History of Change Management

The philosophies inherent in today’s change management practices are structured to plan (rather than react) to the challenge of organizational change. It’s a growing industry with thousands of books and numerous theoretical management frameworks that address both the necessity and the pain involved in managing and planning for change.

The concept of change management dates back to the early to mid-1900s. Kurt Lewin’s 3-step model for change was developed in the 1940s; Everett Rogers’ book Diffusion of Innovations was published in 1962, and Bridges’ Transition Model was developed in 1979. However, it wasn’t until the 1990s that change management became well known in the business environment, and formal organizational processes became available in the 2000s.  

There are concrete reasons for accelerated growth in the change management industry. Products, technology, or ideas that used to take years to design, develop, test, and deploy are now being squeezed down to months or even weeks. The evolving consumer expectations for better, faster, and cheaper products also drive the need to reorganize the work culture to meet demand. Books touting these concepts run from the obvious, such as Change the Culture, Change the Game by Roger Connors and Tom Smith, to Alan Deutschman’s dire call to action in Change or Die, Linda Ackerman Anderson’s Beyond Change Management, and Daryl Conner’s Managing at the Speed of Change. In addition, models and certifications from The Association of Change Management Professionals have come to life in support of this growing industry.

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Understanding Change Management Terminology

Change Management has evolved over the past several years with Change Management Models, Processes, and Plans developed to help ease the impact change can have on organizations. So, what is a Change Management Model, a Change Management Process, and a Change Management Plan and how do they differ?  

• Change Management Models have been developed based on research and experience on how to best manage change within an organization or in your personal life. Most Change Management Models provide a supporting process that can apply to your organization or personal growth. 
• Change Management Processes include a sequence of steps or activities that move a change from inception to delivery.
• Change Management Plans are developed to support a project to deliver a change. It is typically created during the planning stage of a Change Management Process.

 
Here is a great resource for an overview of effective change models, methodologies, and frameworks. You’ll find theories such as the McKinsey’s change management framework, John Kotter’s change management model, the Prosci ADKAR process, and the Deming Cycle. 

Kotter’s Chanfe Model

ADKAR Model

Deming Cycle

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8 Essential Steps for an Effective Change Management Process

Your organization is constantly experiencing change. Whether caused by new technology implementations, process updates, compliance initiatives, reorganization, or customer service improvements, change is constant and necessary for growth and profitability. A consistent change management process will aid in minimizing the impact it has on your organization and staff. 

Below you will find 8 essential steps to ensure your change initiative is successful.

1. Identify What Will Be Improved
 
Since most change occurs to improve a process, a product, or an outcome, it is critical to identify the focus and to clarify goals. This also involves identifying the resources and individuals that will facilitate the process and lead the endeavor. Most change systems acknowledge that knowing what to improve creates a solid foundation for clarity, ease, and successful implementation.
 
 
2. Present a Solid Business Case to Stakeholders
 
There are several layers of stakeholders that include upper management who both direct and finance the endeavor, champions of the process, and those who are directly charged with instituting the new normal. All have different expectations and experiences and there must be a high level of “buy-in” from across the spectrum. The process of onboarding the different constituents varies with each change framework, but all provide plans that call for the time, patience, and communication.
 
 
3 .Plan for the Change
 
This is the “roadmap” that identifies the beginning, the route to be taken, and the destination. You will also integrate resources to be leveraged, the scope or objective, and costs into the plan. A critical element of planning is providing a multi-step process rather than sudden, unplanned “sweeping” changes. This involves outlining the project with clear steps with measurable targets, incentives, measurements, and analysis. For example, a well-planed and controlled change management process for IT services will dramatically reduce the impact of IT infrastructure changes on the business. There is also a universal caution to practice patience throughout this process and avoid shortcuts.
 
4. Provide Resources and Use Data for Evaluation
 
As part of the planning process, resource identification and funding are crucial elements. These can include infrastructure, equipment, and software systems. Also consider the tools needed for re-education, retraining, and rethinking priorities and practices. Many models identify data gathering and analysis as an underutilized element. The clarity of clear reporting on progress allows for better communication, proper and timely distribution of incentives, and measuring successes and milestones.
 
5. Communication
 
This is the “golden thread” that runs through the entire practice of change management. Identifying, planning, onboarding, and executing a good change management plan is dependent on good communication. There are psychological and sociological realities inherent in group cultures. Those already involved have established skill sets, knowledge, and experiences. But they also have pecking orders, territory, and corporate customs that need to be addressed. Providing clear and open lines of communication throughout the process is a critical element in all change modalities. The methods advocate transparency and two-way communication structures that provide avenues to vent frustrations, applaud what is working, and seamlessly change what doesn’t work.
 
6. Monitor and Manage Resistance, Dependencies, and Budgeting Risks
Resistance is a very normal part of change management, but it can threaten the success of a project. Most resistance occurs due to a fear of the unknown. It also occurs because there is a fair amount of risk associated with change – the risk of impacting dependencies, return on investment risks, and risks associated with allocating budget to something new. Anticipating and preparing for resistance by arming leadership with tools to manage it will aid in a smooth change lifecycle.
 
7. Celebrate Success
 
Recognizing milestone achievements is an essential part of any project. When managing a change through its lifecycle, it’s important to recognize the success of teams and individuals involved. This will help in the adoption of both your change management process as well as adoption of the change itself.
 
8. Review, Revise and Continuously Improve
 
As much as change is difficult and even painful, it is also an ongoing process. Even change management strategies are commonly adjusted throughout a project. Like communication, this should be woven through all steps to identify and remove roadblocks. And, like the need for resources and data, this process is only as good as the commitment to measurement and analysis.

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Common Challenges of Change Management

Due to ever-changing consumer expectations and the competition in the global economy, the science of organizational change is itself constantly changing and evolving. The human element of change management may be one of the most difficult to navigate because people do not inherently like change or adjust to it well. 

Most change methods agree that change is difficult and cumbersome. Therefore, involving people early on, implementing process, and continuously adjusting for improvement is critical to success. This includes thorough planning, buy-in, process, resources, communication, and constant evaluation.

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Supporting Tools and Components for Implementing Change Management Processes

Effective change management processes rely on supporting activities and tools. These tools are often developed and managed internally by either the change management team or stakeholders of the change management process. For example, a product roadmap may be developed by the product management team, while a post mortem review would involve everyone responsible for and impacted by the change. These may include:

• Product or Business Roadmaps
• Readiness Assessments
• Training Tutorials and Education Sessions
• Stakeholder Feedback Forums
• Post Mortem Review
• Measurements and Analytics
• Resistance Management
• Continuous Improvement Plan
• Business Case

Today, there are numerous proven methodologies. Some models focus on changing the individual as a method of cultural change and some have structures and frameworks to move an entire organization towards focused change and improvement. There is no one “right” solution, but with research, exploration, and resource planning, a change management strategy is possible regardless of organization size or need. If the explosive growth in the change management industry is any indication, the business of change is here to stay.

Change management is a systematic approach to dealing with the transition or transformation of an organization’s goals, processes or technologies. The purpose of change management is to implement strategies for effecting change, controlling change and helping people to adapt to change. Such strategies include having a structured procedure for requesting a change, as well as mechanisms for responding to requests and following them up.CONTENT

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To be effective, the change management process must take into consideration how an adjustment or replacement will impact processes, systems, and employees within the organization. There must be a process for planning and testing change, a process for communicating change, a process for scheduling and implementing change, a process for documenting change and a process for evaluating its effects. Documentation is a critical component of change management, not only to maintain an audit trail should a rollback become necessary but also to ensure compliance with internal and external controls, including regulatory compliance.

Types of organizational change

Change management can be used to manage many types of organizational change. The three most common types are:

1. Developmental change – Any organizational change that improves on previously established processes and procedures.
2. Transitional change – Change that moves an organization away from its current state to a new state in order to solve a problem, such as mergers and acquisitions and automation.
3. Transformational change – Change that radically and fundamentally alters the culture and operation of an organization. In transformational change, the end result may not be known. For example, a company may pursue entirely different products or markets.

Importance and effects of change management

As a conceptual business framework for people, processes and the organization, change management increases the success of critical projects and initiatives and improves a company’s ability to adapt quickly.

Business change is constant and inevitable, and when poorly managed has the potential to cause organizational stress as well as unnecessary, and costly re-work.

By standardizing the consistency and efficiency of assigned work, change management assures that the people asset of an organization is not overlooked. As changes to work occur, change management helps employees to understand their new roles and build a more process-driven culture.

Change management also encourages future company growth by allowing it to remain dynamic in the marketplace.

Popular models for managing change

Best practice models can provide guiding principles and help managers align the scope of proposed changes with available digital and nondigital tools. Popular models include:

• ADKAR: The ADKAR model, created by Prosci founder Jeff Hiatt, consists of five sequential steps:
  • Awareness of the need for change;
  • Desire to participate in and support the change;
  • Knowledge about how to change;
  • Ability to implement change and behaviors; and
  • Reinforcement to sustain the change.
• Bridges’ Transition Model: Change consultant William Bridges’ model focuses on how people adjust to change. The model features three stages: a stage for letting go, a stage of uncertainty and confusion and a stage for acceptance. Bridges’ model is sometimes compared to the Kübler-Ross five stages of grief (denial, anger, bargaining, depression and acceptance).
• IT Infrastructure Library (ITIL): The U.K. Cabinet Office and Capita plc oversee a framework that includes detailed guidance for managing change in IT operations and infrastructure.
• Kotter’s 8-Step Process for Leading Change: Harvard University professor John Kotter‘s model has eight steps:
  • increasing the urgency for change;
  • creating a powerful coalition for change;
  • creating a vision for change, communicating the vision;
  • removing obstacles;
  • creating short-term wins;
  • building on them; and
  • anchoring the change in corporate culture.
• Lewin’s Change Management Model: Psychologist Kurt Lewin created a three-step framework that is also referred to as the Unfreeze-Change-Freeze (or Refreeze) model.
• McKinsey 7S: Business consultants Robert H. Waterman Jr. and Tom Peters designed this model to holistically look at seven factors that affect change:
  • shared values;
  • strategy;
  • structure;
  • systems;
  • style;
  • staff; and

Popular change management tools

Digital and nondigital change management tools can help change management officers research, analyze, organize and implement changes. In a small company, the tools may simply consist of spreadsheets, Gantt charts and flowcharts. Larger organizations typically use software suites to maintain change logs digitally and provide stakeholders with an integrated, holistic view of change and its effects.

Popular change management software applications include:

• ChangeGear Change Manager (SunView Software): change management support for DevOpsand ITIL automation, as well as business roles.
• ChangeScout (Deloitte): cloud-based organizational change management application for evaluating sea changes, as well as incremental changes.
• eChangeManager (Giva): a cloud-based, stand-alone IT change management application.
• Freshservice (Freshworks): an online ITIL change management solution featuring workflow customization capabilities and gamification features.
• Remedy Change Management 9 (BMC Software): assistance for managers with planning, tracking and delivering successful changes that are compliant with ITIL and COBIT.

Change management certifications

Change management practitioners can earn certifications that recognize their ability to manage projects, manage people and guide an organization through a period of transition or transformation. Popular certifications for change management are issued by:

• Change Management Institute (CMI): CMI offers Foundation, Specialist and Master certifications.
• Prosci: The Change Management Certification validates the recipient is able to apply holistic change management methodologies and the ADKAR model to a project.
• Association of Change Management Professionals (ACMP): ACMP offers a Certified Change Management Professional (CCMP) certification for best practices in change management.
• Management and Strategy Institute (MSI): The Change Management Specialist (CMS) certification attests to the recipient’s ability to design and manage change programs.
• Cornell University’s SC Johnson College of Business: The Change Leadership certification program was developed to authenticate a change agent’sability to carry out a change initiative. The certification requires four core courses and two leadership electives.

How change management works

To understand how change management works, it’s best to apply the concepts and tools to a specific area of business. Below, are examples of how change management works for project management, software development and IT infrastructure.

Change management for project management

Change management is an important part of project management. The project manager must examine change requests and determine the effect a change will have on the project as a whole. The person or team in charge of change control must evaluate the effect a change in one area of the project can have on other areas, including:

• Scope: Change requests must be evaluated to determine how they will affect the project scope.
• Schedule: Change requests must be assessed to determine how they will alter the project schedule.
• Costs: Change requests must be evaluated to determine how they will affect project costs. Labor is typically the largest expense on a project, so overages on completing project tasks can quickly drive changes to the project costs.
• Quality: Change requests must be evaluated to determine how they will affect the quality of the completed project. Changes to the project schedule, in particular, can affect quality as the workforce may generate defects in work that is rushed.
• Human resources: Change requests must be evaluated to determine if additional or specialized labor is required. When the project schedule changes, the project manager may lose key resources to other assignments.
• Communications: Approved change requests must be communicated to the appropriate stakeholders at the appropriate time.
• Risk: Change requests must be evaluated to determine what risks they pose. Even minor changes can have a domino effect on the project and introduce logistical, financial or security risks.
• Procurement: Changes to the project may affect procurement efforts for materials and contract labor.
• Stakeholders: Changes to the project can affect who is a stakeholder, in addition to the stakeholders’ synergy, excitement and support of the project.

When an incremental change has been approved, the project manager will document the change in one of four standard change control systems to ensure all thoughts and insight have been captured with the change request. (Changes that are not entered through a control system are labeled defects.) When a change request is declined, this is also documented and kept as part of the project archives.

Change management for software development

In software project management, change management strategies and tools help developers manage changes to code and its associated documentation. Agile software development environments actually encourage changes for requirements and/or the user interface (UI). Change is not addressed in the middle of an iteration, however; they are scheduled as stories or features for future iterations.Handling change management for digital transformation projectsWhat’s hard about change management for digital transformation projects? A Capgemini expert explains why the scope of change is daunting and gives advice.PlayMuteCurrent Time 0:00/Duration 2:32Loaded: 6.56% Picture-in-PictureFullscreenChange management process

An expert discusses change management and digital transformation.

Version control software tools assist with documentation and prevent more than one person from making changes to code at the same time. Such tools have capabilities to track changes and back out changes when necessary.

Change management for IT infrastructure

Change management tools are also used to track changes made to an IT department’s hardware infrastructure. As with other types of change management, standardized methods and procedures ensure every change made to the infrastructure is assessed, approved, documented, implemented and reviewed in a systematic manner.

When changes are made to hardware settings, it may also be referred to as configuration management (CM). Technicians use configuration management tools to review the entire collection of related systems and verify the effects a change made to one system has on other systems.

Change management challenges

Companies developing a change management program from the ground up often face daunting challenges. In addition to a thorough understanding of company culture, the change management process requires an accurate accounting of the systems, applications and employees to be affected by a change. Additional change management challenges include:

• Margaret Rouse asks:Does your organization have change management policies in place?Join the Discussion

Resource management – Managing the physical, financial, human, informational and intangible assets/resources that contribute to an organization’s strategic plan becomes increasingly difficult when implementing change.

Resistance – The executives and employees who are most affected by a change may resist it. Since change may result in unwanted extra work, ongoing resistance is common. Transparency, training, planning and patience can help quell resistance and improve overall morale.

Communication – Companies often fail to consistently communicate change initiatives or include its employees in the process. Change-related communication requires an adequate number of messages, the involvement of enough stakeholders to get the message out and multiple communication channels.

New technology – The application of new technologies can disrupt an employee’s entire workflow. Failure to plan ahead will stall change. Companies may avoid this by creating a network of early learners who can champion the new technology.

Multiple points of view – In change management, success factors differ for everyone based on their role in the organization. This creates a challenge in terms of managing multiple priorities simultaneously.

Scheduling issues – Deciding whether a change program will be long or short-term, and clearly defining milestone deadlines is complicated. Some organizations believe that shorter change programs are most effective. Others prefer a more gradual approach, as it may reduce resistance and errors.

0 Principles of Change Management

Tools and techniques to help companies transform quickly.

by John Jones, DeAnne Aguirre, and Matthew Calderone

• PDF

Updated: 10 Principles of Leading Change Management

This classic guide to organizational change management best practices has been updated for the current business environment. To read the newest article, click here.  Or, to watch a related video, click on the play button above.

Way back when (pick your date), senior executives in large companies had a simple goal for themselves and their organizations: stability. Shareholders wanted little more than predictable earnings growth. Because so many markets were either closed or undeveloped, leaders could deliver on those expectations through annual exercises that offered only modest modifications to the strategic plan. Prices stayed in check; people stayed in their jobs; life was good.

Market transparency, labor mobility, global capital flows, and instantaneous communications have blown that comfortable scenario to smithereens. In most industries — and in almost all companies, from giants on down — heightened global competition has concentrated management’s collective mind on something that, in the past, it happily avoided: change. Successful companies, as Harvard Business School professor Rosabeth Moss Kanter told s+b in 1999, develop “a culture that just keeps moving all the time.” GET THE STRATEGY+BUSINESS NEWSLETTER DELIVERED TO YOUR INBOX

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This presents most senior executives with an unfamiliar challenge. In major transformations of large enterprises, they and their advisors conventionally focus their attention on devising the best strategic and tactical plans. But to succeed, they also must have an intimate understanding of the human side of change management — the alignment of the company’s culture, values, people, and behaviors — to encourage the desired results. Plans themselves do not capture value; value is realized only through the sustained, collective actions of the thousands — perhaps the tens of thousands — of employees who are responsible for designing, executing, and living with the changed environment.

Long-term structural transformation has four characteristics: scale (the change affects all or most of the organization), magnitude (it involves significant alterations of the status quo), duration (it lasts for months, if not years), and strategic importance. Yet companies will reap the rewards only when change occurs at the level of the individual employee.

Many senior executives know this and worry about it. When asked what keeps them up at night, CEOs involved in transformation often say they are concerned about how the work force will react, how they can get their team to work together, and how they will be able to lead their people. They also worry about retaining their company’s unique values and sense of identity and about creating a culture of commitment and performance. Leadership teams that fail to plan for the human side of change often find themselves wondering why their best-laid plans have gone awry.

No single methodology fits every company, but there is a set of practices, tools, and techniques that can be adapted to a variety of situations. What follows is a “Top 10” list of guiding principles for change management. Using these as a systematic, comprehensive framework, executives can understand what to expect, how to manage their own personal change, and how to engage the entire organization in the process.

1. Address the “human side” systematically. Any significant transformation creates “people issues.” New leaders will be asked to step up, jobs will be changed, new skills and capabilities must be developed, and employees will be uncertain and resistant. Dealing with these issues on a reactive, case-by-case basis puts speed, morale, and results at risk. A formal approach for managing change — beginning with the leadership team and then engaging key stakeholders and leaders — should be developed early, and adapted often as change moves through the organization. This demands as much data collection and analysis, planning, and implementation discipline as does a redesign of strategy, systems, or processes. The change-management approach should be fully integrated into program design and decision making, both informing and enabling strategic direction. It should be based on a realistic assessment of the organization’s history, readiness, and capacity to change.

2. Start at the top. Because change is inherently unsettling for people at all levels of an organization, when it is on the horizon, all eyes will turn to the CEO and the leadership team for strength, support, and direction. The leaders themselves must embrace the new approaches first, both to challenge and to motivate the rest of the institution. They must speak with one voice and model the desired behaviors. The executive team also needs to understand that, although its public face may be one of unity, it, too, is composed of individuals who are going through stressful times and need to be supported.

Executive teams that work well together are best positioned for success. They are aligned and committed to the direction of change, understand the culture and behaviors the changes intend to introduce, and can model those changes themselves. At one large transportation company, the senior team rolled out an initiative to improve the efficiency and performance of its corporate and field staff before addressing change issues at the officer level. The initiative realized initial cost savings but stalled as employees began to question the leadership team’s vision and commitment. Only after the leadership team went through the process of aligning and committing to the change initiative was the work force able to deliver downstream results.

3. Involve every layer. As transformation programs progress from defining strategy and setting targets to design and implementation, they affect different levels of the organization. Change efforts must include plans for identifying leaders throughout the company and pushing responsibility for design and implementation down, so that change “cascades” through the organization. At each layer of the organization, the leaders who are identified and trained must be aligned to the company’s vision, equipped to execute their specific mission, and motivated to make change happen.

A major multiline insurer with consistently flat earnings decided to change performance and behavior in preparation for going public. The company followed this “cascading leadership” methodology, training and supporting teams at each stage. First, 10 officers set the strategy, vision, and targets. Next, more than 60 senior executives and managers designed the core of the change initiative. Then 500 leaders from the field drove implementation. The structure remained in place throughout the change program, which doubled the company’s earnings far ahead of schedule. This approach is also a superb way for a company to identify its next generation of leadership.

4. Make the formal case. Individuals are inherently rational and will question to what extent change is needed, whether the company is headed in the right direction, and whether they want to commit personally to making change happen. They will look to the leadership for answers. The articulation of a formal case for change and the creation of a written vision statement are invaluable opportunities to create or compel leadership-team alignment.

Three steps should be followed in developing the case: First, confront reality and articulate a convincing need for change. Second, demonstrate faith that the company has a viable future and the leadership to get there. Finally, provide a road map to guide behavior and decision making. Leaders must then customize this message for various internal audiences, describing the pending change in terms that matter to the individuals.

A consumer packaged-goods company experiencing years of steadily declining earnings determined that it needed to significantly restructure its operations — instituting, among other things, a 30 percent work force reduction — to remain competitive. In a series of offsite meetings, the executive team built a brutally honest business case that downsizing was the only way to keep the business viable, and drew on the company’s proud heritage to craft a compelling vision to lead the company forward. By confronting reality and helping employees understand the necessity for change, leaders were able to motivate the organization to follow the new direction in the midst of the largest downsizing in the company’s history. Instead of being shell-shocked and demoralized, those who stayed felt a renewed resolve to help the enterprise advance.

5. Create ownership. Leaders of large change programs must overperform during the transformation and be the zealots who create a critical mass among the work force in favor of change. This requires more than mere buy-in or passive agreement that the direction of change is acceptable. It demands ownership by leaders willing to accept responsibility for making change happen in all of the areas they influence or control. Ownership is often best created by involving people in identifying problems and crafting solutions. It is reinforced by incentives and rewards. These can be tangible (for example, financial compensation) or psychological (for example, camaraderie and a sense of shared destiny).

At a large health-care organization that was moving to a shared-services model for administrative support, the first department to create detailed designs for the new organization was human resources. Its personnel worked with advisors in cross-functional teams for more than six months. But as the designs were being finalized, top departmental executives began to resist the move to implementation. While agreeing that the work was top-notch, the executives realized they hadn’t invested enough individual time in the design process to feel the ownership required to begin implementation. On the basis of their feedback, the process was modified to include a “deep dive.” The departmental executives worked with the design teams to learn more, and get further exposure to changes that would occur. This was the turning point; the transition then happened quickly. It also created a forum for top executives to work as a team, creating a sense of alignment and unity that the group hadn’t felt before.

6. Communicate the message. Too often, change leaders make the mistake of believing that others understand the issues, feel the need to change, and see the new direction as clearly as they do. The best change programs reinforce core messages through regular, timely advice that is both inspirational and practicable. Communications flow in from the bottom and out from the top, and are targeted to provide employees the right information at the right time and to solicit their input and feedback. Often this will require overcommunication through multiple, redundant channels.

In the late 1990s, the commissioner of the Internal Revenue Service, Charles O. Rossotti, had a vision: The IRS could treat taxpayers as customers and turn a feared bureaucracy into a world-class service organization. Getting more than 100,000 employees to think and act differently required more than just systems redesign and process change. IRS leadership designed and executed an ambitious communications program including daily voice mails from the commissioner and his top staff, training sessions, videotapes, newsletters, and town hall meetings that continued through the transformation. Timely, constant, practical communication was at the heart of the program, which brought the IRS’s customer ratings from the lowest in various surveys to its current ranking above the likes of McDonald’s and most airlines.

