change involves productivity improvements, some key productivity indicators should be identified.  For example, if increased plant production is a goal, measures of current production should be available so they can be compared to production after implementation of the organizational changes.

Step 5: Communicate the Changes — What do people need to know?

How the new organization is communicated goes a long way toward creating trust or destroying trust.  Executives who are well prepared and sincere about their desire for positive change will communicate their enthusiasm as well as their concerns.   Communicating awareness of the possible challenges also helps reduce staff fears about impending changes.

For the smoothest change, those driving the change must be fully supportive of the resources required to implement the change.  They cannot simply give orders and expect things to change magically — they must be actively and continuously involved in helping the change occur.  Face-to-face communication is the most effective — from executive to line management, from line managers to their staff, supported by continuing communication as the change process unfolds.

Step 6: Supporting the Change Process — How can we help make the change happen?

Many different people are involved in a planned organizational change.  While each role is uniquely important, they may be filled by the same individual serving in multiple roles at different times.  Key people within the organization or competent outsiders brought in expressly to help facilitate the change can be critical to the overall success.   Individual employees and staff members are as important as executives and managers in making the change happen, since it is the staff that must embrace and implement any change. 

Key Change Roles

Some key roles we have identified are:

  • Change Drivers: the executive who is leading the change and the team that is rolling out the change.  People in this role must be actively involved from the beginning to the end of the change, not just standing on the sidelines.  Their actions as well as their words must be consistent with the goals of the change.
  • Change Facilitators:  people who actively work with the process of change, either in planning the changes or in implementing them.  These are often consultants, working very closely with staff members who help the change occur.  
  • Change Advocates: people who speak on behalf of people affected by the change.  These people must understand the nature of the change, help support those who may resist at first and help minimize any long-term resistance. Change Advocates help motivate and inspire people to actively participate in the changes.
  • Change Inhibitors: people who resist changes.  In any organizational change, there will be people who resist progress for a variety of reasons.   This resistance must be recognized and dealt with.  Change Inhibitors also help slow down change that may be moving too fast.  Effective change efforts will seek to learn the nature of the Change Inhibitor's viewpoint and use their insights to help keep the change balanced.  Too many inhibitors will slow progress to a crawl or stop it altogether.  
  • Change Counselors: people who listen to individual concerns, provide support and realistic evaluation of individual methods for coping with change.   People in this position should be as neutral as possible, not pushing people to move too fast nor encouraging them to resist too strongly. 
  • Change Communicators: people who talk about the changes, make presentations, write new procedures and help explain the nature of the change to a variety of organizational levels.  Key executives are obviously part of the communication process, as is anyone in the organization who can communicate effectively.
  • Change Implementers: these are the people who actually accomplish the tasks involved in the change.  They cover the entire range of the organization affected by a change.

All the roles identified must work together as a team to implement change successfully.  And, all of these roles working together are critical to a success large-scale project.  

Step 7: Implement, Review and Refine Changes — What is left to do?

When the changes go into effect, the project is not yet complete.  The change must be monitored to make sure that the process is running smoothly.  In major organizational changes, the implementation may occur over a period of months or even years before it is complete.

During the implementation and refinement period, members of the change team must be paying attention to performance measures established during the initial project planning stage of the project.   Since changes may take a while to become fully implemented, measurements should be taken periodically and communicated to everyone involved.  Seeing positive results helps motivate people to continue active participation and shows that management recognizes and acknowledges their contributions to the success of the change.

Major efforts should be acknowledged with rewards of some kind.  Many large-scale projects hold parties or banquets to present awards to members of the team that accomplished a successful venture.  Smaller projects may celebrate with a lunch or dinner with team members.  Sometimes, recognition comes through a raise, promotion or bonus. 

Regardless of the type of acknowledgement, there should be some ceremonial recognition of individual efforts to help solidify the change.

At some time following the implementation of an organizational change, a review session should be held with key members of the change team to review Lessons Learned.  This review should include documentation of what went according to plan, what could have been done  differently, what people learned from the experience and what insights can be used for future efforts.

book graphic Books

  • A Passion for Excellence: The Leadership Difference, Tom Peters and Nancy Austin, Random House, New York, Original 1985 (a classic); Warner Books; Reissue edition (January 1989) ISBN: 0446386391 
  • Break­Away Thinking: How to Challenge Your Business Assumptions (and why you should), Ian Mitroff, (Pogo: "we have met the enemy, and he is us") John Wiley & Sons; (June 1988) ASIN: 0471602027
  • Female Advantage: Women's Ways of Leadership. Sally Helgesen. Currency/Doubleday; (May 1995) ISBN: 0385419112
  • In Search of Excellence, Tom Peters and Robert Waterman Warner Books; Reissue edition (August 1988) ISBN: 0446385077
  • Intrapreneuring, Gifford Pinchot, Berrett-Koehler Publishing; 2nd edition ASIN: 1576750825 (how to be a entrepreneur in a corporate environment)
  • Leaders: The Strategies for Taking Charge, Warren Bennis, HarperBusiness; 2nd edition (February 1997) ISBN: 0887308392  (one of the best books on leadership)
  • Making a Difference: Twelve Qualities That Make You a Leader, Sheila Bethel.  Berkley Publishing  Group; Reprint edition (October 1990)  ISBN: 042512309X   (for those who need step­by­step definitions)
  • Managing Organizational Change, Cynthia Scott and Dennis Jaffee, Crisp Publications, Menlo Park, California, 1989 (one of the "50-minute series" books - an excellent guide for anyone involved with change)
  • Mind of a Manager, Soul of a Leader; Craig Hickman, John Wiley & Sons Inc., New York, 1990 (how to balance management with leadership and come to integration of their seeming opposites) ISBN: 0471569348
  • Teaching the Elephant to Dance: Empowering Change in Your Organization, James Belasco.  Plume; Reissue edition (July 1991) ISBN: 0452266297
  • The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change. Stephen R. Covey. Fireside Books, Simon & Schuster; New York NY 1990 ISBN: 0671708635
  • The Addictive Organization, Anne Wilson Schaef.  Harper SanFrancisco; (September 1990) ISBN: 0062548743 (everyone in a corporation should read this one ­ most enlightening !)
  • The Leadership Challenge: How to Get Extraordinary Things Done in Organizations, James Kouzes, Barry Posner.  Jossey-Bass; (May 1990) ASIN: 155542211X   (excellent and practical ways to improve our ability to work with people) 
  • The Tao of Leadership, John Heider, Humanics Pub Group; (April 1986) ISBN: 0893340790  ( wonderful short insights)
  • The Tao of Management, Bob Messing, Humanics Limited, Atlantic GA, 1989 (wonderful short insights and words to ponder) ISBN: 0893341118
  • Thriving on Chaos: Handbook for a Management Revolution, Tom Peters.  HarperCollins (paper); Reprint edition (September 1991) ISBN: 0060971843   (the great one continues his effort to help us make sense of the business world)
  • Turf and Other Corporate Power Plays, Pamela Cuming (a fictional story about Larry's career progression from MBA graduate to CEO over 20 years; gives excellent examples of corporate power and politics at work.  This is an excellent book, now out of print but available in libraries or used). Simon & Schuster; (January 1986) ASIN: 0139331026

World Wide Web graphic Internet Resources

spike bulletAdditional Resources on this topic.

See our Online Newsletter Contents for other articles dealing with managing change, and for links to other websites dealing with this topic.

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Page updated: June 06, 2009     

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