7. Assess the cultural landscape. Successful change programs pick up speed and intensity as they cascade down, making it critically important that leaders understand and account for culture and behaviors at each level of the organization. Companies often make the mistake of assessing culture either too late or not at all. Thorough cultural diagnostics can assess organizational readiness to change, bring major problems to the surface, identify conflicts, and define factors that can recognize and influence sources of leadership and resistance. These diagnostics identify the core values, beliefs, behaviors, and perceptions that must be taken into account for successful change to occur. They serve as the common baseline for designing essential change elements, such as the new corporate vision, and building the infrastructure and programs needed to drive change.

8. Address culture explicitly. Once the culture is understood, it should be addressed as thoroughly as any other area in a change program. Leaders should be explicit about the culture and underlying behaviors that will best support the new way of doing business, and find opportunities to model and reward those behaviors. This requires developing a baseline, defining an explicit end-state or desired culture, and devising detailed plans to make the transition.

Company culture is an amalgam of shared history, explicit values and beliefs, and common attitudes and behaviors. Change programs can involve creating a culture (in new companies or those built through multiple acquisitions), combining cultures (in mergers or acquisitions of large companies), or reinforcing cultures (in, say, long-established consumer goods or manufacturing companies). Understanding that all companies have a cultural center — the locus of thought, activity, influence, or personal identification — is often an effective way to jump-start culture change.

A consumer goods company with a suite of premium brands determined that business realities demanded a greater focus on profitability and bottom-line accountability. In addition to redesigning metrics and incentives, it developed a plan to systematically change the company’s culture, beginning with marketing, the company’s historical center. It brought the marketing staff into the process early to create enthusiasts for the new philosophy who adapted marketing campaigns, spending plans, and incentive programs to be more accountable. Seeing these culture leaders grab onto the new program, the rest of the company quickly fell in line.

9. Prepare for the unexpected. No change program goes completely according to plan. People react in unexpected ways; areas of anticipated resistance fall away; and the external environment shifts. Effectively managing change requires continual reassessment of its impact and the organization’s willingness and ability to adopt the next wave of transformation. Fed by real data from the field and supported by information and solid decision-making processes, change leaders can then make the adjustments necessary to maintain momentum and drive results.

A leading U.S. health-care company was facing competitive and financial pressures from its inability to react to changes in the marketplace. A diagnosis revealed shortcomings in its organizational structure and governance, and the company decided to implement a new operating model. In the midst of detailed design, a new CEO and leadership team took over. The new team was initially skeptical, but was ultimately convinced that a solid case for change, grounded in facts and supported by the organization at large, existed. Some adjustments were made to the speed and sequence of implementation, but the fundamentals of the new operating model remained unchanged.

10. Speak to the individual. Change is both an institutional journey and a very personal one. People spend many hours each week at work; many think of their colleagues as a second family. Individuals (or teams of individuals) need to know how their work will change, what is expected of them during and after the change program, how they will be measured, and what success or failure will mean for them and those around them. Team leaders should be as honest and explicit as possible. People will react to what they see and hear around them, and need to be involved in the change process. Highly visible rewards, such as promotion, recognition, and bonuses, should be provided as dramatic reinforcement for embracing change. Sanction or removal of people standing in the way of change will reinforce the institution’s commitment.

Most leaders contemplating change know that people matter. It is all too tempting, however, to dwell on the plans and processes, which don’t talk back and don’t respond emotionally, rather than face up to the more difficult and more critical human issues. But mastering the “soft” side of change management needn’t be a mystery.

Change Management – Meaning and Important Concepts

The business landscape of the 21st century is characterized by rapid change brought about due to technological, economic, political and social changes. It is no longer the case that the managers and employees of firms in this decade can look forward to more of the same every year. In fact, the pace of change is so rapid and the degree of obsolescence if organizations resist change is so brutal that the only way out for many firms is to change or perish. In this context, it becomes critical that organizations develop the capabilities to adapt and steer change in their advantage.

The role of senior managers becomes crucial in driving through change and ensuring that firms are well placed with respect to their competitors. However, it is the case that in many organizations, senior managers actively resist change and in fact thwart change initiatives due to a variety of reasons which would be explored in subsequent sections. This essay examines the barriers to change by senior managers and discusses approaches to mitigate such resistance. The essay begins with a discussion n the role of senior managers as barriers to change and then outlines some approaches on how to get the senior managers on board for change.

It goes without saying that “he who rejects change is the architect of decay and the only human institution that rejects progress is the cemetery.” With this axiom in mind, it is critical to understand that unless change is actively embraced, organizations in the 21st century risk obsolescence.

To resist change is as basic as human nature and hence the change managers must adopt an inclusive approach that considers the personality clashes and the ego tussles. It is often the case that in large organizations, there tend to be power centres and fiefdoms and hence the issue of organizational change must address the group dynamics as well as the individual behavioural characteristics.

Only by an understanding of the means by which managers can be brought on board can there be a foundation for suitable approaches. The approaches include a combination of pressure tactics and coordination instead of competition and cooption as well as cooperation. Change agents must realize that wherever possible, they must deal with consensual decision making and if that is not possible, they must walk the talk and be firm in their approach. Managers at all levels have a tendency to resist change and in the high stakes game of change management, it is the ones that can articulate and communicate the change in a clear and coherent manner who succeed.

In conclusion, change is the only constant in business and the landscape of the 21st century is littered with companies that have not adapted to the changing times. Hence, organizations must and should embrace change and the approaches discussed in this paper are part of the solution.

The Need for Change Management

In the contemporary business environment, organizations fight the battle of competition by building their adaptive capabilities and preparedness for coping against the pressures of change. In the present scenario, top management give a lot of importance to change management process and the need for being flexible as well as adaptable for tackling the growing environmental uncertainties or competitive threats.

Change management is a complex process and requires serious attention as well as involvement from the management and people from all levels, in order to achieve a meaningful or a progressive transformation across various levels. For being ahead in the competitive race and gaining a winning edge, organizations have been focusing on expansion of business worldwide, achieving excellence in processes and operations, implementing innovations in technology and identifying/developing the right talent. The fast changes which have taken place and the way in which this has affected the strategies, people, policies and processes in an organization, it has become all the more imperative that organizations clearly establish a well-defined change management framework for realizing the strategic objectives. Change is inevitable and it can only be managed, failing which the organizations may cease to exist.

In the era of globalization, organizations function across the cultural boundaries with large investments in human capital as well as physical resources, give utmost importance to technological change and innovative practices for a leadership advantage. Business alliances like mergers, acquisitions, diversifications, takeovers and various other collaborative ventures have become the most preferred strategic best practices for the organizations to survive the fierce forces of competition, through transfer of people, technology, processes and leadership. For successfully handling this transition and converting the threats of change into opportunities, organizations must be flexible and open for Change Management.

By improving the readiness for change, organizations can strengthen their adaptability mechanisms and build their internal competencies for facing future uncertainties or many such multiple change auguring situations. An organization’s readiness for change management influences organizational strategies and policy related decisions, as it involves a comprehensive, well planned approach and implementation of systemic interventions which would have an overall influence on the system, processes, people as well as the organizational structure as a whole.

Innovations in technology and research advancements, have created opportunities for working virtually across any part of the globe; changes in the organizational structure and hierarchy; changes in the human resource policies and regulations, has resulted in organizational reengineering and change in the style of working of employees.

For meeting the growing demands of ever changing business operations, more dynamic and flexible organizations have endorsed new methods of working like flexi work hours, work from home, freelancing opportunities, virtual method of working, business operation outsourcing and project driven operations, etc. which provide ample opportunities to the workmen to work as per their convenience and flexibility.

Organizations change for responding to the fluctuations or volatility in the business environment. Any change in order to have successful outcomes must involve comprehensive planning, focused approach and involvement of the key stakeholders in the entire process.

For any organization, people play a very vital role in driving business excellence as they are the most valuable assets. Hence, a change in the method of handling a job role, implementation of facilitating interventions and training people about the new practices or techniques, can result in impressive results in terms of the return on investment (ROI). How organizations manage change or respond to the business transitions largely depend upon the adaptability of people or readiness of the people in understanding the changes in the process and method of handling a job. Change management process may directly affect the human resource strategies of an organization depending upon the goals or strategies of an organization.

A well-defined change management process can help in mitigating risks related with the people side. If this aspect is ignored, it might result in increase in the overall costs, decline in productivity as well as employee motivation and increase in the absenteeism level and employee attrition. Hence, it improves the overall preparedness of the management and the decision making authorities in understanding the need for managing change, the key processes involved in it and in understanding the operational technicalities connected with it.

Planned change if effectively implemented can be beneficial in terms of controlling costs, minimizing risks, reducing the stress and anxiety by controlling uncertainties. It helps in setting up new milestones, establishing objectives, defining priorities and identifying the limitations for driving excellence in new initiatives.

Effective Change management process help organizations in understanding the changing customer needs, meeting their demands and expectations much better since the requirements are well defined. If implemented with proper planning, change management does not affect the day to day functioning of an organization, rather it functions concurrently. Instead it creates a scope for establishing best practices, defining the operational framework and regulations for the people, processes and system. It engages people in the entire process and motivates them to work towards realization of a common goal or objective and deliver excellence in performance through collaborative efforts and involvement in the process as a whole. Research in this direction proves the fact that organizations which have an established change management process are more likely to excel in meeting the business goals or achieve excellence in their project outcomes.

Effective change management is the key to realization of operational effectiveness, plays a key role in creating an optimism in the organizational environment as it has holistic outcomes and enables achievement of outcomes by defining superior benchmarks and working towards it for realization of the set benchmarks.

Organizational change affect the leadership thinking style and may optimize the benefits by establishing the systems and processes in place, establishing an integrated framework for achieving the developmental goals with the complete involvement of people in the end to end stages of change management cycle.

Hence, to conclude it may be appropriate to mention that change management is a planned and an integrated approach involving the support of the key stakeholders in terms of the willingness as well as the preparedness to move from the existing state of affairs to a reformed state by accepting the transition and wholeheartedly participating in the entire process.

The success of change management process largely depends upon effective planning, establishing of objectives, communication of objectives to the people involved in it and establishing of the required framework to deliver the expected goals or outcomes.

Kinds of Change and the Barriers to Change

There are different kinds of change that an organization might undertake or be forced to undertake because of internal and external factors.

The internal factors for change include reorganization and restructuring to meet the challenges of the future and also to act proactively to initiate change as a means of staying ahead of the competition.

The external factors include change that is forced upon the organization because of falling revenues, changing market conditions and the need to adapt to the ever changing business landscape.

Change can be organic which means that it evolves slowly and is like meandering up the gentle slope of a mountain. In this case, the organization and the management have enough time to prepare for change and reorient themselves accordingly. This is the kind of change that is adaptive meaning that firms have the opportunity to adapt themselves to the change.

Change can be radical which is rapid, sudden and uncertain. This is the kind of change that is disruptive and often forces organizations to reorient themselves without adequate notice and warning. It is better for organizations to anticipate change rather than be forced into accepting change that is rapid and sudden.

We have seen how managers at different levels resist change and how this resistance manifests itself. Apart from the ideological and personality issues, there is the very real possibility of change being resisted because the “visibility” of what comes next is not clear. For instance, many managers tend to resist change because the change initiators have not clearly spelt out the outcomes of the changes and the possible impacts that such changes have on the organization. This is the realm of the “known unknowns” and the “unknown unknowns” which arise because of ambiguity, complexity and uncertainty. Hence, the resistance to change can come about due to the lack of coherence in the vision and mission and because the change is not clearly communicated as well.

Finally, the rapidity with which change is introduced can upset the organization structures that are usually rigid and bureaucratic with bean counters at all levels resisting and actively thwarting change. Hence, it needs to be remembered that change initiators take into account all these factors when introducing changes. The possible approaches in dealing with these resistances would be discussed in the next section.

Pre-Requisites for Successful Change Management

Change Management in an organization aims at realizing the strategic goals and improving an organization’s preparedness for meeting both internal as well as external challenges, which may influence business growth and profitability. To remain on top, today companies have to undergo through progressive transformation and evolve as per the changing business environment.

Effective Change Management involves a comprehensive and an integrated effort from all the levels of the management. Successful change management involves consideration of several factors, which have been described below:

Effective Planning: This is critical for ensuring successful change to happen. This stage essentially involves definition and documentation of objectives to be attained from change management and also the strategies for realizing those objectives. It aims at addressing the vital questions of who, what, why, when, where and how involved in the implementation of any change management programme. It takes into context the current situation and equally assesses the impact of change initiatives on the futuristic strategies of the organization, the people involved in it as well as the stakeholders connected with it.

Effective Planning should consider the below factors:

• Clear definition of objectives of change management and alignment of objectives with the organizational vision/mission/strategies. If the vision is not defined properly or shared, seeking the involvement of all the stakeholders in the process of change may be difficult. Lack of vision and direction, may result in misaligned approach, incompatible outcomes and may dissolve the long term benefits of change initiatives.
• Documentation of the objectives, defining the road map or the development of the change plan for implementing change management successfully. Documentation of the change management objectives, provides a strategic direction and justifies the rationale of a change initiatives along with the resources required for it to happen. It provides a bigger picture regarding the magnitude and complexities involved in the entire process of change management.Documentation should justify the following points:
  1. Why a change initiative is required and the factors/drivers establishing a need for change management.
  2. What could be the possible outcomes of the change initiatives, and
  3. How a change management effort may affect the key stakeholders, people, processes and the organization as a whole.
  Change Plan must cover the following areas:
  1. The change plan should elaborate the key objectives which are aimed at.
  2. Highlight the strategic alternatives, direction, organizational restructuring, changes in the existing processes & people management practices to ensure successful change.
  3. Plans for implementing the change, provide a description on how the change would be communicated to the people or the stakeholders who are connected with it.
  4. Highlight the resources involved or the timelines within which the results are supposed to be achieved.
  5. The changes in the HR policies and principles which may be applied particularly in relation with the staffing issues for realizing the objectives of change management.
  6. Clear definition of the key performance indicators for reviewing the outcomes of change management and its success in meeting the objectives.

Definition of the Governance Structure/Framework for effective Change Management: In the absence of a well-defined governance framework, the success of change management efforts may fizzle away. For a successful change to happen, the organizational structure, roles & responsibilities should be established and defined clearly to monitor the progress of change periodically and implement corrective actions for seamless transformation. The following change governance structure model can be used:

• Steering Committee: It is the apex body responsible for ensuring the success of change management. The members of the steering committee are responsible for planning and implementing strategies, providing direction and leadership for change management and ensure that the objectives of change management remain in alignment with the organizational vision/goals.
• Change Sponsor: The change sponsor is the key person responsible who is directly responsible and accountable for the change. This may be a senior level representative who may have the responsibility of managing the resources involved in the change management process and may exercise control over the expenditure incurred in the entire process. The Change sponsor is involved in the end to end process, is directly accountable for gathering the support and commitment of the business leaders in particular, minimizes the resistance or barriers to change management and addresses the risks associated by taking radicle measures. A change sponsor is usually someone who enjoys greater authority, is empowered and experienced in implementing vital decisions for handling the complexities in change management.
• Change Agent: A change agent is responsible for coordinating the day to day activities and provides the needed support as well as expertise for ensuring the success of a change initiative. Change teams are the facilitators involved in extensive coordination between the various functionalities, establishes the operational framework and ensures adherence with the regulations involved in the entire process.
• Work Streams/Groups: This involves the task forces/groups directly responsible for the realization of the specific objectives of change management. The task forces or specialized groups within the organizations work upon the specific projects and are directly accountable for completion of the assigned responsibilities within the predefined timelines and resources.

Commitment of the Leadership: Leaders build the conducive organizational culture and climate for the realization of the objectives of change management. Their commitment and involvement is critical for the success of change efforts. Leaders who are transformational, visionaries and lead by example can foster an environment of cooperation and collaboration across all the levels of the organization.

Stakeholders Awareness and Involvement: Stakeholders involvement and participation in the entire process is critical for the success of change management. The organizations should engage the stakeholders by facilitating an environment of collaboration and communicate the objectives as well as its outcomes.

Workforce Alignment: This should essentially involve an assessment of the impact of change management process on the people and establishing plans for obtaining the support of the people in the entire process by building collaborative synergies and highlighting the beneficial outcomes.

Change Management: Success Stories as well as Failures (Organizational Case Studies)

1. Success Stories (Pearson): In 2012, John Fallon the new CEO of the organization announced a new game plan “Global Education Strategy” for realizing the bigger objectives of business. Apart from this, he championed organizational restructuring leading to the formation of 6 different units of workforce. The company went big by not only changing the strategies but also by implementing organizational restructuring to support the entire plan. The communication was established in a top down manner-Intranet was considered as the medium for communicating the objectives of change and also the expectations involved in it. For realizing the strategic intent of change management, the new CEO relied heavily on new technology (intranet) for aggressive internal marketing of change initiatives and the benefits associated with it.
2. Failure Stories (Walmart): The giant retail player followed the strategy of Low Pricing few years ago and enjoyed a prominence in the market due to its low pricing strategy for across various categories of products. Few years later, they introduced a change in the strategy for attracting niche customer segments who could afford higher priced products and up-scaled their items. Due to a change in the strategy, Walmart lost its business profitability since it could neither attract the higher end customers through its products and the regular customers started looking for better bargains from the competitors.

Overcoming Barriers to Change

Research has shown that the best way to get the senior managers at all levels interested in the change initiatives is by engaging them and seeking their buy-in for the change management process. Studies have proved that the managers in the upper echelons buy into the change from a strategic perspective where the accent is on performance and hence radical or disruptive change is seen as part and parcel of an organizations development.

Managers at the middle level can be made to see the value inherent in change and hence they can be brought on board. The frontline managers’ views and inputs can be sought and thereby their cooperation and participation in the change obtained. These are the broad outlines and the following detailed sets of approaches can be pursued as well.

Make Them the Hero

By making the managers the change drivers and change initiators is often the best way of securing their buy-in. The point here is that by getting the managers to be the ones who are implementing change and by giving them centre stage, it is possible to secure their participation.

By definition, senior managers are highly capable, motivated and ambitious. By making them the stars of the change process, their innate abilities can be harnessed to the benefit of the organization. It is often better to have a close association with the senior managers to achieve the desired results.

Show them the potential of Change

By selling change and the value of such change to the organizations and themselves the senior managers can be persuaded to accept change. The point to note is that senior managers must be told what their role in the post change scenario would be and by making them see themselves in the future vision, they can be made to play a key part in the change management.

As has been mentioned earlier, if the benefits of the change are explained and by persuading that the change does not involve downsizing or other reduction in roles and responsibilities, the senior managers can be expected to be partners rather than resisters in the change management process.

Painting the Alternatives

This is the stick part of the carrot and stick approach wherein senior managers are told of the urgent need for change and by indicating to them what the consequences for themselves and the organization would be if the change does not succeed. By painting harsh alternative scenarios like declining market share and repercussions of layoffs and downsizing if the change does not succeed would make the senior managers realize the flip side of resistance. In this way, they can be persuaded to accept the business realities behind the change process.

Involving Them in the Change

By adopting a “hands on” approach that would involve “all hands” and including all the stakeholders, senior managers can be brought on board. The point is that by adopting an inclusive approach and giving a sense of ownership to the senior managers and taking their inputs and feedback would ensure that the key aspect of “engagement” is achieved.

The key to senior manager participation in the change initiatives is through engagement and only by communicating clearly the benefits of change and by positing the alternatives would it be possible to engage with senior managers. A suitable narrative of the changes and the impact that they have on the senior managers must be communicated to all levels and there must be a process in place to bring on board as many managers as possible.

Personality clashes and power politics can be addressed by consensual approaches to decision making and by adopting a carrot and stick approach as described above.

The Role of Senior Managers as Barriers to Change

It is often the case that when change programs are initiated in firms, there is a level of resistance from senior managers due to a number of reasons. These range from protecting their turfs to uncertainties regarding their position after the change is implemented and to ego clashes as well as power politics. The ways in which they can manifest their resistance to change ranges from citing time pressures and constraints involved in implementing the change, citing operational pressures in bureaucratic and mechanistic organizations where the rigid structure does not lend itself to change and finally, by pointing out earlier instances of change that have failed. The point to note is that it is human nature to be comfortable with the status quo and hence barriers to organizational change are psychological more than anything else.

In the case of senior managers, the barriers to change arise because they would want to protect their turfs, resist change because it has been initiated by a rival power group and finally, there is a tendency to resist change because the senior managers do not see a role for them after the change is implemented.

It needs to be remembered that while bad strategies result in failed change initiatives, good strategies without proper execution and implementation lead to the same result. Hence, it is not enough to have a good strategy in place if there is no viable means of execution and implementation.

When we discuss about the barriers of change from senior managers, we need to distinguish between the levels of managers. This is necessary as the barrier to change is different at each level. For instance, the front line managers often resist change because they fear for their positions post change. Since these managers are vulnerable to the changes wrought by technology where their positions become obsolete because of automation, the front line managers tend to resist change because of this aspect. The front line managers might also be disinterested in the change if it does not impact the day to day workings or the operational issues. This is the case of the “distance” between the change initiators and the operational managers that can result in the change being remote and the front line managers being unconcerned with the change.

The middle level managers who form the “sandwich” between the workforce and senior management have a pivotal role to play in change management initiatives as they are the ones who communicate the changes to the workforce and in turn have to report on the success or otherwise of the initiatives to the senior management. These middle tier managers often resist change because of inertia and a status quo mentality which makes them impervious to new realities. It is a fact that the middle tier managers in bureaucratic or machine structure organizations have a lot from continuing with the status quo because of the tangible and intangible benefits that accrue to them.

Finally, and most importantly, the managers in the upper echelons tend to resist change because they have personal fiefdoms that they protect jealously. Further, they have big personalities because of which the possibilities of ego clashes among the top management are very real. In cases where the change is initiated by one faction, the rival faction tends to oppose such change purely on personality issues alone. It is also noteworthy that senior managers and managers at all levels exhibit tendencies that are described in theory as value enhancing or utility maximizing (the so-called “agency problems”) which would make them behave in ways contrary to the interests of the shareholders. These are some of the characterizations of the levels of managers and their tendencies to resist change.

Reasons for Resistance to Change

Change is an important and an indispensable part of the organizational life. It is all pervasive and hence comes the question of paying attention to the importance of building the coping and adaptive mechanisms of an organization for being current and competitive in the contemporary scenario. The phrase “Resistance to Change” is discussed hand to hand along with the concept of Change Management. Resistance to Change may be organizational or individual in nature. According to Agócs, 1997, organizational resistance involves all the organizational behavioural patterns which impede or undermines change.

A mild degree of resistance to change is considered to be positive as it provides a great extent of behavioural stability as well as predictability. It is believed to have a favourable influence on the decision making, evaluation of the available alternative critically and leads to a healthy brainstorming on the viability of various ideas and strategic alternatives. But, on the other hand, resistance to change hinders the progress of the work due to unnecessary chaos and creates adaptability issues.

Resistance to change can manifest in different ways. Resistance towards a change can be expressed in an overt manner, covertly, implicitly, can be immediate or may be deferred. Individual Resistance to Change can be classified into the following categories as below:

Rational vs. Irrational Resistance

According to de Jager, 2001, Rational or Irrational Resistance to Change can be defined as merely a perceptual process. Irrational resistance to change does not find too much of a mention in the change literature. Hence the irrational resistance does not have a clearly defined definition. Irrational resistance can only be felt or usually expressed in various behavioural forms.

On the other hand, Rational Resistance to Change is backed by logical argument, justification or a reward which can bring about the change.

Justified vs. Unjustified Resistance

Rational Resistance to Change can be classified into Justified and Unjustified Resistance to Change. Unjustified Rational Change is usually psychological in nature and may involve conflicting commitments in a hidden form (Kegan & Lahey, 2002), might manifest as personal insecurities or fears (Powell & Posner, 1978; Yukl, 2006) or may be simply as a belief that a change may come against one’s very own ideals or culture (Lawson & Price, 2003; Recardo, 1995; Schein & NetLibrary, 2004; Yukl, 2006). Unjustified rational resistance may take the following forms with fear or threat being the major drivers:

• Fear towards the unknown
• Fear regarding the Personal Failure
• Fear of Being Labelled as Incompetent
• Fear of Loss of Control over the situation
• Threat to personal values, principles or philosophy
• Threat of a possible change in the status

According to Recardo (1995), an employee who is faced with the fear of unknown may require special efforts in communication from the change agent for managing that fear. For dealing with the fear of failure or being considered as incompetent, the organization may temporarily introduce changes in the workflow or change the employee evaluation procedure so that the employees are reassured that they will not be penalized during the entire change process. Atkinson (2005), a change specialist is of the view that various change programs fail to meet the intended objectives due to the lack of efforts devoted to effective internal public relations. Though some fears and threats can be easily addressed with devoted efforts from the change management involving effective communication with the key stakeholders and the people who are directly affected by the change. However, unhealthy threats and fears cannot be easily addressed and are beyond the purview of the change agent or the management and may take a longer time for adaptation process.

Justified Resistance takes place when the real threat or fear exists and the change is manifested in a negative form. Several consultants explain that the Justified Resistance is believed to have a positive effect on the organization (de Jager, 2001; Atkinson, 2005). According to Dent and Goldberg (as cited in Oreg, 2006 p. 73), the members of the organization resist adverse outcomes of the change and not the change itself. The negative outcomes of the change may take the following forms:

• Change may increase the workload
• Change may affect the job security
• Change may adversely affect the social networking of the employee
• The resource availability for implementing the change are insufficient. Hence the change is resisted
• The need for change is not so urgent or important

Research studies have proven that a negative consequence of change will lead to resistance from the employees which is obvious and cannot be avoided. For example, organizational downsizing or a reduction in the pay of employees will undoubtedly lead to a resistance from the employees, but this resistance may not essentially affect the possible effects or the outcomes of the change.

Covert vs. Overt Resistance

Resistance to change can be expressed in an overt or covert manner (de Jager, 2001). According to Atkinson (2005), identification of overt resistance is relatively easier, and the appropriate strategies can be used for mitigating its effects. Overt resistance may manifest in various forms but is usually expressed in the form of either opposing vocally or in the form of strong agitation. On the other hand, it is very difficult to detect covert resistance to change. According to Recardo (1995), covert resistance to change may be expressed in the following ways:

• Reduction in the output
• Withholding the information
• Lingering the matter by asking for unnecessary details or information for further studies or investigation
• Unnecessarily appointing committees or various task forces

Resistance to change is still a controversial area of research or study as still there is an absence of a proper consensus between different authors regarding the change outcomes, which is due to the lack of substantial empirical pieces of evidence or facts on the change literature. Resistance to change is still a potential area of investigation or further research, and a lot of newer insights on this subject can be unveiled through effective research and investigation.

Individual and Organizational Sources of Resistance to Change

Individual sources of resistance towards a change exist in the basic human tenets or characteristics and are influenced by the differences in perception, personal background, needs or personality-related differences. It is important to understand those triggering factors or issues which refrain individuals from endorsing change or extending their support and cooperation towards any change initiatives at an organizational level.

Criticizing the individuals or the teams for not being supportive in the stages of transition or compelling them cannot be an effective solution for implementing change smoothly or in a hassle free manner.

The resistance towards change at an individual level can be due to various reasons:

• How satisfied they are with the existing state of affairs
• Whether they appreciate the overall end product of change and it’s outcome on them
• How much practical or realistic the change is
• What will be the possible cost change on the individual in terms of potential risks involved, pressure to develop new competencies and disruptions

The following factors explain why individuals may pose resistance towards change:

• Habits: We individuals are influenced by our habits in our ways of working and accept or reject a change depending upon the effect which a change may have on the existing habits of the individuals. For example, change in the office location might be subjected to resistance from the individuals as this might compel them to change their existing life routine and create a lot of difficulties in adjustment or coping with the schedule. The individuals might have to drive a longer way for reaching their office, or start early from home for reaching their office in time, etc.
• Lack of Acceptability or Tolerance for the Change: Some individuals endorse change and welcome a change initiative happily while few individuals fear the impact of change. Over a period of time change fatigue also builds up.
• Fear of a Negative Impact Economically or on the Income: During the process of organizational restructuring or introduction of organization-wide change as a strategic move on the part of the management, several inhibitions, and fear rule the thought process of the individuals. Fear of possible loss of a job as a result of change or a change in their income structure or may be a change in their work hours could be one amongst the possible reasons.
• Fear of the Unseen and Unknown Future: Individuals develop inertia towards the change due to the fear of unknown or uncertainties in the future. This can be tackled through effective communication with the participants of change and making people aware of the positives of change and the course of action which individuals are expected to follow to cope with the changing requirements successfully.
• Fear of Losing Something Really Valuable: Any form of threat to personal security or financial security or threat to the health of the individuals may lead to fear of losing something precious as a result of the implementation of change.
• Selective Processing of Information: It can be considered as a filtering process in which the individuals perceive or make judgments by gathering selective information which is greatly influenced by their personal background, attitude, personal biases or prejudices, etc. If an individual maintains a negative attitude towards any kind of change, then they are having a usual tendency of looking at the negativities associated with the change and involve all the positive aspects of it.
• A Rigid Belief that change cannot bring about any facilitating change in the organization and it only involves the pain and threats to the individuals.

Now, we will look into the organizational factors which result in resistance to change.

• Resistance Due to the Structural Rigidities or Limitations: Structural resistance is a characteristic feature of bureaucracies, which focus more on stability, control, set methodologies or routine.
• Ignoring all the interconnected factors which require change or lack of clarity in understanding the ground realities.
• Inertia from the Groups: Groups may resist change because just like individuals, groups equally follow set behavioural patterns, norms or culture and as a result of change the groups might have to change their existing ways of conduct or behaviour.
• Possible threats to Power, Resources or Expertise can also result in resistance towards an organization level change. Any kind of devolution of power or transfer of resources from some agency or group to some other agency or a group will definitely lead to a feeling of fear or inertia towards a change initiative.

In the end, it can be concluded that any kind of change will surely involve heavy resistance at the individual as well as organizational level. But through effective communication during all stages and consulting, desirable outcomes can be ensured by breaking all the possible barriers or resistances towards a change. What is more important is identifying the main source of resistance and accordingly developing action plans for dealing with it.

Successful change in an organization will require strong commitment and involvement on the part of the top management, focused and an integrated approach, strong and a stable leadership, effective and open communication from the internal change agent for making people sensitive and more aware of the realities and the ultimate need for change.

For minimizing the resistance towards the change employee participation and involvement in the overall process plays a crucial role in building acceptability and seeking the cooperation of the employees towards the change. Hence proper planning, coordinated approach and complete involvement of all the stakeholders, play a decisive role in implementing strategic decisions and determining the success of change.

Techniques for Overcoming Resistance to Change and Selection of Appropriate Technique

According to Kotter and Schlesinger (1979) proposed six crucial techniques for overcoming the resistance to change. These are given below:

1. Widespread Education and Improving Communication
2. Facilitating Participation and involvement
3. Support and Facilitation
4. Agreement & Negotiation
5. Co-optation & Manipulation
6. Coercion-Both Explicit and Implicit

1. Education and Effective Communication: This is one of the commonest techniques for minimizing resistance to change by educating people and promoting awareness through effective communication regarding the benefits of a planned change. By explaining the need for change and the objectives of change, the management can gain the much-needed support from the team members and facilitate its smoother implementation.With the help of two-way communication, the employee’s queries and oppositions related to various aspects of change can be quickly addressed and thereby, minimize the objections or hassles which may come across in the path of implementation of change.Given below are the important principles which are related to the communication of change and require a lot of attention while implementation a planned change:
   • A large-scale planned change can be effective and yield successful outcomes only if it involves two-way communication efforts. Only top down communication or one-way communication will fail to attract the desired commitment from the staff members.
   • The staff members do have a preference for being communicated about the change on face to face basis from their immediate supervisors.
   • According to Beckhard & Pritchard 1992; Robbins et al. 1998; Ivancevich & Matteson 1996, employees prefer a consultation and involvement in the change.
   Few important things which should be essentially followed while implementing an organization-wide change are:
   • Avoid sending emails or memo for informing the employees regarding a change initiative and expect that the employees will be able to understand and accept it readily.
   • Invite the suggestions and feedback from the staff members, involve them in the process and encourage their participation for effective results.
   • Communicate with people regularly by engaging in face to face interactions with them both individually and in groups and provide them opportunities for discussion.
2. Facilitating Participation and Involvement: This technique gives a lot of importance to involving the resistors in the change process by setting up a collaborative environment and implementing the change in consultation with the staff. It is a constructive strategy and can be beneficial in minimizing the resistance to change by involving the employees and seeking their participation in the entire process.
3. Support and Facilitation: Employees fear or resist change due to a number of reasons as a result of which they pose a resistance or oppose any kind of transformation in the existing ways of work or methods. The employees look for complete emotional support and facilitation for being able to cope up with the challenges resulting from the change and should be allowed to express their fear, resentment or anger in connection with the change and the challenges of change.
4. Agreement & Negotiation: This technique involves negotiating or bargaining with the resistors on various aspects related to the change and making tradeoffs so that the concerns of the resistors and the management are both being given due consideration and importance.
5. Co-optation & Manipulation: This technique involves getting the support, persuading or influencing the employees in favor of the change. Manipulation involves covert attempts from the managers by withholding painful information, twisting or distortion of the information for making it more appealing for the staff members or spreading false rumors across the organization in order to compel the employees to accept the change manipulatively.Alternately, the managers can depend on staff polling strategy and make an attempt towards persuading the resistors to join the rest of the group. The management may even co-opt an individual and assign certain important responsibilities in connection with the implementation of change.
6. Coercion: Implicit and Explicit: Coercion involves exercising force or threat for making the change accepted and followed by the employees. This strategy emphasizes more on the use of fear by way of direct or indirect threats and involves harassment, bullying or compels the employees to act in accordance with the expected ways or else resign. This strategy is illegal, ineffective and in the long-run, will result in mass resentment, dissatisfaction, high rate of absenteeism, low productivity and ultimately high employee turnover.

Selecting the Right Technique and the Relative Benefits of Each Technique

1. Education and Effective Communication: This technique is useful when there is an absence of availability of ample information with the employees, or they have inaccurate or partial information on various aspects of change. Once the employees are convinced about the change, then they will help in the successful implementation of change as change partners.
2. Facilitating Participation and Involvement: This technique can be useful when the initiators lack substantial information for designing and implementing the change, or the employees have tremendous power to resist the change. The involvement of the employees can increase their commitment level and motivation for supporting the change initiatives, reduce resistance and improve the quality of the decision in connection with the change.
3. Support and Facilitation: This technique is useful when there is resistance towards change from the people due to certain adjustment or adaptability issues. This is the best technique as it involves employee facilitation, training & various supportive efforts for reducing the resistance. However, this technique is very time consuming, expensive and does not necessarily assure a successful outcome.
4. Agreement & Negotiation: This technique is effective when it involves exchanging something valuable for reducing the resistance towards the change. This is one of the most convenient techniques for avoiding any kind of major resistance.
5. Co-optation & Manipulation: This technique can be adopted only when the other techniques fail to provide the desired results or are too expensive. This technique can be relatively inexpensive and quick in terms of results.
6. Coercion (Explicit & Implicit): This technique should be avoided till the end and can be used only as the last possible resort.

Global Financial Crisis and Organizational Change

Resistance to change is inevitable as there are many parties who stand to lose from change and apart from the status quoists there are vested interests who would oppose change. The changes that the organizations and the companies introduced in the wake of the global financial crisis were systemic and fundamental in nature and hence there would be many reasons for people and employees in these organizations to resist change. The primary reason why the people would resist change is that because of job losses and the associated risks of layoffs and restricting, they stand to lose and hence there is a strong element of resistance that enters the discussion.

Since the organizations in Australia undertook drastic changes to the way they worked, the people working in these organizations have every reason to resist the changes because they are at the losing end of the changes and hence have a stake in resisting change. This goes for the majority of people who were affected by the downturn and whose jobs and careers were at stake because of the global financial crisis.

The other reason for people or organizations to resist change is that the global financial crisis was systemic in nature and hence called for fundamental changes in which the system operated. This meant that the people or organizations at the receiving end of these changes had to bear very drastic changes in the way they operated and hence those who gain by following the status quo had every reason to resist the change. This was especially the case with organizations that underwent restricting and cost cutting where though there were no drastic job losses, many of the perks and benefits for the employees were cut leading to widespread dissatisfaction and discontent with the kind of changes that were being proposed. Hence, this is the second most important reason for people or organizations to resist changes in the wake of the downturn caused by the global financial crisis.

The third reason why organizations resisted the changes in the aftermath of the global financial crisis is that many of the changes introduced led to regulatory and legal changes in the way organizations operated and hence there was every chance that these organizations had to implement rules and regulations that would curb excessive risk taking and speculation. Given the enormous benefits that these methods of risk taking and speculation bring to the people and organizations concerned, it is indeed the case that they would not be willing to forego these benefits. Hence, this is a very important reason for people and organizations to resist the changes introduced in the aftermath of the global financial crisis.

In conclusion, change is something that is constant but given the inherent tendency of the bureaucratic structures in organizations to resist change, there is always an element of resistance to change. Particularly when the changes are drastic as seen in the case of the global financial crisis, there tends to be steadfast opposition to change by the organizations and hence this is a fact of life that the change makers and the change agents have to factor in their strategies.

Why Some Organizations are Better at Driving Change ?

We live in a world where increasing complexity is the order of the day and the business landscape is characterized by a rapid turnover of companies which find themselves dethroned from their position because of outmoded thinking or anachronistic strategies.

For instance, Nokia and RIM (the maker of Blackberry) were at the top of the leading mobile companies a couple of years ago. Now, their places have been taken by Apple and Samsung because both Nokia and RIM got bogged down due to a combination of internal problems as well as the failure to spot changing trends. They could not foresee the trends which indicated that mobile phones would be used for purposes very much different from making and receiving calls and instead they would be used in ways that would revolutionize the concept of mobiles as one-stop solutions for a wide variety of consumer needs. In other words, these companies were victims of complexity.

To deal with complexity and uncertainty, companies need to shift the lens with which they are viewing the business landscape and hence change according to the situation rather than have long term strategies based on fixed notions or projections that become obsolete within months. Change management in these cases becomes critical and not just necessary or essential. And to adapt to change, there needs to be a mindset and attitude change rather than plain business strategies. The mindset change is something that needs the top management to actively involve themselves in “winning the hearts and minds” of the employees and the other stakeholders. Only when there is a “buy-in” from the employees to the change initiatives being undertaken by the management can they succeed.

The example of the legendary founder of Apple, the Late Steve Jobs is an excellent case in point as to how charismatic CEO’s can go about “winning the hearts and minds” of employees. Jobs was not only instrumental in turning around Apple Inc. from near bankruptcy to a leader in the industry, but also ushered in a paradigm shift as to the way in which the computing and software industry operated. Another example is the case of Google which has made the organization of information its business and has ensured that the way in which we function everyday has been transformed. In both cases, the CEO’s could inspire and motivate their employees to believe in their vision and by dint of hard work and diligent attention to detail, they succeeded in being “change agents”.

These examples show how change can be initiated in response to ever changing and complex scenarios that business leaders face. What are needed are a compelling vision and a fresh way of looking at issues. Once the vision is articulated, there needs to be a push to reframe the issues and look at problems in a new light. Making sense of complexity becomes easier if the strategies are rethought according to changing circumstances. In conclusion, we need not succumb to complexity and instead use it to drive change that is lasting and beneficial to the company.

Organizational Change and Managing Resistance to Change

Why is Change Resisted ?

Any change anywhere, be it among nations, organizations, societies, or even families is hard to actualize given the human tendency to not step out of the “comfort zone” and hence, resist new ways of doing things and instead, cling on to the status quo.

The change is harder in those cases where the intended audience or the target population is diverse and is comprised of multiple interest groups and power centers. Indeed, in large organizations with diverse workforces and multiple power centers with their own agendas, organizational change is indeed hard to implement and actualize in practice.

Change Agents and Resistance to Change

Having said that, this does not mean that “Change Agents” or those seeking to actualize change should give up or desist from introducing changes into organizations.

On the contrary, challenges should be taken as an inspiration to move forward, and problems should be seen as opportunities that can be converted into solutions and a win-win approach should be the norm.

Indeed, organizational change agents such as the legendary founder of Microsoft, Bill Gates, the late technological revolutionary, Steve Jobs, and N R Narayana Murthy of Infosys, in the Indian context, have always found workarounds and solutions to problems and have also weathered resistance to change from within and without.

Of course, it helps that these individuals are charismatic and have a “halo” around them that helps them to actualize change since the power of their words and their ability to “walk the talk” often emboldens and energizes their followers to follow their path.

However, this does not mean that those change agents who do not have such qualities cannot actualize change as more often than not, the real changes in organizations are brought about by “armies of faceless and nameless” rank and file employees who take Millions of “small steps” to ensure that macro level and Big Picture change happens.

Change is Hard to Implement

Even for the legends of business and the Titans of Industry, implementing and actualizing organizational change has been fraught with challenges and problems as can be seen in the way in which the Late Steve Jobs found himself out of Apple, the company he cofounded only to return much later with a bang. Indeed, even in the case of organizations such as Infosys that thrive and pride themselves on their unique work culture and approach to business, on the ground change and real change has sometimes been hard to come by due to conflicting agendas and multiple power centers stymieing change.

For instance, Microsoft is known as a bureaucratic organization and at the same time, a chaotic and unorganized place where processes and approaches depend on individuals rather than on a systemic approach to change.

Indeed, Bill Gates has often remarked how ideas should go hand in hand with actual implementation to make real change happen. For that matter, even in the much hyped and much celebrated Silicon Valley Startups and Unicorns (those startups valued at more than a Billion Dollars), the work culture is often dominated by individual agendas rather than a systemic procedural and process oriented approach.

The More Diverse the Organization, the Harder it is to Change it

Further, what complicates the efforts of change agents to actualize change in large and diverse organizations is that due to multiple levels of thought processes and differences in working styles and attitudes, more often than not, the leaders and the change agents are not on the “same page” as the rank and file managers and employees.

This often results in the Vision and Mission statements as well as important policies being merely platitudes and high-sounding statements without and relevance to the situation on the ground.

What compounds matters is when organizations are geographically dispersed meaning that whenever organizations operate in multiple locations worldwide, there is every possibility that the culture of the employees in specific countries often proves to be the resistance to change. For instance, take the case of the Mutual Funds and Wealth Management firm, Fidelity.

This firm which operates worldwide has often found that corporate governance in the United States is much different from say, in India or China, leading to acute problems in the way corporate governance is actualized in practice.

It also cuts both ways, as sometimes, what is actually happening in the India or China offices is often much closer to what the leaders want rather than in their own backyard where change is hard to implement.

Incentives and Securing Buy-In

This brings us to the point as to how change agents must win over the resistors and ensure that they have a “buy in” from all.

In this context, it needs to be remembered that management and leadership are all about managing situations and balancing competing agendas and interests as well as ensuring that there are incentives for everyone to participate. For instance, in most case of organizational change, rank and file employees often ask, “What is in this for me?”. Hence, change agents must ensure that everyone is motivated and sufficiently incentivized to participate in the change process.

Change is the Only Constant in Life

Lastly, organizational change must be actualized or implemented only after due diligence has been made about the relative success factors meaning that change agents must not rush headlong into introducing changes without studying and assessing the impacts as well as quarters from which resistance can occur.

This calls for a careful approach where the pros and cons are weighed, and the likely chances of the change succeeding are then assessed.

In addition, change agents must evaluate the readiness of the system to embrace change, and while disruption is sometimes good, often, it brings its own set of problems.

In conclusion, change agents, as well as every professional, must remember that “change is the only constant in life” and hence, one must not shy away from embracing it.

Role of Catalysts in Organizational Change

The other articles in this series on Change Management have listed the business imperatives for change as well as the various barriers to change that arise from internal and external resisters. In this article, we examine the other side of driving change and that is to do with the role of people who can act as catalysts in driving change.

Every organization has high performers and those who are steady as well as those who make up the bottom of the performance chart. Though it is not necessarily the case that the top performers are the ones who should drive change, more often than not, that is the case. However, there might be pearls waiting to be discovered as well.

The broader point that we are making is that management and the HR department must institute a program that would identify potential “change agents” who can act as catalysts for the change initiatives which the management might be planning.

Most organizations have lists of employees whom they consider “High Potentials” or “Fast Trackers” which indicate that the people in these lists are being marked for higher positions and they are groomed accordingly. In addition to that, the management along with the HR department can compile a list of people who take initiative in their roles and are not content with merely doing their assigned tasks but are proactive about trying on new ideas and concepts. These people are an asset to any organization and the management must identify such people and get them together to brainstorm about new initiatives and how to make the organization more successful.

The qualities that are needed in such change catalysts are impatience with the status quo, out of the box thinking, a different perspective than others about the strategies that the company is pursuing etc. When we mentioned that such people might not be necessarily the top performers, what we meant is that there might be employees at all levels who given the chance to change the existing paradigm may very well end up as the stars that the company needs. And when there is a need for change, such people turn out to assets that the company had undervalued all the while.

The point about the catalysts for change initiatives is that they have the personal attributes needed to motivate and inspire others to follow their lead. The key point here is that they would be people enablers and leaders as far as leading from the front are concerned. Plus, they would with their infectious attitude towards change be able to convince those who are skeptical about the change initiatives.

Hence, organizations need to rethink their system of rating the employees and include the change agent part of it and maybe, assign it more weight in determining the overall grade of the employee. Though this does not take anything away from the employees who are diligent and produce results, change initiatives can be driven only by a new way of thinking and hence non-linear thinking must be encouraged.

Creating Sustainable Change – How to create and sustain change ?

Who doesn’t like change and who doesn’t want to change? These are certainly truisms in the 21st century landscape where businesses proclaim their commitment to change and exhort their employees to “Be the change you want to see”. However, having a vision and mission statement that commits to change is different from actualizing the change. There are numerous examples of so-called “paradigm shifters” who have flattered to deceive. The best known example of this is the launch of Hotmail as the world’s first free web based mail service.

There was lot of hype surrounding Hotmail and its legendary founder, Sabeer Bhatia, became an icon of sorts. Now, a decade later, how many teenagers who have entered the cyber world in the last few years even know about Hotmail? So, the point here is that having a great idea is just the first step. And executing it to actually creating a shift in the way things are done is the next step. Companies often do step 1 and step 2 pretty well. You might very well ask what the problem is.

The problem is the sustainability aspect of change. Or, put another way: How to create and sustain change by not losing the momentum? This is the challenge that companies face in the contemporary world where your last performance matters more than anything else. So, investors and the general public eagerly await the new product launches and the “Next Big Thing” from Microsoft, Google or Facebook and are disappointed if the offering does not live up to their expectations. It is no longer the case that companies can ride on their reputations created over a legacy system. Now, they have to constantly innovate and do better or even do best each time they go to the market. With the ever shortening product cycle and the dwindling time to market period, companies are literally engaged in a “race to the bottom” as far as their competitors are concerned.

So, how does one sustain the momentum? The first thing to do is to create an atmosphere in the company or make the organizational culture “Change oriented” which makes automatic the process of listening to the market and responding appropriately. Next, invest in people who can be “change agents” and then make all efforts to retain them and nourish them. Creation of an organizational culture and nurturing change agents go hand in hand. The final step is to incorporate change into the organizational DNA so that change becomes a constant in the way the company does business. Taken together these steps represent the maintaining of the change process and building on the momentum created by the initial burst towards change. It needs to be remembered that sustainability is important not only from the environmental perspective but also from the organizational commitment to change. In conclusion, the “change game” ought to be practiced by companies if they are to remain abreast of the latest trends and to make the marketplace their own.

Top-Down versus Bottom-Up Change

It is often the case that companies are faced with a dilemma about whether the change initiatives must be driven from the top or they should be organic from the bottom up. This is especially the case with organizations that are growing in size where the increase employee base or the skyrocketing sales and revenues mean that the top management’s scope of control is more and hence driving change from the top alone might not just work. And for those organizations that initiate change from the top, they might find themselves in a situation where the middle and bottom layers of the organizational hierarchy may not be responsive or energized in the way the top managements wants them to be. So, the existential questions as to whether there ought to a spontaneous involvement from all the levels, or whether the top management must induce the change, are very real and need to be answered for change initiatives to succeed.

The answer as to which option is preferable depends on a number of factors. First, any change initiative would succeed only if it is communicated appropriately and to all levels. Honest, transparency and feedback loops must be the elements of the change initiative. Next, the employees ought to have a voice in the way the change initiative is managed.

For a change initiative to be successful the top management has to communicate and the employees have to respond. Like Bees gathering around honey and being driven by the Queen Bee, organizations have to ensure that while the CEO or the other top managers initiate the change, employees at all levels must take to the change as well. So, a mix of having the top management initiate the change and letting the employees take over from them works best for larger organizations where micro management by the top management might not work.

Examples of organizations that have embraced change successfully include 3M, Google and Facebook where the visionary leaders at the top ensured that the initial germ of an idea was seeded in the employees and then they let the trees grow by sampling nourishing them from time to time while at the same time preferring organic growth rather than transplanted growth.

The other extreme is marked by failures like HP where the top management was unable to make their employees buy into their change strategies. Of course, this is not to say that organizations need visionary leaders as essential elements of success. Though it helps, companies can make do with success if they have a combination of people enablers who take pride in their organizations and can empower the employees to participate in the change initiatives.

In conclusion, change can be driven solely from the top. However, for continued success, change has to come from within each employee and this can only happen in organizations that have an organizational culture that encourages each employee to contribute to the initiatives.

Change can thrive where there is an institutional catalyst and hence the key takeaway is that the organizational structures have to be built in such a way that no one individual can either make or mar the chances of success.

Fundamental Issues with the Top Down Approach in Change Management

Several change management experts have argued that Bottom Up Strategy for Change Management yields effective results comparatively over Top Down Strategy of Change Management.

The Top Down approach necessarily involves an element of compulsion, and the decisions are forced on the employees without taking any inputs from them. Top Down approach involves forceful implementation of change and in the entire process opportunities for gathering information regarding employee expectations, asking their feedback and suggestions are entirely disregarded or not given any priority at all. This gives rise to employee dissatisfaction due to a feeling of being ignored or undervalued, and equally good ideas of the employees are never aired.

A successful change management program must involve the participation and involvement of all the key stakeholders in the overall process, and the objectives should be made clear, the reasons for the need for implementing a change program must be well communicated along with its implications on the individuals, departments and also the organization as a whole. Without the support and involvement of the stakeholders, the program may be subjected to heavy resistance or opposition, a sharp decline in the motivation level and also the overall performance of the employees.

Communication Issues in Top-Down Approach to Change Management: In the case of Top-Down Approach, the business leaders are concerned about three elements only related with communication:

• Communicating about what they want people to stop doing.
• Communicating with the people about what they want the people to start doing.
• Communicating about what they want the people to continue doing.

In the case of top-down approach, the management is simply concerned about the above mentioned three key elements, without addressing the issue of why or the purpose behind the implementation of change. Explaining the purpose or the objectives to the employees is the central requirement in any change management program for obtaining the desired support from the employees and making the overall program a success.

However, top-down approach to change management under certain circumstances become a necessity especially during crisis situations when the management is expected to implement quick decisions and deliver fast results by implementing a rapid change.

In the recent years, since the businesses are undergoing rapid transformation and operating globally, there has been a shift in managing change management assignments by focusing more on strategic programs for propelling organizational growth and tapping new markets for improved business opportunities. Top down approach to change management has been criticized for being too paternalistic, and it ignores the value which an employee can add towards a change program.

Bottom Up approach can be useful for organizations which aim for steady growth, want to be innovative and wish to implement a program involving the support of all the key stakeholders.

Bottom-up approach will essentially enhance a sense of responsibility and accountability and may be beneficial in terms of improving the people’s motivation in making the change program a success. However, Bottom-Up Strategies take a lot of time and can never happen overnight. The process of change management requires careful planning, gathering information and feedback, conceptualizing a program and ensuring it’s successful implementation by receiving the desired support from all the key stakeholder.

Hence, it can be concluded that a balance may be required while implementing a change management program by assessing the existing organizational requirements and the objectives which are required to be fulfilled. For implementing quicker decisions and during a crisis situation, top-down approach may be best suitable, whereas, for the collective decision-making process and involving all the key stakeholders in the program implementation bottom up approach may be effective.

Role of HR in Change Management

This module has covered the various aspects of change management and the roles played by senior management as well as the CEO in top down change and the role of employees at all levels in bottom up change. This article looks at the role played by “support functions” in an organization in facilitating change. Specifically, it looks at the role that the Human Resources Department can play in supporting and enabling change.

Before we launch into the specifics of how the HR can facilitate change, it needs to be remembered that change management is first and foremost about people and their capacity to adapt to change. Since, the HR department is all about recruiting, training and monitoring employee performance; it has a key role to play in any change management program. There are different aspects in which HR can play a significant role and we shall consider some of them.

The HR department has to ensure that employees are motivated to undertake the change and participate in the change management program. For this to happen, they need to recruit the right people who can think out of the box and can bring a fresh perspective to the table.

Companies like Yahoo and Intel look for people who can think non-linearly and in unconventional ways. Once the right people are recruited, they need to be encouraged and mentored so that they act as “change agents”. This is the key element of a successful change management strategy and this is where the HR department has a stellar role to play. Many companies have a separate role for a “People Manager” wherein he or she has the responsibility of mentoring and nurturing talent. Some examples are Fidelity and IBM that have designated people managers who are apart from the line managers and so their primary duty is to ensure the enabling and empowering of employees who report to them in a dotted line fashion.

The point here is that the HR department must be encouraged to look for people who can act as catalysts for change and who can motivate other employees to participate in the change initiative. Since the HR department is staffed by people who have degrees in organizational and personal behavior, enlisting their help in driving change is a crucial element in the overall change management strategy.

Great companies have great leaders and great leaders are “enabled” and “energized” by highly supportive environments that nurture and reward talent. The last aspect of reward and recognition is the final element in a successful change management plan and if the employees who enthusiastically participate in change initiatives are suitably rewarded and adequately recognized, there is an added incentive for them to further the change initiative.

In conclusion, HR needs to be seen as much more than a supporting function and instead, must be viewed as integral to the organization’s change management strategy. Companies like the TATA group and Infosys are highly successful at change management because their personnel policies are employee friendly and are geared towards getting the best out of their employees.

Role of Innovation in Change Management

We have seen how various factors contribute to the propagation of change within an organization. For instance, change can be catalyzed through change agents and can be driven from the top as well as from the bottom.

In this article, we will look at the crucial role of innovation in driving change. For quite some time now, it has been known that companies need to innovate constantly if they are to stay ahead of the pack in terms of competitiveness.

Innovation can take many forms and some of them are discontinuous innovation, continuous innovation and dynamically continuous innovation. We shall discuss what each mean in the next paragraph. Suffice to say that unless companies innovate they cannot move up the value chain and unless they move up the value chain, they cannot remain competitive. So, to make changes to the organizational processes and its strategy, companies need to innovate constantly.

Innovation can produce sudden and dramatic changes to the way business is done and the way consumers experience changes to the products and services made by the companies.

This is the discontinuous innovation which is sudden and has a huge impact on the way the company goes about its business. On the other hand, innovation can be gradual and incremental which is the continuous innovation way which means that the company introduces refinements to its products so that consumers adjust and adapt in steps. Finally, there is the dynamically continuous innovation which affects the way in which the company adapts to changing market conditions and changes in consumer behavior trends to make a positive impact on the consumer psyche.

The point here is that no matter what kind of innovation the company adopts, the prerequisite for change management is innovation and without innovation, a company cannot expect its internal and external environment to be to its advantage. For instance, if Apple comes out with its new iPhone and disrupts the way in which consumers perceive a phone, it is discontinuous innovation. If Apple modifies its iPhone in a dynamic manner according to the changing customer preferences, it is dynamically continuous innovation. If it releases its iPhone after minor tweaks, then it is continuous innovation. For Apple to make a mark in the customer experience, it has to keep changing continuously and hence has to innovate constantly to keep abreast of the consumer trends and the competition.

An example of a company that constantly strives to be the best when it concerns change and innovation is 3M Corporation. This company is known for its world class innovation teams which drive change throughout the company and keep its consumers happy and its competitors on their toes.

The way in which 3M drives innovation to produce change is indeed exemplary and worthy of emulation. Hence, innovation should be the mantra for companies wishing to change their internal environments and in the process change the way they project themselves in the external marketplace.

In conclusion, we are living in times where the rapid turnover of ideas and products in the marketplace has reached a stage where it is no longer enough to be best in the class. Instead, the pursuit of excellence and the search for excellence are the hallmarks of a truly successful and world class company and hence all companies must undertake efforts to drive innovation and change within and without.

Are External Consultants Needed for Change Management Programs to Succeed ?

Many organizations take the help of external consultants in identifying, recommending and implementing change. This article looks at whether there is indeed a case to be made for external consultants to help with the change management programs.

If we look at the reasons why organizations rope in external consultants like McKinsey, BCG and Booze Allen group (among others) we find that they do so mainly because they need an independent and objective perspective on what needs to be changed and how it should be achieved.

For instance, companies like Jaguar, BP and Shell have all relied on external consultants to help them with their change management programs. And, they have been relatively successful in their efforts as can be seen in the way they have transformed themselves in the marketplace.

However, there have been notable failures as well. For instance, the Parry’s group failed spectacularly in its efforts to change its business processes and outlook towards the market. Despite taking the help of external consultants, the company could not transform itself. So, what is that differentiates whether external consultants succeed or fail to help companies in their change management programs. First, there needs to be cooperation with the consultant from the entire top management and not merely the CEO or a few directors/managers. The point is that the external consultants must not fall prey to the office politics and hence the entire leadership must stand solidly behind them.

Next, there cannot be any information that is withheld from the external consultants. The key to change is that complete information about the organization and its strengths and most importantly, its flaws must be visible and so the external consultants must have the full cooperation of the people who are responsible for implementing their recommendations. In fact, one of the reasons the CEO or the Board of Directors often take the help of consultants is that they need an objective view of the situation which is unbiased and not tinted by the prejudiced perspective of politicking employees.

The other aspect that makes organizations rely on external consultants is because these consultants have experience in dealing with companies in similar industries and hence can apply their expertise and experience to recommend specific changes. However, it is the case that consultants can get too close to the management to the point where they are compromised because of their proximity to the powers that be. Some examples of this include the Arthur Anderson and Enron saga where both the consultants (Anderson Consulting) and Enron became partners in swindling the employees and the people. Closer home, the way in which PWC or Price Waterhouse Coopers was a partner to the Satyam scandal shows that there are downsides to having consultants guide the companies.

In conclusion, consultants bring a fresh perspective to dealing with organizational issues and hence are vital to the change management program. However, there is a need to observe professional rules of conduct and there must be ethical behavior from both sides of the equation.

Why Change Management Programs Often Fail ? Some Ways to Actualize Change

We have heard the story several times. A large conglomerate wants to implement a change management program, which it then announces amidst much fanfare and hype. The top leadership waxes eloquent on the need to change and why the organization must actualize change. However, a few years down the line, things are still bad for the company and the change program has bitten the dust. What are the reasons for this? First, there is something called “change fatigue” that sets in when the change being instituted is part of a long string of change management programs that have been going on in the organization. Second, the resistance to change (a topic we discussed at length in previous articles) is the next reason. Third, the employees might have little faith in the top management and the confidence in the management team is at such a situation that the employees do not take anything that the management says seriously.

Therefore, the obvious question is what the management should do to actualize change. First, create an engaged organization where the buy-in for the change is secured deep and wide within the organizational hierarchy. This means that the “Sandwich Layer” of middle management and the key power centers in the organizations are on the same page as the management.

Second, have execution clarity, which means that the top management knows what it wants and how it should go about actualizing change. The message of change must be lucid and coherent and the senior as well as the other layers of management must think through the change process. Third, create a critical mass of “enabled leaders” who would carry through the change and who know what exactly the change entails and how to go about it.

Fourth, the senior management must realize that “in unity lies strength” and hence, must build a cohesive organizational culture that does not fray at the edges or is hollow in the middle. In other words, there needs to be a sense of purpose about the change process and how it must be actualized by all levels of management. Fifth and finally, the Project Management Office and the Governance structures responsible for change must articulate, implement, seek feedback, and close out the change process as well as plug any leakages. The important point to note here is that the PMO must be vested with full powers to implement the change and as happens with economies and politics, governance mechanisms in organizations must not be clogged. In other words, the organizational arteries must be clear and free from appendages. If these elements of the change management process are taken into account, actualizing the change would be relatively easy.

Finally, the whole point of the change program must be to engage with the employees at all levels and ensure that the change management program targets the core of the organizations competencies and vision and mission. In conclusion, change management programs can only succeed when these elements are conjoined together to create a coherent and understandable narrative that the employees can relate to.

Middle Level Management – Sandwich Layer and its Importance to Organizations

In previous articles, at many places, we have discussed how the middle management is in the unique position of actualizing change in organizations. We have talked about how the middle management needs to be brought on board for any meaningful change and how the senior leadership cannot alone get things going in any organization. The reason for the importance of the middle management is that they are the “sandwich” layer or the layer between the top management and the employees or the “boots on the ground”. In other words, the middle management is in the unique position of being placed in such a way that they have access to the top management and they can command the loyalty of the regular member’s employees. Hence, any organizational initiative has to necessarily take into account the importance of the middle management in the larger scheme of things.

Many organizational change initiatives fail because the top management would not have communicated the change imperative and the steps to be taken to actualize them to the middle management in a coherent manner. Moreover, the middle management would not have been brought on board or their cooperation and buy-in secured.

Hence, the primary imperative for any policy to be effective is that the managers must be driven to implement the same without leakage and friction. This is the reason many organizations conduct “offsite workshops” for the middle managers where they are explicitly told on what to do and how to implement the change. Further, the sandwich layer means that they can get feedback from the ground and pass it on to the top management. In this way, they act as the bridge between the top management and the employees on the ground.

The middle management is usually the layer that has the highest stakes in ensuring compliance with organizational policies. Appraisals and reviews are conducted by them and the bonus and the salary hikes are decided by them in consultation with senior management. Often, it is the case that the quantum of bonus or the salary hike for the regular member’s employees is decided based on the recommendation of the manager. Hence, the middle managers have to make sure that the employees are conforming to organizational policies as well as ensure that the senior management is made aware of the feedback from the employees. In this way, the middle management acts as conduit between the top and the bottom.

Of course, in many organizations, the middle managers are often played by the power centers and the vested interests because of intra-organizational politics. While not condemning this outright as this is inevitable in all organizations, the point needs to be made that the CEO and the executive leadership must keep a tab on such power plays and ensure that the organization does not suffer. The point here is that the middle management is often at the receiving end from both sides and hence, they are vital and at the same time, an often neglected factor in organizational success.

Bureaucracy and Organizational Change

The very word bureaucracy conjures images of sloth, inefficiency and status quoist mindset. To associate bureaucracy with change would thus be looked as an oxymoron. However, it is the case that some large organizations that were otherwise bureaucratic in their organizational structures managed to bring about change in the way they worked.

The best known example of this is the exemplary leadership provided by Lee Iacocca in his time at Ford and Chrysler, the auto majors in the United States. For the current generation, Lee Iacocca might be relatively unknown. But, for those who remember his extraordinary contributions to these organizations are aware of the way in which he turned them around in the face of stiff opposition from the bureaucracy. The book, Iacocca (an autobiography written by him) is a must read for those who want to implement change in large organizations.

If we look at the cases of large organizations where change did not succeed, we need not look farther than the governmental bureaucracies in all countries (especially India) where change is the farthest thing in the minds of the bureaucrats.

To give an example of a private sector organization that could not drive through change because of bureaucracy, we find General Motors and HP among the leading contenders. In both cases, the entrenched mindset which resisted any kind of change stymied the efforts of the leadership as well as those who wanted to bring about reform in these organizations.

So, what is it that makes some organizations better able to reform their bureaucracies and others fail to do so? For starters, the organizational structure is the key to implementing change management and the way in which it is designed is often the differentiating factor between success and failure.

The arteries of the bureaucratic organizations tend to get clogged with time leading to institutional resistance to change; next, the way in which the business imperatives are defined is crucial to making the employees buy into the change initiative. For instance, if the employees feel that change is being driven because of the personalities of the leaders and not necessarily because of the need to make more profits or respond to competition better is a major put off when change initiatives are launched.

So, the bottom line is that the structure as well as the people making up of the parts of the organization needs to be changed first if lasting and permanent change is to be achieved in the organization. Finally, the way in which change is communicated internally to the employees makes a lot of difference in the way the change program is implemented and determines the success or otherwise of the initiative.

The top leadership must be honest and truthful in their communication to the employees as far as telling them about the business drivers for change. In most cases, top leadership talks about change as though it is their pet project driven solely by ego and personal interests. Only when employees believe that the change program is needed because of valid and relevant business factors can there be an acceptance and buy in of the initiative.

Change Management in Family owned Businesses versus Professionally run Companies

Is it easier to drive through change in family owned businesses or professionally run companies ? This is a question that is uppermost on most management experts’ minds as change in any organization is hard to achieve and if there are barriers that are institutional or structural then it becomes harder to drive through change. For instance, many family-owned businesses like the TATA and the Reliance Group often have charismatic and visionary leaders who are drawn from the family that has a controlling stake.

On the other hand, professionally managed companies like Unilever and P&G are run by managers who need to answer all the stakeholders apart from those who have a majority stake in the company. So, the point is that it is easier for a leader who has to answer to fewer stakeholders to drive through change as opposed to a manager who has to take into account the needs of many stakeholders.

This is the reason that Reliance has been hugely successful in implementing visionary and unique change programs over the course of the last few decades whereas other companies have had moderate successes in driving through organizational change. Of course, Infosys is the exception as the company runs on an owner-manager basis where the major stakeholders run the company professionally instead of like family business manner. This accounts for the phenomenal growth of the company over the years where its visionary leaders were able to carry all the stakeholders with their business acumen and entrepreneurial spirit. On the other hand, companies like Unilever and P&G often take their time to drive organizational change because of lack of commitment from the managerial class or due to the absence of a motivational leader who holds a stake as well.

The point here is that when the combination of a visionary leader with substantial stake arises, and then there is the double whammy of vision and votes on the board which make it easier for the organization to drive through change. Of course, the flip side is that the change program might fail because it is not well rounded or comprehensive and just relies solely on the leaders’ abilities. On the other hand, it is common to find companies like Unilever and P&G institute organizational change that is lasting and comprehensive mainly because of the various levels the change management program goes through before acceptance.

It is clear that for effective change to be institutionalized, the change management program must have a blend of vision and nuts and bolts depth which comes if the leader can also succeed in getting the change program vetted by all the stakeholders. Hence, companies like Infosys and to a certain extent the TATA group have managed to drive through change that is both cutting edge and has sufficient depth. However, this is not to say that either family businesses or professionally run companies have a grip over change management. Just that in the case of the former, it is easier to get buy in whereas in the case of the latter, the change management program has to go through several layers of approval.

In conclusion, companies that have visionaries who can carry large sections of the organization along with them often succeed in driving through change better than companies that are bureaucratic or whose organizational arteries have become clogged due to inertia and slowness to adapt to the marketplace.

Change is the only Constant in the 21st Century

The business landscape of the 21st century is characterized by ever changing trends and events that happen with so much rapidity that they take most business leaders by surprise. Considering the high turnover of ideas and fads, it is no wonder that companies’ and their offerings in terms of products and services fail to click in the marketplace more often than not. Given this background it is not surprising that business leaders often throw up their hands in despair at this flux and uncertainty that affects the way their companies operate. Hence, it would be fair to say that the only constant in this century is change and companies and the leaders who lead them should be prepared to deal with change that is rapid and sudden at the same time.

We have discussed how innovation can take several forms ranging from slow and gradual improvements to sudden and discontinuous change. The bottom line for many companies is that they have to innovate to just stay ahead of the competition and it is no longer enough or sufficient to roll out a product a year or an improved version every now and then.

Such is the pace of change that companies like Apple and Google often release products and version along with software every few months so that customers are always a click away from the latest version. Given this high rate of change, it is not surprising that the legendary Bill Gates of Microsoft himself is unable to keep up with the torrent of new products and services that dominate the software landscape. Indeed, it is ironical that Bill Gates who is the author of the bestselling “Business at the Speed of Thought” is somewhat anachronistic in this hyper speed age.

On the other hand, the future belongs to people like Mark Zuckerberg of Facebook who comes up with innovative and market shattering ideas so often that most commentators wonder about how he and his team can do it so often. It has been said that companies need to change internally and externally with such agility that the name of the game is change. And this is what Facebook does with its approach towards new product launches that surprise the stock markets and impress the users. Another company that has made a habit of constantly changing and keeping ahead of the competition is Intel which has so far managed to remain as a leader in its own right despite being around for a long time and in spite of its size.

The point here is that the Millennial Generation measures time by the nanoseconds and hence, they are in constant need of new products and services. And this is something that marketers and companies ought to recognize when they devise products and services for this generation. That is precisely what the companies mentioned above have been doing. Considering the shift in emphasis away from manufacturing towards services and application development as opposed to basic product development world over, it is time for companies to realize that the need for innovation and the speed at which they innovate remain the critical success factors to succeed in the marketplace of the 21st century. In conclusion, it is no longer the case that companies work 12 hours a day to keep up with the competition. Instead, those companies that can leverage the 24/7 culture and embrace the change wave would succeed.

Different Types of Change

Happened Change

This kind of change is unpredictable in nature and is usually takes place due to the impact of the external factors. Happened change is profound and can be traumatic as it’s consequences are unknown and out of direct control. This kind of a change happens when an organization reaches the plateau stage in its life cycle and gets victimized by the environmental pressures or demands. For example, currency devaluation may adversely affect the business of those organizations who have to depend upon importing of raw materials largely. In certain cases, some political, as well as social changes, are unpredictable and uncontrollable.

Reactive Change

Changes which take place in response to an event or a chain of various events can be termed as Reactive Change. Most of the organizations indulge in reactive change. This kind of change usually occurs when there is an increase or decrease in the demand for company’s products or services. It can also be a response to a problematic situation or a crisis which an organization may be faced with. For example, due to the advancements in technology or growing technological changes, an organization may be forced to invest more in technology to stay ahead to face the stiff competition. Recreation can also be regarded as a reactive change, which involves the entire organization and occurs during the stage when an organization is undergoing a serious crisis.

Anticipatory Change

If a change is implemented with prior anticipation of the happening of an event or a chain of events, it is called as anticipatory change. Organizations may either tune in or reorient themselves as an anticipatory measure to face the environmental pressures. Tuning in essentially involves implementing incremental changes which mean dealing with the subsystems individually or just with the part of a system. Reorientation essentially involves changing the organization from the existing state to a desired futuristic state as an anticipatory measure and then dealing with the entire process of transition.

Planned Change

Planned change is also regarded as the developmental change which is implemented with the objective of improving the present ways of operation and to achieve the pre-defined goals. Planned change is calculated and is not threatening as in this the future state is being chosen consciously. The introduction of employee welfare measures, changes in the incentive system, introduction of new products and technologies, organizational restructuring, team building, enhancing employee communication as well as technical expertise fall under the category of Planned Change.

Incremental Change

Change which is implemented at the micro level, units or subunits can be regarded as incremental change. Incremental changes are introduced or implemented gradually and are adaptive in nature. It is based on the assumption that these small changes will ultimately result in a large change and establish the basis for forming a much healthier and a robust system. It even offers an opportunity to an organization to learn from its very own experiences and create the adaptive mechanisms for meeting the ultimate organizational vision. The extent of damage due to a failed incremental change effort is expected to be much lesser than the change which is implemented on a large scale or introduced universally.

Operational Change

This kind of change becomes a requirement or the need when an organization is faced with competitive pressures as a result of which the focus is laid more on quality improvement or improvement in the delivery of services for an edge over the competitors. Similarly, changes in the customer’s buying patterns or demands or the internal dynamics of an organization equally necessitate the implementation of operational change. Operational change as the name implies means introducing changes in the existing operations for realizing the intended goals. This may include bringing in changes in the current technology, improving/re-engineering the existing work processes, improving the distribution framework or the product delivery, better quality management and improving the coordination at an inter-departmental level.

Strategic Change

Strategic Change is usually implemented at the organizational level, which may affect the various components of an organization and also the organizational strategy. A change in the management style in an organization could be considered as an example of strategic change. A multinational organization like Toyota has taken a step ahead in bringing in a change in the overall organizational philosophy for availing the advantages of being a leaner organization structurally, flexibility, decentralized decision making and functioning of organizations and equally allows a greater extent of freedom or autonomy in implementing proactive decisions. This kind of change is expected to have a cascading effect on the entire organization and accordingly would be having an influence on the overall performance.

Directional Change

Directional change may become a necessity due to the increasing competitive pressures or due to rapid changes in the governmental control or policies, which may include changes in the import/export policies, pricing structure and taxation policies, etc. Directional change can also become imperative when an organization lacks the capability of implementing/executing the current strategy effectively or during the circumstances when a strategic change is required.

Fundamental Change

Fundamental Change essentially involves the redefinition of organizational vision/mission. This may be required during extremely volatile circumstances like volatility in the business environment, failure of the leadership, a decline in productivity as well as the overall turnover or problems with the morale of the employee.

Total Change

A Total Change involves change in the organizational vision and striking a harmonious alignment with the organizational strategy, employee morale and commitment as well as with the business performance. Total Change becomes a requirement during those circumstances when an organization is faced with many criticalities such as long-term business failure, incongruence between the employee and organizational values, failure of leaders/management in anticipating the realities of business environment or the growing competitive pressures and concentration of power in the hands of few. A new organizational vision along with major strategic changes as well as complete organizational surgery can be the only solution at this point of time.

What is Strategic Change ? – Meaning and its Theories

What is Strategic Change ?

In response to the fast changing and fluid marketplace and industry landscapes, many management thinkers came with theories of strategic change. The first among them was the legendary Peter Drucker who coined the term Age of Discontinuity to describe the way in which disruptive change affects us.

In Drucker’s model, the four sources of discontinuity are globalization, cultural pluralism, knowledge capital, and new technologies. The main idea behind this theory is that extrapolating into the future by using the existing models is ineffective as the rapidity with which change was barreling down on corporations made all models redundant within no time. Instead, what Drucker proposed was that firms explore the drivers of change and strategize according to which aspect was most likely to affect the firm in the future.

Future Shock

Another management thinker, Alvin Toffler, came up with an idea about the intersection of different paradigms and the accelerating rates of change and their impact on businesses. He used the term Future Shock to describe how the changes in technology, move towards globalism, resource constraints, and finally, the shortening of time itself were akin to the future arriving even before one could prepare for it and hence he likened human civilization being shocked by the future.

In recent years, Malcolm Gladwell, used the term Tipping Points, to describe the phenomenon of trends acquiring critical mass and then taking off to impact business and society in the process. In addition, Gary Hamel postulated the concept of Strategic Decay to explain how the value of each strategy decays over time irrespective of how brilliant the strategy was in the first place. What these thinkers were attempting is to explain how change is the only constant and hence, businesses ought to be prepared for anything to happen and hence must strategize and build their business models accordingly.

Strategic Change in the Real World

After the discussion on the theorists and their ideas, it is time to consider how strategic change is actualized in the real world. The example of Nokia which was one of the leading makers of the mobile handsets till a few years ago and which now finds itself at the bottom of the heap along with Blackberry reminds us that the strategic drift occurs without anyone noticing it and by the time it is noticed, it is too late. On the other hand, the collapse of once famous companies like Chrysler point to the transformational change that is sudden and radical in nature.

The key aspect about strategic change is that it is difficult to predict and control. Hence, the optimal way to deal with it is to expect the unexpected and be ready for anything. Unless companies embrace change, they are likely to be fossilized and unless companies prepare to deal with sudden, unpredictable, discontinuous, and radical change, they are likely to go the way of the dinosaurs. Finally, many companies proclaim that they are changing whereas it is superficial and the world comes to know later on that their change models were neither broad nor deep.

Change Management: Why the First 100 Days Targets are a Myth ?

How often we hear of business leaders and CEO’s who have just taken over proclaim that they would undertake radical change in the first 100 days? How often do we also hear politicians and other personalities promising the moon within the first 100 days? Of course, we don’t get to know how many of these changes have transpired in reality since by the time the first 100 days are over, we would have moved on to other matters.

The point here is that in this 24/7 culture of constant change, the temptation to set ambitious targets to achieve the goals within a short time is indeed something that even the most realistic of leaders cannot resist. However, there is a certain limit to which such announcements and agendas for change can be actualized as real world problems, be it in business or governance, are hardly going to be solved within short periods.

The misconceptions surrounding the first 100 days achievements for change and realization of goals should be rightly called so as it is often difficult to actualize change within such a short period of time.

For instance, it takes time to build a team that would be in consonance with the CEO’s vision and mission. Often, building a team with those who are comfortable with the CEO and vice versa takes time. Next, the on the job performance of any CEO cannot be measured within the first 100 days as the lingering issues from the past leaders or the previous CEO would continue to cast a shadow over the CEO’s performance. Though in politics, it is easy to blame the previous dispensation, it is not often the case that we hear CEO’s blaming the previous management since there is certain continuity in the business world in the transition process.

The other aspect or the myth is that CEO’s can get down to business the moment they take over. It takes months and even years of patient effort for the fruits to ripen and show results and hence, new CEO’s often have to prove their mettle. This means that they need to have an extended run in their position for them to actualize change.

The reason for the 100 days myth is that business leaders like politicians have a “honeymoon” period once they take over where their employees and constituents are willing to tolerate them during this time and hence, give them a breather before they become demanding. Therefore, it is often tempting for the business leaders to set ambitious targets for the first 100 days. Without discounting the importance of this imperative, it needs to be mentioned that having unrealistic expectations from the new CEO would be self-defeating.

Finally, change is glacial and the profound slowness with which change is actualized means that there has to be a mutual communication between the CEO and the employees that is grounded in base expectations and is contextual in nature. Only then would the floors of the company not be littered with the broken glass from the ceilings of euphoria and hyperbole.

Between Two Paradigms: The Changing Role of Management

From the Smokestack Era to the Digital Era

The role of management has changed over the decades as the paradigm shift from manufacturing to services and then to the emerging view of organizations as a holistic whole interacting with its environment in a symbiotic manner. This paradigm shift has engineered and engendered a corresponding shift in the management thought and practice. For instance, it is now common for management experts to stress on the organization and its interaction with its environment as opposed to a machine like organization that is standalone and functions on its own. It has also changed the importance given to employees who are now treated as key sources of competitive advantage rather than yet another factor of production.

The changing management paradigm has come about mainly because of the change from the “Smokestack” era to the “Digital Era” which means that the industrial paradigm is giving way to a conception of the organization as part of a system as well as information replacing machines as the central pivot around which organizations function. In other words, the industrial organization that is characterized by the smokestack or the picture of factories and plants manufacturing goods and services has now given way to companies that use computers and the digital highway to perform their activities.

Consequences of the Paradigm Shift

This changing paradigm has been concomitant with the increasing globalization of the world economy, which has meant that corporations now operate across the world rather than in their own countries. This means that managers and management need to adopt a global outlook and at the same time execute the functions locally, which has given rise to the term, “Glocalization” that has been popularized by the noted expert, Thomas Friedman. The paradigm shift has also resulted in organizations adopting CSR or Corporate Social Responsibility and embracing diversity, which means that social and environmental concerns apart from inclusivity and tolerance are the buzzwords for managers.

Further, the rise of the Knowledge Worker means that information has become the raw material that is transformed through the organizational processes rather than physical resources that are transformed through machines. Of course, this is not to say that manufacturing is dead. Rather, the point here is that the services sector that includes the IT and financial services commands the lion’s share of the economy when compared to manufacturing. This has also meant that the emphasis on machine like bureaucracies has given way to systems approaches to management as the shift from manufacturing to services means that organizations are flatter, leaner, and fit than their predecessors.

Organizations of the Future

The paradigm shift from the mechanistic model of organizations to the systems view has also meant that the organization of the future would be a shape-shifting one that has the ability to adapt to new market conditions quickly and rapidly than before. The advent of the internet and the increasing use of social media have meant that organizations can no longer have the luxury of taking their time to respond to market conditions and instead, the fastest, cheapest, and most innovative product wins in the market. This has again resulted in a shift from managers as bureaucrats to that of an individual who empowers and enables the workforce. The point here is that the rigid rules prescribed by management experts of the 20th century no longer work in the workplace of the 21st century where management is expected to be more innovative, inventive, and creative if it has to ensure that its companies stay ahead of the pack.

Concluding Thoughts

Finally, the paradigm shift has also meant that more women are present in the workforce and the composition of the workforce is more diverse. This means that management can no longer be an old boys club and instead has to shatter the glass ceiling to ensure that everybody has a chance to make it to the top instead of a few.

Exponential Change and What it means for Businesses and Workers

Who Remembers these Companies ?

Businesses, workers, and governments worldwide are feeling the effects of dizzying change wherein trends that are apparent at the moment are no longer the same in the future even when the future one is talking about is a few years ahead or even a year or so. Consider for example the marketplace where businesses that were once dominant as recent as a decade ago are no longer in the reckoning and worse, some of them have even dropped out of the race altogether.

For instance, Blackberry was the original Smartphone that captivated the attention of millions of customers worldwide with its innovative approach to the entire mobile telephony and computing experience. Now, does anyone outside of the small and ever dwindling customer base even use Blackberry Smartphones? This is what the late legendary Steve Jobs of Apple did to the Smartphone market by radically altering what one can do with a Smartphone.

Similarly, a decade ago, Nokia which was the pioneer in the mobile handset market is no longer to be seen anywhere because of the revolution in mobile computing as well as the advent of the Smartphone revolution wherein a mobile phone is just not a phone but something which is a portable and mini computing machine, personal assistant, news conduit, and entertainment provider all rolled into one.

There are other examples from the online and the mobile world in addition from social media world. Consider the example of Orkut which was the original social media site and was the pioneer for a generation of social media and internet users. With Facebook becoming almost like an extension of one with its radical remaking of what it means to socialize and network in cyberspace, the paradigm has shifted and the game has changed.

What is Exponential Change ?

So, what is causing all these upheavals in the marketplace wherein technology is rapidly advancing to the point that major research consultancies are warning that jobs starting with the shop floor worker to even white collar professions such as Doctors and Lawyers would soon be replaced with automated software and robots? The single driving force behind all these trends is what is known as Exponential Change which means that change is no longer linear but proceeds in an exponential manner leading to all round disruption and creative destruction.

To explain exponential change, many experts use Moore’s law of processing power as the theory behind this immense and bewildering change. Moore’s law states that processing power doubles every two years. This means that if you own a 1 GHZ processor now, in two years, it would become 2 GHZ and in four years it would become 4GHZ. Just pause for a moment and think what would be the processing power 10 years and 20 years down the line. Indeed, we might even reach Terabyte speeds in a decade or two since it is no longer linear but exponential.

A Closer Look at Exponential Change with Examples

The reason we are stressing on the word exponential is that when processing power and by extension technological capability doubles every two years, what we get is a multiple and to the power change which means that what we have now is miniscule when compared with what we would have in the future. Indeed, an average Smartphone now (we are not even talking about iPhone 6s or any of the high end models) has more computing power than the entire power of what the Astronauts who landed on the Moon had in their spacecraft.

Implications for Humans

Therefore, the implications for humans are staggering as we would soon end up in a scenario where machines do most of the work and only the higher level decision making and guiding and programming the robots and the machines would be done by people. There are many technocrats who point to the fact that exponential change is beneficial to society since technology can solve many of society’s problems as well as empower people.

However, this also has the other side wherein businesses can no longer hope to execute the same strategies that they were following even a few years ago. Further, governments can no longer think about going about in their slow and bureaucratic ways wherein it takes years and decades for change to be apparent. Indeed, the process of breathtaking exponential change would soon leave those who cannot change with the times breathless.

Disruption is the Future

Returning to the introductory point, this dizzying speed of change means that disruption would become the order of the day and any entity whether we are talking about workers or businesses or governments would have to reorient themselves quickly, in an agile manner, and be on top of the cutting edge trends if they have to survive exponential change brought about technology and globalization.

Do not Fear the Future but Instead, Learn to Embrace the Changes

Finally, the intention here is not to scare readers or oppose the technology driven change. After all, when the Industrial Revolution commenced, there were many who had such thoughts and who organized protests and strikes against the original revolution in technology. With hindsight, we can now see that the Industrial Revolution did usher in unprecedented prosperity and wealth to many including many who were lifted out of poverty both in the developed as well as the developing world.

Therefore, our concluding note is that one must not fear the future but prepare as best as one can to anticipate, adapt, and adjust to the changes. The alternative is that those who cannot adapt to change would be like the proverbial Dodo or the Dinosaur that became extinct.

Transactional vs Transformational Leadership in Change Management

Leaders play a crucial role in steering organizational change and inspire or stimulate people for achieving excellence at work by realizing the pre-defined goals. Effective leadership provide a direction and vision to the people from top to bottom, develops a conducive culture, climate and values for enabling certain expected code of conduct or behaviour out of employees.

Leaders conceptualize and administer suitable strategies for driving continuous improvement in the existing processes, motivating employees for superior performance and facilitating change across various functionalities.

Leaders play both transactional as well as transformational roles depending upon the organizational context, environmental factors and the long term objectives.

Transactional Leadership

Transactional Leaders work in accordance with the predefined modes of operation and are more concerned about ensuring a continuity in the day to day functioning, ensuring seamless operations by establishing systems and processes in place and focused towards achievement of set targets. Such leaders can enforce disciplinarian actions, establish a systemic framework and define a road map of action, formulate & implement policies and motivate superior performance through a systems of rewards and incentives.

A Transactional Leader is not concerned about the futuristic vision or strategies for acquiring market leadership, but is more concerned about ensuring that the tasks assigned are completed on priority by meeting the quality benchmarks.

Transformational Leadership

It would be more appropriate to say that the Transformational Leaders are the real champions of change. They are the visionaries who influence or motivate teams for achieving excellence in business performance. Transformational leaders give more importance to the development of cohesive teams and facilitate an environment of collaboration for achieving the next best level of performance, instead of ensuring the completion of day to day organizational duties/tasks. The focus is more on team building, empowerment of employees, alignment of individual-organizational goals and culture building for motivating individuals to embrace the change for the better.

Given below are the key functions performed by the Transformational Leaders:

• Creating a Vision: Transformation Leaders are responsible for envisioning and ensuring that the vision is shared and communicated across all the levels to inspire and motivate people for driving excellence at work.
• Setting Examples or Modelling: Transformational Leaders inspire employees through Modelling or exemplification of good behaviour or a desirable code of conduct.
• Establishing Standards: Well defined standards and norms, guide the employees in following a desirable pattern of behaviour and working towards the fulfilment of common goals through a collaborative approach.
• Culture & Climate Building: Building a facilitating climate and a culture of mutuality, interdependence and flexibility are the major functions of Transformational Leaders. A conducive organizational culture can motivate individuals for delivering performance excellence and exceed expectations by achieving newer milestones at work.
• External Communication and Liaising: Transformational Leaders establish a connect with the external world and are the main point of contact for communicating with the key stakeholders for the resource support, technological assistance and acquire knowledge regarding the best business practices of leading organizations. This function essentially involves strengthening relationship with the stakeholders or business partners.
• Team Building or Synergy: This is one of the most important functions of leaders who follow transformational leadership style by building a motivational climate and creating a positivity in the work environment for completing tasks collaboratively.
• Talent Acquisition & Development: This is the key responsibility of the transformational leaders, which involves identification of the best of the talent pool and nurturing them with adequate training & development support.

Transformational Leadership: Advantages and Disadvantages at work

Advantages:

• Transformational Leadership style encourages innovation and creativity in the workplace by creating an enthusiastic and a challenging work environment. This kind of leadership provides ample opportunities to the individuals for growth and achieving newer performance milestones.
• New Leaders may evolve out of a several followers.
• Transformational Leaders are visionaries and they possess an extraordinary capability of communicating the vision to the followers. Since, such leaders are more skilled in visualizing the bigger picture, they can address challenges much efficiently.
• The team members work for the achievement of a common goal or vision by being influenced or inspired by their leaders, thus driving excellence at work.
• Transformational leadership encourages mentor buddy relationship between the leader and the follower, thus creating a conducive environment for innovation and improves organizational preparedness for any kind of change process.
• Transformational Leadership brings reforms in the existing processes, creates higher expectations in followers and motivates the followers to deliver beyond the pre-defined expectations or the set framework.
• Transformational Leadership surely guarantees high performance of the teams as well as superior productivity and growth.

Disadvantages:

• Though Transformational Leaders can see the bigger picture, but they lack detailed orientation for which they require the support from the transactional oriented people who are more organized and detailed oriented. Lack of detailed orientation may result in a major oversight, which may ultimately affect the organizational interests in the long term.
• Transformational Leaders rely too much on inspiration, passion and emotional aspects, which may lead to a neglect of the facts or realities through research, investigation or information gathering.

Examples of Best Practices of Transformational Leaders in Business

Transformation in Technology: Various Technology giants like Apple, Microsoft, Intel, IBM and many others, revolutionized the computing world through technological innovation by introducing state of the art quality software applications and microprocessors. Even the world of internet has witnessed a change in the contemporary scenario with Google enjoying its leadership as the most effective search engine and Amazon & e-Bay leading the e-commerce platform.

Transformation in Financial Services Industry: Due to the internet revolution, the financial services industry is undergoing a sea change with the availability of online platforms for the investors for planning their investments independently, researching, trading stocks and investing in various financial products by being in any part of the world. Pioneers like Peter Lynch, proponent of Mutual Funds and John Bogle, proponent of Index Funds, changes the attitude and preference of the investors on various financial portfolios. Today, Mutual Funds and Index Funds have become the most preferred choices for the investors because of the low costs involved and diversified benefits.

Diversification: In the era of globalization and liberalization, the organizations follow diversification strategy for business expansion across the globe and maintaining a leadership edge in the competitive market. Leaders like Jack Welch, the CEO of General Electric during 1980s, restructured the entire organization from the traditional bureaucratic set up to a more agile and lean framework.

Other Examples include Business Process Outsourcing and Knowledge Process Outsourcing which has resulted in generation of cost advantages for the organizations and enhanced business efficiencies, increased job opportunities for millions of people across the world and revolutionized organizational functioning as a whole. Again quality tools and processes like TQM, Kaizen, Six Sigma, etc have led to continuous improvement in business operations and achievement of superior quality benchmarks in manufacturing practices.

Organizational Learning and Change Management

Over a past few decades the concept of “Organizational Learning” has acquired increasing importance, due to rapid changes in the business environment and increasing competition. An extensive review of the Literature stresses on the fact that the organizations which build their learning capabilities can enjoy a leadership edge in the competition, can remain innovative and significantly improve their top line as well as bottom line profitability. In 1990, Senge in his seminal book “The Fifth Discipline”, provided an elaborate coverage on the core disciplines which contribute towards building a learning organization and those are shared vision, learning of teams, systemic approach, personal mastery and mental models.

Organizational Learning can be interpreted in terms of a continuum from progresses from the stage of no learning to the complete learning stage. No learning stage is characterized by rigidities, insensitive approaches or closed attitude towards sharing of realities and experiences. While, on the other hand, full learning stage characterizes openness, flexibility and adaptability towards the changing events or experiences. There are several forces or mechanisms which contribute towards establishment of learning organizations.

Elements of Organizational Learning

• Organizational Learning is an ongoing process which produces everlasting changes in several areas as a result of integrated initiatives.
• Organizational Learning involves three main subsystems: The first subsystem is acquisition of new inputs and its analysis. The new inputs may include any change within the organization, changes in the organizational structure or technology. This stage characterizes innovation in the organization.
• The second subsystem is involves retention of the newly acquired input and the successful retention would largely depend on how effectively the new input is integrated with the existing processes. This subsystem can be regarded as the implementation stage of Organizational Learning.
• The third subsystem involves stabilization and usage of the newly acquired inputs in the day to day processes of an organization.
• Organizational Learning results in improving capabilities of an organization for further learning on its own.

Mechanism for fostering Organizational Learning: This can be analysed in five different categories

1. Organizational Flexibility and Experimentation: Flexible organizations have improved capabilities in addressing the problems or issues by identifying newer alternatives or various possible solutions. Organizations which remain open for experimentation and trying out newer methodologies, enjoy an edge in the competitive battle and are more profitable. For promoting organizational flexibility and experimentation, the following mechanisms may be used:
   • Invite experienced practitioners or experts who have met success at work by implementing change in the organization. Ask them to share their experiences with a few selected representatives of the organization.
   • Encourage employees to use their problem solving abilities for addressing various issues and apply their creative mind for tackling various problems, even if they may not get success every time.
   • Provide positive reinforcements in the form of rewards to the people who use new approaches for solving a problem and achieve success in it.
   • Review performance periodically and hold periodic meetings for sharing the objectives and experiences, successful initiatives and outcomes of various experiments.
   • Organize seminars and workshops for raising awareness on the new changes and successful initiatives.
2. Team work and Mutuality: Team work and mutuality is one of the major pre-requisite for promoting organizational learning. The following mechanisms may result in establishing an environment of collaboration, mutuality and team support:
   • Sharing of experiences, new ideas and innovative approaches both within the organizations as well as with other organizations.
   • Create task forces for realizing mission critical goals, implementing new projects and reviewing the project success and for communicating a shared vision to the employees of the organization.
   • Review the progress of new initiatives or projects by holding periodic meetings headed by the top or senior management officials. Top management can play a crucial role in integrating objectives, building internal synergies and fostering a collaborative environment for implementing change successfully.
3. Contingency and Incremental Planning: A contingency approach to planning or incremental planning foster organizational learning. Contingency planning improves organizational preparedness in identifying alternative solutions for proactively addressing problems of varying nature. The mechanisms can lead to contingency planning:
   • Detailed plans reflecting the contingent approach can be prepared. Time bound goals can be defined, but should equally include the best possible alternatives.
   • Learning gets reinforced if new initiatives are integrated with the existing processes or practices.
   • Record the learnings derived from new experiences and continuously review performance and improvements which take place as a result of effective planning.
   • Create task forces and encourage groups to identify alternative approaches and solutions for implementing a change.
4. Competency Building: Organizational Learning requires strengthening of desired competencies, which can be done in the following ways:
   • Competency building can be done by inviting experts or practitioners for sharing their experiences or best practices and encouraging people to endorse change.
   • Organizing seminar programmes and representing employees for participating in external trainings for acquiring new skills or competencies.
   • Creating task forces for communicating shared goals to the people involved in the change process, implementing pilot projects for achieving pre-defined change objectives in several areas as per the plans of the top management.
5. Establishing Temporary System: Temporary systems in the form of task forces or groups or pilot project groups are formed with the objective of achieving quick outcomes/decisions involving various aspects of change. The advantages of temporary system have been provided below:
   • Diverse viewpoints or decisions can be obtained from the members representing cross functional, interdepartmental and inter-regional backgrounds.
   • Time bound objectives can be fulfilled as a result of which the tasks can be completed faster.
   • Temporary system facilitate objective oriented approach for addressing the problems of diverse nature.
   • Temporary system encourage risk orientation and independent outlook for solving complicated issues.
   • Temporary systems are a flexible framework which can be created or dissolved as per the changing requirements.

Organizational Vision, Mission, Strategy and Change Management

Organizational vision & mission, provide a sense of purpose or establish the the reason of existence of an organization. According to Sullivan & Harper 1996, a well-defined organizational vision establishes both long term and short term goals, empower and motivate leaders as well as followers in implementing change and strengthening their adaptive mechanisms for staying ahead in the competitive race.

In the opinion of Goodfellow 1985, change is a universal phenomenon and pervasive in organizations. The need for change management arises from the environmental forces which can be both internal and external in nature. Vision should be realistic and realizable most importantly with the integrated efforts and support from across all the levels of the management as well as the entire team. Visioning is one of the key functions of Transformational Leaders and essentially involves 4 key processes: Creation of Vision, Communicating the Vision, Committing People for working towards the realization of vision through effective and dynamic leadership and lastly involves concretization of vision by taking risks, planning and implementing detailed action plans for translating the vision into a reality.

According to Parsons 1960, should pay attention to 4 key factors for surviving in the competitive environment;

• change
• goals
• coordination
• organizational culture

For achieving a competitive advantage, leaders should proactively respond to the changes in the strategic environment, create opportunities for both internal (employees) as well as external customers and build a culture of achievement focused on vision and mission of the organization.

For surviving in an uncertain, highly volatile and competitive environment, change becomes inevitable and an indispensable need for the organizations. Powerful environmental forces are continuously forcing both private and public organizations to make alterations in the permanently existing policies, practices and organizational structures (Bolman & Deal, 1991). One such example of the environmental force is Globalization, which has increased the level of competition and demand for talent pool, created a need for diversity management and implementation of standardized practices across the subsidiaries as set up by the central headquarters. Another example of environmental pressure is Information Technology. IT has increasingly revolutionized the organizational style of functioning, facilitated a transition from the centralized functioning to a more decentralized style of functioning. The other forces are demographic changes, economic deregulation, etc. The environmental forces can be classified into external and internal environmental factors.

An assessment of external environmental factors must include an assessment of the competitive trends, changes in customer’s preferences or their habits, market/industry analysis, environmental analysis, socio-political analysis, an analysis of the government policies and technological advancements. For gaining a competitive advantage and being a leader in the industry, organizational strategies should be so developed that it offers ample scope for taking advantage out of the external opportunities and avoid or minimizing the negative outcomes of external threats. External factors are not within the control of an organizations, they can only adapt with changing circumstances through strategic interventions.

For example, recent developments in the field of communication technology, have created newer opportunities for the workforce, changes in the way of working through virtual conferencing, telecommuting and traditional hierarchical organizational structures are being substituted with more flat structures.

Internal environmental factors involve an assessment of the internal strengths and weaknesses of an organization which might include an assessment of the organization’s market strength, core competencies, financial and people related strength, leadership capabilities, etc. Through SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, an organization can assess its competitiveness and this would influence the strategic practices of an organization.

Strategic Change aims at establishing robust systems and processes for facing the competitive challenges and growing environmental pressures. Robustness involves proactive anticipation of the environmental changes and adapting to it for being competitive in the battle for leadership. For establishing a strong and robust framework, firstly it requires a comprehensive assessment of the environmental forces, effective and accurate articulation of values/beliefs, questioning one’s own values/beliefs, identifying newer alternatives and practising it for achieving enabling outcomes. Secondly, for setting up robust system, apart from definition of strategies, self sufficiency of resources should also exist as the implementation of change involves heavy capital investment. Thirdly, it requires maintaining contact and establishing credibility and commitment.

Fopp proposed 4 different approaches for organizational change management (Zarebska 2002).

1. From “top to bottom” method involves selection of key representatives/heads for various departments for realizing pilot project goals.
2. The next approach/method is the centripetal method which involves concentration on the key processes of the organization. This approach involves strengthening relations with the suppliers and customers, strengthening internal connections across different units of the organization.
3. The method “Bottom to Top” can be applied when an organization attains a very high level of maturity along with the strong commitment from the employees for fulfilling the strategic goals and objectives of the organization.
4. The next method is “step by step” is a highly methodical approach which involves through assessment of the existing systems, policies and procedures and gradually implementing change in a step by step manner across various areas.

According to Malara (1998), he identified 3 approaches to change management:

1. The Diagnostic method: This method involves a critical analysis of the existing conditions, specifying the purpose and the objective of the research. Then it involves an extensive research of the present realities, identifying the best possible solutions for overcoming the systemic loopholes and implementation of best possible solutions.
2. The Prognostic method: This method involves making projections or forecasts about the future trends by using scientific applications.
3. The third approach is a combination of both the techniques.

To sum it up, Implementation of change in an organization largely depends on the organizational vision, mission, values and strategies. Implementation of strategies in an organization depend on change in both the static (organizational structure) and dynamic (processes). It should be an integrated and an interdependent approach for achieving the pre-defined goals or objectives of the organization involving a collaborative effort from the teams as well as the management and the stakeholders.

Models/Approaches to Implement Change Management Programme

Several models of Change Management have been suggested by several management consultants, social scientists and clinical psychologists till date for implementing planned change successfully. But these models are continually revised or adapted as per the changing times or forces of business.

Change Management Models establish the framework or can be regarded as the starting point in the implementation of change across the organization by ascertaining the need for change and they set the scene for implementation of various change interventions across the organization. Each Model of Planned Change rely on certain theories which describe the different stages of change management and how it affects the various levels in an organization. If we review the literature, a lot of confusion exists in understanding the difference between models of change and change strategies.

According to Sadler (1996, p. 49), an organizational strategy can be regarded as the means for realising the ultimate goal or focal objective. It involves defining the vision and mission, long term and short term plans, operational objectives, values and organizational ethics and tactics. While, on the other hand a model of change encompasses the assumptions and beliefs which when combined together in a systematic manner, result in bringing about change in an organization (Tichy 199). Thus, it can be said that the models of change lay the framework for formulation and implementation of strategies.

Change Interventions can be subdivided into three broad categories:

1. Top Down Change Management: This kind of intervention relies on the fact that the organizational change cascades from the top level of the management to the bottom most level in an organization. Hence if the decision-making authorities or the champions of change i.e. the top management plan and implement change correctly, then successful outcomes can be expected from the implementation of change in an organization. The primary focus is on minimizing the obstacles concerning resistance from the employees through culture building initiatives or encouraging employee involvement in the entire process.
2. Transformational Change Management: This intervention relies on the influencing capabilities of a transformational leader who can set constructive examples and encourages “Out of the Box Thinking” abilities and risk acceptance for driving excellence at work.
3. Strategic Change Management: As per this intervention, as against the other two interventions, it aims at encouraging introduction new ways of doing work, then allows the employees to analyse the effect of new behaviours at work on organization and then based on it internalize the new behaviours/ways of working for improved outcomes.

If we examine all the three interventions of change management, we will understand that all these interventions lay stress on the role of leadership, strategic planning, involving employees in the overall process and proper communication. Hence, for successful implementation of change, the models of change management or approaches should be considered.

According to Burke and Trahant (2000), for gaining a competitive edge over the competitors, an organization should have change management processes in place and be able to implement change effectively. These procedures may involve various elements like organizational structure and culture, organizational control, technological developments and transformational leadership. The nature or the degree of change will primarily depend on the organizational requirements for change. Thus, it can be concluded that change is inevitable and ubiquitous, affects different systems and processes in an organization and mostly involves a transition from known to the unknown state.

Due to the uncertainties involved in the process of change and its widespread impact, organizations must adopt an integrated approach in any change program which should include the structural, behavioural and technological approaches for implementing change across the organization (Harvey and Brown 1996, p. 410).

Kurt Lewin’s Change Management Model: The Planned Approach to Organizational Change

Kurt Lewin’s Three Stages model or the Planned Approach to Organizational is one of the cornerstone models which is relevant in the present scenario even. Lewin, a social scientist and a physicist, during early 1950s propounded a simple framework for understanding the process of organizational change known as the Three-Stage Theory which he referred as Unfreeze, Change (Transition) and Freeze (Refreeze).

According to Lewin, Change for any individual or an organization is a complicated journey which may not be very simple and mostly involves several stages of transitions or misunderstandings before attaining the stage of equilibrium or stability.

For explaining the process of organizational change, he used the analogy of how an ice block changes its shape to transform into a cone of ice through the process of unfreezing.

Source: http://www.strategies-for-managing-change.com

Stage 1 – Unfreezing: This is the first stage of transition and one of the most critical stages in the entire process of change management. It involves improving the readiness as well as the willingness of people to change by fostering a realization for moving from the existing comfort zone to a transformed situation. It involves making people aware of the need for change and improving their motivation for accepting the new ways of working for better results. During this stage, effective communication plays a vital role in getting the desired support and involvement of the people in the change process.

Stage 2 – Change: This stage can also be regarded as the stage of Transition or the stage of actual implementation of change. It involves the acceptance of the new ways of doing things. This is the stage in which the people are unfrozen, and the actual change is implemented. During this stage, careful planning, effective communication and encouraging the involvement of individuals for endorsing the change is necessary. It is believed that this stage of transition is not that easy due to the uncertainties or people are fearful of the consequences of adopting a change process.

Stage 3 – Freeze (Refreezing): During this stage, the people move from the stage of transition (change) to a much more stable state which we can regard as the state of equilibrium. The stage of Refreezing is the ultimate stage in which people accept or internalize the new ways of working or change, accept it as a part of their life and establish new relationships. For strengthening and reinforcing the new behaviour or changes in the way of working, the employees should be rewarded, recognized and provided positive reinforcements, supporting policies or structures can help in reinforcing the transformed ways of working.

The three stages of Change Management can be aptly explained through the aid of an example of Nissan Motor Company which was on the stage of bankruptcy due to the issues of high debts and dipping market share.

During that period, Carlos Ghosn took charge as the head of the Japanese automaker who was faced with the challenge of implementing a radical change and turning around the operations of Nissan, yet by keeping the resistance to change under control which was inevitable under such circumstances by forming cross-functional teams to recommend a robust plan of change in different functional areas. For facing the business challenges, he developed a change management strategy and involved the employees in the process of change management through effective communication and reinforcement of desired behaviours. For refreezing the behavioural change of the employees, he introduced performance-based pay, implemented an open system of feedback for guiding and facilitating the employees in accepting the new behaviour patterns at work.

According to Branch (2002, p. 4), Lewin’s change management model can be implemented in three ways:

1. Changing the behaviour, attitudes, skills of the individuals working in the organization.
2. Changing the existing organizational structures, systems and processes
3. Changing the organizational climate, culture and interpersonal style.

Lewin’s model stressed on the interdependence of various units as well as subunits in an organization. This model assumes that organizations function under static conditions and move from one state of stability to another state of stability in a planned way, but the present day organizations function in turbulent scenarios and uncertain business environments. Furthermore, several critics criticized Lewin’s planned approach to change management for the following reasons:

• It was criticized for being too simple and mechanistic, as a result of which it may not be applicable for the present organizational scenario.
• Lewin’s Planned change model fails to take into consideration the radical or transformational change; it is only useful if incremental change is implemented in an organization
• This model ignores the role of Power & Politics and conflicts. Moreover, it ignores the importance of feelings and experiences of employees which play a crucial role in the entire change process. The model is very plan or goal driven.
• This model supports top-down approach to change management and ignores the importance of bottom-up approach in the change management process.

Lewin’s Force Field Analysis

Kurt Lewin’s Force Field Analysis attempts to explain how the process of change works by diagnosing the driving and the restraining forces that lead to organizational change. One side of the model represents the driving forces, and the other side represents the restraining forces. The driving forces push the organizations towards the new state, and the restraining forces are the factors which provide resistance to change or are regarded as the behaviours of the employees that block the process of change. According to Lewin, stability can be achieved when both the driving and restraining forces reach a stage of equilibrium, which should be approximately of equal strength from the opposite directions.

According to the Force Field Analysis model of Kurt Lewin, effective change happens by unfreezing the existing state of affairs or the current situation, moving to a changed or a desired situation and then refreezing for making the change relatively permanent. During the stage of Unfreezing, the driving forces should be made stronger to motivate a change in the behaviour or ways of working, while the restraining forces should be made weaker or removed. Driving forces create a sense of urgency for the change. The driving forces from the external environment could be Globalization, Technological Development and IT revolution, changes in the workforce, etc. Apart from this, the driving forces may originate within the organization through the efforts of the corporate leaders.

Any change process should start with informing the employees about the influence of the external driving forces like competitors, changing trends in the consumer demands and preferences, regulatory compliances and various other factors. Apart from this for implementing change effectively, the restraining forces should be reduced or removed.

The restraining forces or the resistance from the employees can be controlled by way of effective communication and involvement of the employees in the process, training initiatives for strengthening the new set of knowledge and skills, implementation of stress management techniques to help employees in coping with the stressors, negotiation for ensuring compliance and the last method is implementation of coercive measures if all the other measures fail and the need for change is urgent in nature.

Kotter’s 8 step Model of Change

John Kotter (1996), a Harvard Business School Professor and a renowned change expert, in his book “Leading Change”, introduced 8 Step Model of Change which he developed on the basis of research of 100 organizations which were going through a process of change.

The 8 steps in the process of change include: creating a sense of urgency, forming powerful guiding coalitions, developing a vision and a strategy, communicating the vision, removing obstacles and empowering employees for action, creating short-term wins, consolidating gains and strengthening change by anchoring change in the culture. Kotter’s 8 step model can be explained with the help of the illustration given below:

(Source: Adapted from Kotter 1996)

1. Creating an Urgency: This can be done in the following ways:
   • Identifying and highlighting the potential threats and the repercussions which might crop up in the future.
   • Examining the opportunities which can be tapped through effective interventions.
   • Initiate honest dialogues and discussions to make people think over the prevalent issues and give convincing reasons to them.
   • Request the involvement and support of the industry people, key stakeholders and customers on the issue of change.
2. Forming Powerful Guiding CoalitionsThis can be achieved in the following ways:
   • Identifying the effective change leaders in your organizations and also the key stakeholders, requesting their involvement and commitment towards the entire process.
   • Form a powerful change coalition who would be working as a team.
   • Identify the weak areas in the coalition teams and ensure that the team involves many influential people from various cross functional departments and working in different levels in the company.
3. Developing a Vision and a StrategyThis can be achieved by:
   • Determining the core values, defining the ultimate vision and the strategies for realizing a change in an organization.
   • Ensure that the change leaders can describe the vision effectively and in a manner that people can easily understand and follow.
4. Communicating the Vision
   • Communicate the change in the vision very often powerfully and convincingly. Connect the vision with all the crucial aspects like performance reviews, training, etc.
   • Handle the concerns and issues of people honestly and with involvement.
5. Removing Obstacles
   • Ensure that the organizational processes and structure are in place and aligned with the overall organizational vision.
   • Continuously check for barriers or people who are resisting change. Implement proactive actions to remove the obstacles involved in the process of change.
   • Reward people for endorsing change and supporting in the process.
6. Creating Short-Term Wins
   • By creating short term wins early in the change process, you can give a feel of victory in the early stages of change.
   • Create many short term targets instead of one long-term goal, which are achievable and less expensive and have lesser possibilities of failure.
   • Reward the contributions of people who are involved in meeting the targets.
7. Consolidating Gains
   • Achieve continuous improvement by analysing the success stories individually and improving from those individual experiences.
8. Anchoring Change in the Corporate Culture
   • Discuss the successful stories related to change initiatives on every given opportunity.
   • Ensure that the change becomes an integral part in your organizational culture and is visible in every organizational aspect.
   • Ensure that the support of the existing company leaders as well as the new leaders continue to extend their support towards the change.

Advantages of Kotter’s Model

• It is an easy step by step model which provides a clear description and guidance on the entire process of change and is relatively easy for being implemented.
• Emphasis is on the involvement and acceptability of the employees for the success in the overall process.
• Major emphasis is on preparing and building acceptability for change instead of the actual change process.

Disadvantages of Kotter’s Model

• Since it is a step by step model, skipping even a single step might result in serious problems.
• The process is quite time consuming (Rose 2002).
• The model is essentially top-down and discourages any scope for participation or co-creation.
• Can build frustration and dissatisfaction among the employees if the individual requirements are given due attention.

Contingency Model of Change Management: Dunphy and Stace’s Model of Change

The contingency model is an extended version of Lewin’s three step in which Dunphy and Stace (1988, 1992 and 1993), explained the process of change from the transformational organization perspective.

Dunphy and Stace (1993), put forth a situational or contingency model of change, which emphasized on the fact that organizations should vary their change strategies in accordance with the environmental changes for arriving at an ‘optimum fit’. It further discussed that organizations differ in terms of structure, processes and key values which they espouse, and it is due to these differences; the organizations may not be influenced by the similar situational variables. Dexter Dunphy and Doug Stace, through their contingency model proposed that depending upon the environment, both the managers as well as the change agents should vary their change strategies. They focus on the environmental factors as well as the forces of leadership which play a crucial role in any change process.

According to them, change can be categorized into four different types: fine tuning, modular transformation, incremental adjustment and corporate transformation. Both the authors reckoned that the change need not only happen on an incremental basis but can also take place on a radical or discontinuous basis. They equally highlighted that the transformational change could be both consultative as well as coercive in nature.

Dunphy and Stace Described 4 Styles of Leadership

1. Collaborative Style: The collaborative leadership style attracts large scale participation from the employees of the organization in the important decisions related to the future and equally related to the method for implementing organizational change.
2. Consultative Style: The Consultative Style of Leaders consult the employees before implementing organizational change by involving them little in the process of goal setting related to their area of expertise.
3. Directive Style: The Directive Style of Leadership involves least participation from the employees in the decision-making process related with the organizational future, instead this kind of leadership uses authority for implementing vital decisions related to the organizational change.
4. Coercive Style: This form of leadership exercises coercion or force for implementing organizational change on the members of the organization either by involving the outside parties or involving the managers/executives in the process.

In continuation with this, both argued that:

• Incremental change can be more appropriate when an organization is already maintaining its best fit and require small changes in certain parameters. Hence the change need not be implemented rapidly or abruptly to ensure smooth organizational transition.
• Transformational change can be necessary in situations when an organization is faced with a position of disequilibrium or is out of the fit, as a result of which a quick action is needed or transformational change is required for ensuring the survivability of the organization.
• Collaborative mode of change can be more useful under situations when the target employees or the interest groups support and cooperate in the entire process of change and no oppositions are being met with in the ensuing process.
• Coercive modes of change can be useful if at all any change faces large-scale opposition from the target interest groups.

Based on the interaction between the Scale of Change and Management/Leadership style, Dunphy and Stace propounded a model of 5 different types of Change.

The salient features of these 5 types of change are given below:

1. Taylorism: This is the kind of change in which the change is usually avoided, and small adjustments are made. This kind of change results in lower organizational performance
2. Developmental Transition: This kind of change is facilitating in nature as it focuses on employee development, use of TQM, improving communication and expansion of services, achieving continuous improvement in service quality and team building measures.
3. Task-Focused Transition: This technique focuses on new techniques and new procedures, new products and services and is also based on constant reorganizations.
4. Charismatic Transitions: As a Charismatic or a popular leader, through effective communication and development of trust or faith, the change can be implemented smoothly with the willingness of the followers associated with it.
5. Turnarounds: This kind of change is path breaking in nature using authority or even coercion at times, sometimes it may involve considerable agony or pain as well.

Limitations of the Model

• This model has been criticized of being Normative with only limited empirical evidence.
• This model has been criticized due to its excess of dependency on the change drivers and the leadership style which they adopt for implementation of organizational change instead of analysing the organizational factors.

Mintzberg and Quinn’s Model of Change

Mintzberg and Quin (1991) proposed 4 broad situational factors which can influence the extent to which an organization can change. These factors are organizational age and size, the technical systems of the organization, organizational environment and the nature of control exerted from various sources.

1. Organizational Age and Size: This is one of the most important factors as according to Mintzberg and Quinn, formalized behaviour are practised in much older organizations, while larger organizations have more elaborate structures and larger structures reflect the age of the industry since it got established.Young organizations which are relatively in the start-up stage, have relatively smaller structures and hence they spend less time on establishing formal traditions and practices which in due course of time may act as barriers to change. Hence the young organizations adjust with the change and accept the change. But on the other hand, the older organizations which have formal structures and strongly established traditions and practices find it difficult to adjust to the changes and are less flexible in their approach. Large organizations follow greater hierarchy required for supervising the employee activities and need to maintain greater control.
2. Technical System: Technical System constitutes the instruments used by the organization for producing the desired outputs. The Technical System can affect the organizational structure broadly in 3 different ways:
   • Organizations which are highly regulated and dominated by the technical systems display more of bureaucratic structures.
   • Organizations having highly complex technical systems, tend to delegate the process of decision making to highly skilled or professional staff for managing the technical staff.
   • Organizations with automated technical systems tend to adopt much fluid and flexible structure, for proactively responding to the changing requirements of the times.
3. Environment: The environmental factors are the external factors which are beyond the organizational control, market driven forces, socio-political environment, economic changes and many others. The environmental factors influence the organizations in the following ways in terms of their adaptability with the change:
   • Organizations which operate in dynamic environments tend to follow more organic structures
   • Organizations which exist in complex environments adopt more decentralized structures.
   • Organizations existing in diversified market conditions adopt market driven divisional structures
   • Organizations operating in hostile environments adopt a more centralized form of structures.
4. Nature of Control/Power: The following considerations determine the extent to which power can influence change in an organization:
   • More centralized and formalized structure is adopted by the organizations having greater external control.

The model further goes on to describing 5 main components of an organization which influence the extent to which an organization need to change. These components are:

1. Operating Core: This constitutes the employees who perform the basic activities related to the process of production of various products and services.
2. Strategic Apex: This constitutes those group of people who are responsible for implementing strategic decisions for realizing the organizational mission and objectives. They enjoy power and control.
3. Middle Line Managers: The Middle Line Managers act as the intermediary and the link between the operating core and the strategic apex.
4. Techno structure: The analysts (employees) are hold the responsibility of planning and executing the change, implementing vital decisions related with the change and responsible for training other employees for implementing the change.
5. Support Staff: The Support Staff are primarily the specialized units.

According to Mintzberg, all the components need to blend for improved organizational functioning. He equally maintained that organizational structures can be identified as machine organization (bureaucracy), entrepreneurial organization, the innovative organization (adhocracy) and the divisional (diversified) organization.

He explained that machine organizations have more formalized structures and rely on standardized processes, routines and procedures are involved in the process of organizational functioning, is based on centralized decision-making process, and moreover, tasks are clustered or grouped in accordance with the functional departments.

He further described that machine organizations have a vertical structure, in which the decision making is centralized and the senior management implement decisions centrally. Since the machine organizations follow centralized decision making and are formalized structures like the government organizations, hence they can do well when it comes to handling the routine nature of works but not under circumstances when radical decisions are supposed to be implemented.

Limitations of this Model

• The model skips the analysis of the relationship which exists between organizational effectiveness and the managerial behaviour.
• Their assumptions were based on the analysis of the patterns of change and structures of small samples of organizations, which cannot be generalized to the entire industry or all the organizations.
• The model presumes the neutrality of the managerial role ignoring a lot of other vital factors.
• The model does not take into consideration the factors before introducing the change like the roles of an effective or a successful change initiator.

Scott and Jaffe Change Model

This model of change is one of the unique models of change as propounded by Cynthia Scott & Dennis Jaffe in their article ‘Survive and Thrive in Times of Change’. The model derives its inspiration from the work of Elisabeth Kubler-Ross, in which she highlighted through her research the ways in which people coped with tragedies, grief or sorrow and based on her investigation she identified five stages of grief: anger, denial, depression, bargaining and acceptance. In a similar manner, Scott and Jaffe described the entire psychological process and how individuals respond to change.

The key highlights of this model havebeen given below:

• Change occurs over a period of time which is indicated on the horizontal axis from the left to the right. The left side of the horizontal axis focuses on the past while the right side focuses on the future.
• The vertical axis focuses on the general awareness and suggests that with the passage of time our priorities change from focusing more on the external environment to becoming more introspective and then once again paying importance to the external environment.
• The U-Shaped curve demonstrates how an individual goes through the psychological processes during a change. The U-shaped curve even indicates the effect of change on individuals in terms of increasing disempowerments or re-empowerment. The left quadrant of the curve indicates an increase in disempowerment and the right quadrant of the curve indicates re-empowerment.

As per Scott and Jaffe, we all transition through 4 stages of change:

1. Denial: This is the stage in which the feeling of change does not easily sink in and we ignore the change completely as if nothing has happened.
2. Resist: During this stage, we understand that the change has taken place and it cannot be ignored, but the acceptability is resisted. The resistance is usually exhibited through emotional upsurges in the form of anger, frustration, anxiety, fear of the unknown and sometimes voice it out by opposing the change vociferously. It is during this stage when the organization witnesses a loss in productivity as well as the overall stability in the business environment due to this resistance.
3. Explore: This is the stage of exploration during which the organization builds up its coping or adaptive mechanisms to tackle the resistance, focuses on the futuristic priorities/goals by empowering people and encouraging them for trying out new processes or testing things out gradually. This stage is very sensitive and tentative as for any wrong step taken people may once again revert to the resistance stage of change.
4. Commit: This is the stage during which the individuals are re-empowered and they accept the new methods or processes. It is very important that commitment towards the change can be established by backing it up with appropriate recognitions and clearly defining the Roles and Accountabilities of the employees.

The model of Change as propounded by Scott and Jaffe is regarded as a predictive model which is far from the reality. But the model can be considered as a vital framework for understanding the process of change and it provides crucial insights on how one can manage change successfully by minimizing the resistance.

Anderson & Anderson’s Change Model

Anderson & Anderson’s model of change provides a comprehensive coverage of the entire process of change and equally explains the whole process of change as a cyclical process (Anderson and Anderson, 2001, p. 13). This model briefly views change from three perspectives:

1. Content: It analyzes the technical as well as the organizational factors which require change;
2. People: This analyzes the subjective factors such as the mindset, changes in the behavioral patterns of people as well as the cultural changes;
3. Process: This stage is related with the possible action plans or strategies that can be crafted and implemented for driving the change initaitive successfully across the organziation.

All the three processes are integrated and interdependent on each other. The model is illustrated through nine phases as demonstrated in the diagram below:

Source: Adapted from Anderson and Anderson (2001, p. 15)

Phase I – Preparing to Lead the Change Initiative: Any change in an organization is the result of a wake-up call which an employee receives in an organziation. During this phase, the employees of the organization, as well as the management, reach a consensus regarding the need for change. The strategies for managing change are implemented as well as the employees are prepared for dealing with the change process through effective communication and involvement of the employees in the entire process. The employees are prepared for the change process by:

• Role Clarification and selection of the best-suited skill sets or expertise as per the requirements of the role.
• Motivating the employees for endorsing the change initiatives by determining the need for change and highlighting the possible outcomes of change and how it may influence the organizational functioning as a whole.
• Ascertaining the organization’s preparedness as well as the capacity to implement the change initiative.
• Identifying and strengthening the capacity of the champions of change or the change initiators to develop and implement change models successfully by analyzing behavioural, process oriented as well as organizational factors.
• Developing various approaches to change management, defining the structures, processes as well as the pre-requisites for implementing change in the organization successfully.

Phase II – Defining the Organizational Vision, Commitment and strengthening the Capabilities: This stage relates to building organization wide commitment, understanding and strengthening the capacity to succeed in the transformation process (Anderson and Anderson, 2001, p. 129). This can be achieved by:

• Building a strong case for change and motivating the employees to embrace the change by sharing the futuristic vision.
• Planning and utilizing effective techniques for communication that may help in fostering a deeper understanding regarding the change.
• Planning and organizing periodic training programmes aiming at changing the employee mindset from following the traditional style of working to endorsing the newer methodologies or changed techniques.
• Seeking employee involvement and participation in the process by obtaining their inputs on various issues related with the process of change management.
• Allocation of responsibilities by identifying the key players across all the levels of the organization.

Phase III – Determine the Design Requirements by Assessing the Situation: This is the stage during which the existing situation or the current realities of an organization are assessed and defining the expectations clearly regarding what are desired outcomes which can be achieved through implementation of change. This can be achieved by:

• Clear definition of expectations for achieving successful outcomes of change.
• Creating various design scenarios which might influence the change and evaluation of various alternatives before the implementation of change.
• Determining what is required to be stopped or dismantled and creating a fresh roadmap for achieving successful outcomes of change management.

Phase-IV – Enabling achievement of the Vision by Creating the Desired Design State: This phase involves designing the organizational as well as cultural solutions which may help in the realization of the ultimate vision. This can be achieved by:

• Achieving the desired state by establishing the desired processes as well as the structures.
• Providing power to the nominated employees for deciding on various design levels which include – vision, strategies, operational and managerial.
• Deciding about the usage of the pilot test and also various communication modes which can be used across the organization.

Phase V – Analysis of the Impact: The magnitude of the impact can be measured by using the Gap Analysis tool which would highlight the key areas or issues which can be addressed by crafting a realistic plan of action. During this phase, the champions of change need to focus on the formal organizational processes and also the behavioural, cultural and human factors and the interlinkages between them.

Phase VI: Masterminding the implementation plans, integrating various actions for achieving efficiencies and optimizing resource utilization. It involves the implementation of strategies, defining the timelines and managing the key processes for reaching the desired state.

Phase VII – Implementing the Change Plans: During this phase, the change initiators should pay attention to the following parameters;

• Implementing the master plan for reaching the desired state by paying attention to dealing with resistance, managing employee’s reactions and dealing with it.
• Constantly monitoring the entire process of implementation involving critical aspects like communication delivery, the reaction of employees as well as identifying the need for coaching and training.

Phase VIII – Celebrating as well as Integrating the New State: This is the stage for celebrating the achievement of the desired state and making people in the organization aware that they are in the new state. Rewarding the people who have made active contributions towards the achievement of the desired state. It equally involves integrating the employees and supporting them for mastering the new behaviours, skills and competencies. This integration and support may take the forms of training & development, mentoring and coaching of employees, identifying best practices and rewarding outstanding performances, benchmarking the practices or success stories of other organizations and organizing seminars/workshops, projects, etc.

Phase IX – Learning & Correct Course: This is the last phase which involves paying attention to the following factors:

• Creating effective processes/mechanisms for achieving continuous improvement.
• Continuously evaluating and learning on how effectively the entire process of change and processes were designed and implemented.
• Improving the organization’s readiness as well as along with the abilities for driving future changes successfully.
• Closing down the process of change by dismantling the temporary structures, infrastructure as well as the conditions which do not meet the requirements of the new organization any longer.

Anderson & Anderson’s model of change management is a much more comprehensive model and is very useful for addressing various kinds of change in the organization. Apart from this, it equally describes the change in nine cyclical phases and gives due importance to all the strategic decisions which should be considered by the champions of change. The model provides strategic alternatives for addressing various challenges which may arise during different phases of the change.

McKinsey 7S Change Model

McKinsey 7S model was developed by Robert Waterman and Tom Peters during early 1980s by the two consultants McKinsey Consulting organization. The model is a powerful tool for assessing and analyzing the changes in the internal situation of an organization. It is based on 7 key elements, which determine the organization’s success, which should be interdependent and aligned for producing synergistic outcomes. The model can be used widely in various situations where an alignment is required:

• For improving organizational performance.
• Analyzing and evaluating the effects of futuristic changes on the organization.
• Can be a useful framework during the situation of Merger and Acquisition involving striking an alignment between the key processes of an organization.
• Providing a recommendative framework for implementing a strategic plan of action.
• The model can be effectively applied to various teams or groups or projects as well.

The McKinsey 7 S model refers to the seven key interrelated or integrated elements of an organization which are subdivided into hard and soft elements:

The Hard elements are within the direct control of the management as it can be easily defined and identified. The following elements are the hard elements in an organization.

1. Strategy: It is the plan of action, or the roadmap or the blueprint by way of which an organization gains a competitive advantage or a leadership edge.
2. Structure: This refers to organizational structure or the reporting pattern.
3. Systems: This includes the day to day activities in which the staff members involve themselves for ensuring the completion of their assigned tasks.

The Soft elements are less tangible and are difficult to be defined and identified as such elements are more governed by the culture. But according to the proponents of this model, these soft elements are equally important as the hard elements in determining an organization’s success as well as growth in the industry. The following elements are the soft elements in an organization:

1. Shared Values: The superordinate goals or the core values which get reflected within the organizational culture or influence the code of ethics.
2. Style: This lays emphasis on the leadership style and how it influences the strategic decisions, people motivation and organizational performance.
3. Staff: The general staff or the capabilities of the employees
4. Skills: The core competencies or the key skills of the employees play a vital role in defining the organizational success.

McKinsey 7S Model

As per the above diagram, the shared values in the center of the model influence all the other elements of the model which are interconnected and interrelated. The rest other elements originate from the very reason for the existence of the organization which is the vision which is formed by the creators of the values in an organization. If the values change, the rest other parameters equally undergo a change.

The 7S model identifies the inconsistencies or gaps between various elements and provides a strategic plan of action for reaching from the current state to the desired organizational state. The alignment between each element can be checked by paying attention to the following steps:

• Assessing the Shared Values: Assessing whether the shared values are in consistency with the elements such as structure, systems and strategy and if not then determining what may be changed.
• Assessing the Soft Elements as well as the Hard Elements in terms of interdependence and alignment between them and the possible course of action if these elements do not support each other.
• Making changes or adjustments and then analyzing whether these elements function in alignment or not.

According to Waterman and Peters, this model can be used by following five steps: The first step involves identification of those elements of the framework which do not align properly. It equally involves assessing the inconsistencies in the relationships between all the elements. The second step is concerned with the organizational design optimally and this optimal fit will be different for different organizations. The third step involves deciding the course of actions or the changes which are required to be implemented. The fourth step is the actual implementation of the change and the final stage or the fifth stage is the final review of the 7S framework.

Limitations of 7S Model

• Ignores the importance of the external environment and depicts only the most crucial elements in this model for explaining the interdependence of the key processes and factors within the organization.
• The model does not explain the concept of organizational effectivness or performance explicitly.
• The model has been criticized for lacking enough empirical evidences to support to support their explanation.
• The model is considered to be more of a static kind of model.
• It is rather difficult to assess the degree of fit with accuracy successfully.
• Criticized for missing out the intricate or finer areas in which the actual gaps in conceptualization and execution of strategy may arise.

Transformational Change & Change Management

In the present competitive scenario, modern organizations are faced with several challenges from the external environment which are political, social and economic in nature. Along with the pressures of such factors, the organizations have to compete by coping up with the challenges posed due to globalization, technological innovation, changes in the preferences/lifestyle changes, acute skill shortage and workforce issues, financial forces and also changes in the legislations internationally.

According to Macredi and Sandom, 1999, the ability to successfully manage change has become a vital asset for the organization’s in the present scenario for staying competitive in the unstable environment.

Transformational change means alterations in certain areas which is caused due to an interaction with the environmental factors and creates a need for new behaviours or changes in the behaviours of the organizational employees. According to Jick and Peiperl (2003:218), a transformation is referred to as organizational reorientation. Cummings and Worley (2001:498) and Grobler (in Verwey & Du Plooy-Cilliers, 2003:192), viewed transformational change as paradigm modifications both at the individual and organizational levels. They equally viewed transformational change as the major task of the leaders of the present scenario, from which emanates the term transformational leaders.

The model above shows the interrelationship between the entire gamut of transformational factors on the organizational performance and change. It shows that the organizational change is affected by the external environment which includes factors like competitive forces, technological innovation and government rules & regulations. Even the role of transformational leaders in the era of fast transformation has also been discussed through this model. The transformational leaders play a crucial role in organizational transformation and help in responding to the forces of the external environment by proactively assessing the challenges from the external environment and accordingly developing and implementing strategic interventions. Given below is a description of each factor presented in the model:

External Environment: It constitutes the external factors or situations that influence the organizational performance like the worldwide economy, politica/government factors and the legislations.

Mission and Strategy: Mission is the reason for existence of the organization and strategy constitutes the road map of action and how the organization achieves its goals/purpose over a period of time. A written mission statement guides the employees in their pursuit of organizational excellence.

Leadership: Leaders provide direction and guidance to the employees for behaving and performing in expected ways.

Organizational Culture: Culture of an organization influence the behaviour of the employees and the way the employees do things.

Structure: Structure describes the hierarchical pattern in an organization, levels of responsibility and the arrangement of functions, authority for making decisions, communication patterns and relationship for ensuring effective implementation of the organizational strategy and realization of goals.

Ten Pre-Requisites for Transformational Change as per Beckhard

1. Ensuring the commitment of the senior management towards the change, which should even be visible to all the organizational members.
2. Producing a written mission statement and the futuristic vision/direction of the organization which may provide guidance on the objectives, policies and values.
3. Building a shared awareness and change in the perception of the employees regarding the need for change.
4. Selecting a team of key managers and opinion formers who will be playing a crucial role in gaining the commitment of the employees towards the change and in disseminating the change widely across the organization.
5. Generating an acceptance towards the overall process of change and the entire process of transformation.
6. Developing an understanding that resistance to change is inevitable and it needs to be managed effectively.
7. Educating and training the participants regarding the necessary competencies required for effectively overcoming the resistance towards the change and winning their commitment.
8. Taking steps for avoiding the blames or any kind of negative behaviour which may generate any kind of resistance towards the change.
9. Using appropriate resources for facilitating this entire process of transformation or change.
10. Maintaining open channels of communication regarding the key processes, failures, challenges and the learning from the new initiatives.

In a nutshell, transformational change has been described from different perspectives.

According to Head (1997), transformational change refers to change in the structure, culture and key processes of an organization.

As per Chapman (2002), transformational change requires changes in the attitude, beliefs and values of the employees.

As per Stace and Dunphy (2001), transformational change involves a redefinition of the overall organization’s strategies, gaining the employees commitment towards the process of transformation and reorienting the culture of the entire organization.

In the view of Nadler and Tushman (1989) transformational change is a time-consuming process and requires comprehensive coordination and complete support from the management for effective outcomes.

Models of Transformational Change

An extensive review of the literature details would reveal that both practitioners and academics have explained transformational models with varied perspectives and focus on different points of views.

Practitioner Models

The Practitioner Models focus on senior management in an organization (Kanter, 1983 and Kotter, 1995). These models rely on opinions and also on illustrative anecdotes and offer recommendations or concrete solutions to the managers. The practitioner models often provide a suggestive model or a comprehensive plan of action for initiating change in an organization successfully.

According to Kotter (1996), Carroll and Hatakenaka (2001), for describing these models effectively, only two aspects are considered and that is success or failure. However, the Practitioner Models have been crticized for being too simplistic in its approach and pay a lot of attention to only the implementation process, but ignore various other crucial factors and their influence like political factors, organizational and environmental factors.

According to Miller, Greenwood and Hinings (1997), these models have been further criticized for the following reasons:

• These models ignore the roles played by both the internal and external environments in the successful change implementation process.
• These models need not be successfully replicated in other organizations with a similar background and areas of operations.
• In certain circumstances, the practitioner models on being adopted and implemented can prove to be quite dangerous in organizations.

Theoretical Models

The Theoretical Models are developed on the basis of an extensive review of the research literature which analyze the key areas of transformational change. According to the proponents of the Theoretical Models, these models are more generic and comprehensive in nature than the Practitioner Models.

The Theoretical Models attempt to define the various types of change and equally describe the change characteristics. Burke and Litwin (1992) as well as Porras and Robertson (1992), proposed two different models of organizational change which focus on empirical research and practise. Burke and Litwin’s Transformational model of change emphasize on the leadership behaviour and how leaders influence the behaviour of others by acting as role models in the organization. Apart from this, the model equally explains the interrelationship between various factors in an organization such as strategy and mission, the external environment, overall organizational performance and the employees, leadership and organizational culture.

Similarly, Porras and Robertson focused more on the organizational work settings in their model. According to them, four major factors play a crucial role in the entire process of organizational change, and these factors are physical settings, social factors, organizational arrangements and technology. The outcomes of change are reflected in the form of changes in the individual and organizational behaviour.

In a nutshell, it would be more appropriate to describe that both the Theoretical and Practitioner models of change, analyze the internal and external environment which influence an organizational performance, highlight the outcomes or impact of change on key aspects, illustrate the expectations of change, the strategic issues involved in the entire process of change management and also the relevance of the process of communication across all levels in the entire change process.

Common Stages in Both Practitioner and Theoretical Models of Organizational Change:

1. Clear Statement of Goals: This stage involves a clear definition of what the organization’s present status is and where does it want to move to in the future. It icludes a statement of the change objectives, futuristic goals which it wants to attain and visualizing a bigger picture by analyzing the total picture.
2. Respect and Collaboration: The Head of the organization envisions a future of the organization and accordingly defines the long term and short term goals for realizing the ultimate vision. For implementing transformational change successfully across the organization, the organizational head requires a collaborative participation and involvement from the key stakeholders or from the cross functional teams. Without mutual respect (Duck, 1993 and Kotter, 1995) and collaboration, it is difficult to realize the objectives of organizational change.
3. Formulating and executing a Plan for Implementing the Change: The Implementation Plan for Organizational Change must extensively cover all the aspects related to the change. The implementation Plan should be shared by all the stakeholders across the organization. According to Kotter (1995), for motivating the employees and involving them in the overall process of change, the implementation plan should essentially involve short time wins through projects.
4. Predominant Role of Communication in the entire Change Process: For any change process, communication plays an integral role in the success of the overall process, which can be manifested in the form of observed behaviours, written and verbal communication. Apart from this, through one on one discussions, newsletters, presentations and pep talks change in any organization can be reinforced if communicated effectively through these media. According to Richardson and Richardson (1994) and Kitchen and Daly (2002), communication acts as a major stimulator of change and for achieving effective outcomes, the communication should be consistent from all the leaders, must be frequent and good.
5. Reinforcement and Institutionalization of the Change: A successful change management process essentially requires reinforcement of the desired change and also it’s institutionalization by introducing changes in the organizational policies and structures. Apart from this change can be reinforced by continuously articulating the new behaviours and how they support towards the realization of the organizational vision.

Organizational Change and Transition Management

The process of Transition Management involves the implementation of change through systematic planning, organizing and implementation of change to reach the desirable future state without affecting the continuity of business during the process of change. The process of transition management begins much before the actual change occurs and the members of the senior management play the role of transition managers who support the change agent in the overall process of change. During the entire process of transition, effective communication with all the key stakeholders directly or indirectly involved in the process plays a vital role.

Buchanan & Mc Calman (1989) proposed a framework on ‘Perpetual Transition Management’, which provides crucial insights regarding what triggers organizational change and also the response of the organizations towards the change. The model proposes four key layers and the interlocking management processes which bring change in an organization. These are:

1. Trigger Layer: This layer is concerned with the need identification and also the avenues for change are created deliberately and introduced as opportunities instead of threats or any crisis.
2. Vision Layer: This layer involves articulation of the futuristic vision of the organization and communicating this effectively in terms of the directional strategies and the road map of action for the organization.
3. Conversion Layer: Mobilising support for the realization of vision can be the most efficient approach for handling the triggers of change.
4. Maintenance & Renewal: This involves bringing reforms or change in the values, attitudes and behaviours for realizing the sustained advantages of change.

The Perceptual Transition Model

Source: Buchanan, O.A., Mc Calman, J, High-Performance Work System: The Digital Experience, Rouderedge, London (1989).

The above model implies that for any change to be successful, effective planning, resources management, communication of the outcomes of change and a large-scale involvement of the management will be required in connection with the four interlocking processes or layers.

While analyzing the Trigger Layer, it is important to understand what is actually creating the need for change. It must involve clear expression and communication of the objectives of change across all the levels in an organization. In the absence of effective communication and due to poor trigger identification, people usually tend to misunderstand or develop bias towards the change and try to keep away from the process due to a perceived fear of failure. Hence, both acceptance of change by understanding its nuances correctly and acknowledgement of the need for change actually play a crucial role in the entire process. The manner in which these triggers are communicated and expressed clearly so that everyone develops a shared understanding of the opportunities, threats, risks, etc, will ultimately define the success of change in an organization.

Just like shared understanding and identification of the triggers of change help in ensuring seamless process transition, description and understanding of the vision of the organization equally, play a crucial role in determining the success of the overall process. The management must consider three criterions for deciding regarding the vision or future. Firstly, the change should provide a response to all the events which trigger change. Secondly, it involves the identification of a desirable futuristic condition of an organization involving the design, goals and products. Thirdly, it must involve stimulation and challenges.

The third Layer of conversion involves recruiting disciples and establishing the structures or needed systems and processes in place. This process may be time-consuming as it is detailed in its approach and the members involved in the process of change need to own the entire process. The managers firstly form a Planning team who are responsible for the overall process of change and secondly pay a lot of importance to the talking to people about the change in formal and informal setups in every given opportunity.

The last layer Maintenance and Renewal attempt to resolve the issues related to decay in connection with the management during a mid-term change.

The Three Components of Transition as per Ogilvie

1. Endings: Letting go off the past or accepting the changed processes or behaviours.
2. Transitions: The in-between stage which involves a lot of confusion, ambiguities or a state of neutrality.
3. New Beginnings: Moving forward once again and focusing the energies on constructively dealing with the change.

Ending (3 D’s): This stage may be extremely painful, and it may involve multiple reactions:

Disengagement: This is the phase during which people tend to disconnect themselves from the situation and grieve for whatever was left behind in the past.

Dis-Identification: This may be expressed by the people in the form of identity crisis/clash as a result of the uncertainties involved in the process.

Disenchantment: This is the stage during which people usually don’t find any meaning or relevance due to the identity clash or change which has taken place.

Transition (3 D’s): Before accepting the new methods or practices, people usually face the stages of transition which may involve the following reactions:

Disorientation: It is the stage of neutrality where the old processes no longer exist, and the new is yet to happen.

Disintegration: This is the stage during which some people accept that the old processes no longer exist and they have to cope up with the changes. While, it is hard or difficult for few to get along with the change or transition which they usually express in the form of resistance or inhibitions.

Discovery: This is the stage during which over a period of time people start to discover the realities and work in accordance with the changing circumstances.

Beginning (3 I’s): This is the stage of Recovering and starting once again

Inner Realignment: After discovering the realities, the individuals adopt new plans and objectives, establish new priorities or goals for the future and try to develop an understanding of their new roles and its importance in an organization.

Investment: It is the stage during which individuals focus on reinvesting their energies to new methods and processes.

Internal Equilibrium: The individual’s try to attain a new state of equilibrium by adapting with the change.

Determining Forces of Organizational Change

Organization as a system, depend on many interdependent factors which influence it’s day to day functioning, strategic decisions and future action plans for facing the competitive challenges successfully. These factors can be both internal and external in nature and determine an organization’s readiness for change as well as it’s preparedness.

External Forces of Organizational Change

The external forces of change stem up from the external environment. These forces have been described below:

Political Forces: With the rapidly changing global political scenario and the upheavals in the global politics, the worldwide economy is equally undergoing a quick change and presenting several challenges before the organization in the form of changes in regulations, policies and also the economic framework in the form of globalization and liberalization.

Economic Forces: The economic forces influence organization’s change management strategy by either presenting opportunities or challenges in the form of economic uncertainties or growing competitive pressures.

Various factors such as changes in the business cycle, prevalent inflation or deflation rate in the economy, fluctuation in the interest rates, economic recession, changes in the economic policies or tax structures, import/export duties, fluctuation in the oil prices globally, financial stability of the country and also loss/increase in the consumer confidence towards the economic conditions of the country are some of the crucial factors. For example change in the global market, economies create a ripple like effect and affect the Indian markets too in terms of fluctuations in the capital markets, employment opportunities and rise or fall in the consumer demand.

Technological Forces: Technological advancements and innovations in communication and computer technology, have revolutionized the organizational functioning by facilitating newer ways of working and added in newer range of products/services thus creating a need for developing a framework for managing change effectively and proactively responding to the challenges as a result of these changes due to the technological forces.

Advancements in the technological field greatly contribute to the overall economic development in the country and also the organization’s success or failure in the competitive environment. One of the glowing examples is Singapore, which has emerged as one of the powerful economies within recent times in spite of no natural resource availability. With the usage of Information Technology in the strategic decision making and overall planning, today Singapore holds the status of being the world’s first completely networked economy in which all homes, administrative offices, schools/colleges/professional institutions, businesses and government branches are connected electronically.

Governmental Forces: Governmental regulations and also the extent of intervention may influence the need for change. The following governmental forces have been described below which determine the need for organizational change:

1. Deregulation: Deregulation is associated with decentralization of power or economic interventions at the state level or lessening of the governmental intervention in the economy. For example, as an outcome of deregulation few sectors/industries like insurance, banking, petroleum and many others which were previously under the direct control of the government, are now being handed over to the private players or companies.
2. Foreign Exchange: Foreign exchange rates directly affect the international trade, as the variations in the exchange rates influence the currency payment structure. Issues or constraints with the foreign exchange rate may compel the government in moving ahead with the imposition of import restrictions on selected items or deregulating the economies for attracting the foreign exchange for investment purposes.
3. Anti-Trust Laws: Anti-Trust laws are enforced by most of the governments for restricting/curbing unfair trade practices. For example, these restrictions have been enforced in India by enacting an act called Monopolies and Restrictive Trade Practices (MRTP), 1971.
4. Suspension Agreements: Suspension agreements are the agreements which are finalized between the governments to waive off anti-dumping duties.
5. Protectionism: Due to the growing competitive pressures, most of the governments try to enforce certain regulations or intervene for safeguarding their threatened industries. For example, by enforcing certain trade barriers, the Indian government protects the local industries such as Handicrafts and Textiles. These trade barriers may take the form of either anti-dumping laws, levy of tariffs or import duties, quantity quotas, and various government subsidies.

Competitive Pressures: The increase in the global competition and the challenges enforced due to the competitive pressures, force the organizations in changing their strategies for ensuring their global presence. Japanese majors like Nissan, Toyota and Mitsubishi, have been continuously relocating their manufacturing as well as their assembling operations to South East Asian countries for achieving a competitive advantage in the form of reduced cost of labour and economies of scale.

Changes in the Needs and Preferences of Customers: Changes in the needs of the customers are compelling the organizations to adapt and innovate their product offerings constantly for meeting the changing demands of the customers.

Internal Forces of Organizational Change

Systemic Forces: An organization is made up of a system and several subsystems which are interconnected, just like the way in which a human system functions. The subsystems of an organization are in direct interaction and influence the organizational behaviour as well. A change in any subsystem, result in a change in the existing organizational processes and the complete alignment as well as the relationship.

Inadequate Existing Administrative Processes: Each organization function by following a particular set of procedures, rules, and regulations. With the changing times, an organization needs to change it’s rules and existing administrative processes, failing which the administrative inadequacy might result in organizational ineffectiveness.

Individual/Group Speculations: In anthropological terms, it is understood that man is a social animal whose desires and requirements keep changing with the changing times, which result in differences in individual as well as group expectations. Various factors on the positive front such as how ambitious an individual is, achievement drive, career growth, personal and professional competencies and negative factors such as one’s own fears, complexes and insecurities are some of the inter-individual as well as inter group factors which influence an organizational functioning on a day to day basis and also its overall performance.

Structural Changes: These changes alter the existing organizational structure as well as its overall design. Structural changes can be regarded as a strategic move on the part of the organization’s to improve profitability and for achieving a cost advantage. These changes may take the form of downsizing, job redesign, decentralization, etc. For example, IBM for introducing reforms in its existing system and procedures and for achieving cost effectiveness has enforced downsizing strategy.

Changes in the Technology: Within an organization, the technological changes may take the shape of changes in the work processes, equipment, level/degree of automation, sequence of work, etc.

People Focused Change: In this context, the major focus is laid on people and their existing competencies, human resource planning strategies, structural changes and employee reorientation and replacement of an employee which mean shifting an employee to a different work arena where his/her skills are best suited. It may also be involving establishing new recruitment policies and procedures in line with the changes in the technology.

Issues with the Profitability: This can also be one of the primary causes which compel an organization to restructure (downsize or resize) or to reengineer themselves. The organization may have profitability issues either due to a loss in revenue, low productivity or a loss in the market share.

Resource Constraint: Inadequacy of the resources, may result in a powerful change force for the organization.

Determining Forces of Organizational Change

Organization as a system, depend on many interdependent factors which influence it’s day to day functioning, strategic decisions and future action plans for facing the competitive challenges successfully. These factors can be both internal and external in nature and determine an organization’s readiness for change as well as it’s preparedness.

External Forces of Organizational Change

The external forces of change stem up from the external environment. These forces have been described below:

Political Forces: With the rapidly changing global political scenario and the upheavals in the global politics, the worldwide economy is equally undergoing a quick change and presenting several challenges before the organization in the form of changes in regulations, policies and also the economic framework in the form of globalization and liberalization.

Economic Forces: The economic forces influence organization’s change management strategy by either presenting opportunities or challenges in the form of economic uncertainties or growing competitive pressures.

Various factors such as changes in the business cycle, prevalent inflation or deflation rate in the economy, fluctuation in the interest rates, economic recession, changes in the economic policies or tax structures, import/export duties, fluctuation in the oil prices globally, financial stability of the country and also loss/increase in the consumer confidence towards the economic conditions of the country are some of the crucial factors. For example change in the global market, economies create a ripple like effect and affect the Indian markets too in terms of fluctuations in the capital markets, employment opportunities and rise or fall in the consumer demand.

Technological Forces: Technological advancements and innovations in communication and computer technology, have revolutionized the organizational functioning by facilitating newer ways of working and added in newer range of products/services thus creating a need for developing a framework for managing change effectively and proactively responding to the challenges as a result of these changes due to the technological forces.

Advancements in the technological field greatly contribute to the overall economic development in the country and also the organization’s success or failure in the competitive environment. One of the glowing examples is Singapore, which has emerged as one of the powerful economies within recent times in spite of no natural resource availability. With the usage of Information Technology in the strategic decision making and overall planning, today Singapore holds the status of being the world’s first completely networked economy in which all homes, administrative offices, schools/colleges/professional institutions, businesses and government branches are connected electronically.

Governmental Forces: Governmental regulations and also the extent of intervention may influence the need for change. The following governmental forces have been described below which determine the need for organizational change:

1. Deregulation: Deregulation is associated with decentralization of power or economic interventions at the state level or lessening of the governmental intervention in the economy. For example, as an outcome of deregulation few sectors/industries like insurance, banking, petroleum and many others which were previously under the direct control of the government, are now being handed over to the private players or companies.
2. Foreign Exchange: Foreign exchange rates directly affect the international trade, as the variations in the exchange rates influence the currency payment structure. Issues or constraints with the foreign exchange rate may compel the government in moving ahead with the imposition of import restrictions on selected items or deregulating the economies for attracting the foreign exchange for investment purposes.
3. Anti-Trust Laws: Anti-Trust laws are enforced by most of the governments for restricting/curbing unfair trade practices. For example, these restrictions have been enforced in India by enacting an act called Monopolies and Restrictive Trade Practices (MRTP), 1971.
4. Suspension Agreements: Suspension agreements are the agreements which are finalized between the governments to waive off anti-dumping duties.
5. Protectionism: Due to the growing competitive pressures, most of the governments try to enforce certain regulations or intervene for safeguarding their threatened industries. For example, by enforcing certain trade barriers, the Indian government protects the local industries such as Handicrafts and Textiles. These trade barriers may take the form of either anti-dumping laws, levy of tariffs or import duties, quantity quotas, and various government subsidies.

Competitive Pressures: The increase in the global competition and the challenges enforced due to the competitive pressures, force the organizations in changing their strategies for ensuring their global presence. Japanese majors like Nissan, Toyota and Mitsubishi, have been continuously relocating their manufacturing as well as their assembling operations to South East Asian countries for achieving a competitive advantage in the form of reduced cost of labour and economies of scale.

Changes in the Needs and Preferences of Customers: Changes in the needs of the customers are compelling the organizations to adapt and innovate their product offerings constantly for meeting the changing demands of the customers.

Internal Forces of Organizational Change

Systemic Forces: An organization is made up of a system and several subsystems which are interconnected, just like the way in which a human system functions. The subsystems of an organization are in direct interaction and influence the organizational behaviour as well. A change in any subsystem, result in a change in the existing organizational processes and the complete alignment as well as the relationship.

Inadequate Existing Administrative Processes: Each organization function by following a particular set of procedures, rules, and regulations. With the changing times, an organization needs to change it’s rules and existing administrative processes, failing which the administrative inadequacy might result in organizational ineffectiveness.

Individual/Group Speculations: In anthropological terms, it is understood that man is a social animal whose desires and requirements keep changing with the changing times, which result in differences in individual as well as group expectations. Various factors on the positive front such as how ambitious an individual is, achievement drive, career growth, personal and professional competencies and negative factors such as one’s own fears, complexes and insecurities are some of the inter-individual as well as inter group factors which influence an organizational functioning on a day to day basis and also its overall performance.

Structural Changes: These changes alter the existing organizational structure as well as its overall design. Structural changes can be regarded as a strategic move on the part of the organization’s to improve profitability and for achieving a cost advantage. These changes may take the form of downsizing, job redesign, decentralization, etc. For example, IBM for introducing reforms in its existing system and procedures and for achieving cost effectiveness has enforced downsizing strategy.

Changes in the Technology: Within an organization, the technological changes may take the shape of changes in the work processes, equipment, level/degree of automation, sequence of work, etc.

People Focused Change: In this context, the major focus is laid on people and their existing competencies, human resource planning strategies, structural changes and employee reorientation and replacement of an employee which mean shifting an employee to a different work arena where his/her skills are best suited. It may also be involving establishing new recruitment policies and procedures in line with the changes in the technology.

Issues with the Profitability: This can also be one of the primary causes which compel an organization to restructure (downsize or resize) or to reengineer themselves. The organization may have profitability issues either due to a loss in revenue, low productivity or a loss in the market share.

Resource Constraint: Inadequacy of the resources, may result in a powerful change force for the organization.

Forces of Organizational Change: Planned vs. Unplanned Change and Internal & External Change

In the fast-changing business environment, the contemporary organization’s must learn to be more adaptable and flexible for successfully facing the environmental challenges. Most of the organizational changes are implemented in a planned manner for realizing the specific objectives or goals. However, organizational change can be implemented in any one of the following ways as described below:

Planned Internal Change: Planned internal change can be regarded as a strategic move by the organization implemented with the objective of changing the nature of the business itself or the way in which an organization is doing its business. This can be administered in one of the following ways: by changing the services or the products, bringing a change in the administrative systemic framework and also by changing the organizational structure or its size.

1. Changes in the Services or the Products: An organization usually goes ahead with the decision of a Planned Internal Change, if the management decides to diversify it’s range of business or a need is felt by the management for providing a new direction to the business or reviving the business by adding new service or product lines. Such a planned internal change will require a fair amount of pre-planning, effective coordination and resource distribution as well for meeting the objectives of change.
2. Changing the Administrative Systems: Changes in the administrative systems are implemented or enforced by an organization for enhancing administrative efficiencies, or for improving the company’s image or for gaining the advantage of being a political power within an organization. The pressure to change the administrative systems comes from the top level of the management (top-down approach). On the other hand, if there is a requirement for changing the very nature of work itself in an organization (changing the technical core), bottom-upward approach for the change is usually adopted. Previous studies have identified that organizations which are more mechanistic instead of being organic in its approach, in other words, which are more centralized and formal in nature, tend to achieve a greater degree of success in successfully implementing administrative change.
3. Changes in the organizational structure and size: Organizational restructuring or changes in the hierarchical framework is introduced in an organization for the realization of pre-defined objectives or goals.

Planned External Change: Organizations as a system is governed by both internal factors as well as external factors of change. Various factors like technological innovation and advancements in the communication and information processing field come under this category. These factors are external in nature but somehow are introduced in an organization in a planned manner with the objective of enhancing work efficiencies and improving the overall productivity.

1. Technological Innovation: Rapid technological changes have necessitated a change in the ways in which the contemporary organizations function. Technological development has altered the ways in which people handle their jobs. For example, in the automobile industry, a large part of the design and manufacturing process has been automated and equally depends on IT. Siemens (Germany) holds the credit for being the world’s first paperless office.
2. Advancements in Communication and Information Processing: In the present era, with the revolution in the communication technology and advancements in the information processing technologies like satellite communication technology, fibre optic cables, wireless technology and networking, etc, it has become much easier and convenient for the businesses to communicate with the business partners and also with the clients.

Unplanned Internal Change: Unplanned internal change can be regarded as a change which takes place within an organization not in a planned manner or as a strategic intervention, but are introduced in an unplanned manner in response to either a change in the demographic composition of an organization or due to performance gaps.

1. Change in the Demographic Composition: With increasing number of women workforce joining the organization and in addition to this older employees joining private sector jobs after completing their tenure in public sector or government sector and also increasing composition of diverse workforce in organziation’s as a result of globalization of worldwide economies, the demographic compositions of the workforce has undergone a sea change in the present scenario. The rapid change in the demographies will compel organizations to change.
2. Performance Gaps: Performance gaps associated with an organziation either in the form of depleting profit margins or non-performance of a product line or service in the market or slowdown in sales due to unexpected reasons, can compel an organization to change. Research studies have proven that performance gaps act as propellants for organizational innovations.

Unplanned External Changes: Two crucial factors like economic uncertainties and changes in the government regulations, play a crucial role in compelling organizations to change.

1. Governmental Regulation: Changes in the governmental regulations greatly influence the very nature of business of an organization and how the organizations operate in a highly competitive environment. Due to economic globalization and liberalization, government has enforced changes in the regulations in the form of de-licensing, currency conversion, etc, for supporting the domestic organizations to stay competitive and achieve the expected profit margins.
2. Global Economic Competition: Global economic conditions create competitive pressures on the organizations and force them to change for capturing a decent market share, achieve a winning edge in the international marketplace and expansion of customer base through aggressive advertisement and communication campaigns. In the era of globalization, the formidable challenge for the organizations for staying ahead in the competitive race is to remain innovative and to position itself as a unique brand.

To conclude, it can be interpreted that managing organizational change is one of the most essential pre-requisite for adapting with the competitive challenges and transitioning from the present state of business to a desired futuristic course of action. It is vital to develop and implement a plan of action for managing change successfully.

Systems Model of Change Management and Continuous Change Process Model

Systems Model of Change

The Systems Model of Change or Organization-Wide Change lays more emphasis on the fact that a change must be implemented organization-wide instead of implementing it in piecemeal.

This model provides a whole new dimension to the concept of organizational change and describes the role played by six interconnected or interdependent variables like people, task, strategy, culture, technology and design. All these 6 variables are the key focus of planned change. The model has been represented in the diagram below:

1. People: This variable involves the individuals who work in an organization. This would take into consideration the individual differences in the form of personalities, goals, perceptions, attitudes, attributions and their needs/motives.
2. Task: The task is related to the nature of work which an individual handles in an organization. The nature of the job may be simple or complex, repetitive or novel, unique or standardized.
3. Design: This variable refers to the organizational structure itself and also the system of communication, authority and control, the delegation of responsibilities and accountabilities.
4. Strategy: The organizational strategy is the road map of action for realizing the future goals both short term and long term in nature. Strategic Planning involves identification of existing resources, a careful assessment of internal strengths and weaknesses, identifying the opportunities in the environment and threats as well for a competitive advantage.
5. Technology: It takes into consideration the advancements in the technology in the field of IT, automation, new methods and techniques for enhancing productivity, the introduction of new processes and best practices for remaining ahead in the competition.
6. Culture: It takes into consideration the shared beliefs, practices, values, norms and expectations of the members of the organization.

All the six variables as per the Systems Model of Organizational Change are interrelated and interdependent. A change in a single variable will result in the one or more variables. For example, a change in the organization’s strategy will lead to a change in the organizational structure, devolution of power and authority. This will ultimately be having an affect on the people of the organization in terms of changes in their behaviours or attitudes. Moreover, organizational redesign may result in a cultural change by either modifying or reinforcing the existing culture.

The Systems Approach of Change Management is a useful model, which helps the managers or employees in understanding that a change can never be implemented partly, rather it must be wholistic in nature by taking into consideration all the interrelated variables and their influence on each other.

The Continuous Change Process Model of Organizational Change

This Model of Change views the entire process of change from the top management perspective and considers change to be a continuous process. The Continuous Change process model is a more complex and a refined model than the Kurt Lewin’s Model of Change. This model equally covers Lewin’s concept of change during the Implementation stage.

Source: Armenakis et al., “Making change permanent: A model of institutionalising change interactions”, JAI press (1999).

According to this model, certain forces trigger a need for organizational change and the top management is involved in a problem solving and a decision making process for identifying the alternatives or solutions to the problems. The top management clearly defines their goals or objectives, reforms in the processes or change in the output which is expected to be attained at the end of the process of change.

During the early stages of change management, the top management may seek the support of a change agent, who will be responsible for driving the entire change effort. The change agent may help the management in identifying and defining the problems, or the change agent may also help in generating the alternative plans of action or solutions to the problem. The change agent may be an insider, or an outsider may be an external consultant or a representative from the Head Quarter who might not be known to the employees of the organization experiencing the process of change. With the direction and guidance of a Change agent, an organization administers the change by following the Lewin’s process of Unfreezing, Change and Refreezing.

Measurement, evaluation and control is the last step. During this stage, the change agent as well as the top management, evaluate the degree to which a change has been effectively implemented in an organization and how far it has yielded the desired outcomes. The change agent may play the role of a “Collaborator” or a “Facilitator”, who works with the members of the organization in the direction of defining and resolving the problems.

The Change Agent works along with the individuals, groups, departments and various levels of management through the various phases of change process. The Change agent implements new ideas and provides alternative approaches to the organizational members for dealing with the problems. During the phase of measurement, evaluation and control, the top management evaluates the effectiveness of change against the pre-defined indicators.

Transition Management is the process of systematically planning and implementing the change for transitioning an organization from its current state to a desirable futuristic state. The organization is neither in the old or the new stage once the entire process of change begins.

The process of transition management ensures that the business should continue while the change is taking place. The representatives of the management team act as the transition managers and coordinate in the process of change management along with the change agent. During this period of transition, interim management structures or interim positions may be designed or created for ensuring proper control and continuity of business. Effective communication with all the key stakeholders play a crucial role in the entire process.

Importance of Communication in Change Management

For implementing a change program successfully, communication is the key and one of the most complex parameters as it involves an exchange of ideas and feelings with people in an organization through various mediums. It is one of the toughest issues which an organization is faced with during the entire process of implementation of change. Effective communication must involve the following components:

• The message which is being sent by the individual must be clear and vividly presented. The message must radiate authenticity and genuinity.
• The recipient of the message must listen attentively, ask questions for clarifications and share feedback on the interpretation of the message.
• The method of delivery of the message must be compatible with the circumstances of both the sender of the message as well as the recipient.
• The message content must be able to connect well with the beliefs and thoughts of the recipient for being able to be acceptable.

In any change management program, it is the people who are fundamentally being affected by the change initiatives and it is the people who extend their cooperation and support to make the change happen. Without the involvement and motivation of the key stakeholders, it is impossible to expect success from any change program, as it is them whose interests are either positively or negatively affected due to the change initiatives.

The stakeholders’ involvement, commitment, and acceptance in the entire change process is very important for achieving successful results from the change management program. For this, the stakeholders must be made well informed about the purpose or the objectives of change, and they should be provided an opportunity to share their own ideas in the process of implementation of a change program. Research has proven that if a change is implemented in a consultative and an open manner it results in much effective outcomes in the overall process.

The Purpose of Change Communication

Research has proven that in the absence of a proper communication plan, the entire change process may turn into a fiasco. Overcommunication or no communication are both undesirable as due to this the whole effort of change can be derailed. In the absence of sufficient two-way conversation or effective communication across all the levels, the change effort may fail to meet its objectives. If a communication plan is designed efficiently and clearly, it helps in building awareness and in getting the subsequent support in the entire program.

The communication continuum presented below shows how effective communication influences the stakeholders in building commitment towards the change.

The communication plan must be an integral part of the change plan addressing the questions of how, what, when and why of change from the people’s perspective. Like the other documents of planning, the communication plan should also be documented and be subjected to periodic reviews.

The importance of Stakeholder Analysis in Change Process

Stakeholder Analysis can be considered as the foundation tasks before preparing and implementing a communication plan during a change process. The more complex the nature of change is, stakeholder analysis becomes all the more an imperative task as any implementation of change might be subjected to resistance due to one or several reasons from the stakeholders. Stakeholder analysis helps in minimizing the possible resistance from the participants in the change process by understanding the requirements and expectations of the key stakeholders who are directly or indirectly being affected by the change. Stakeholder analysis can be useful in the following ways:

• Identifying the key stakeholders or the stakeholder groups as well and their influence on the change.
• Understanding the prevalent attitudes towards their change and how this may influence the overall process.
• Identifying the needs of communication and the possible risks involved if the needs are not met.
• Determining the various methods for communicating the messages as well as the timing of delivery of these messages.

Fundamentals involved in Change Communication

The following factors participate in communicating change approaches successfully:

Communicating the Change Vision Clearly and Doing it Early: This is the most important stage as it involves communicating the vision of change and what the organization will achieve at the end of the change effort. The vision should be described in simple form, must be clear and must be able to influence people strongly in implementing decisions. The earlier the vision for the change is communicated, the easier it will be for the people to be able to adapt and understand the nuances of change.

Highlighting the Benefits and the Impacts of Change: Effective communication plan during a change process helps in controlling the inertia or fears due to a change by explaining how the change will affect the people associated with it and why it is being implemented.

Ensuring that the Leaders of the Organziation actively communicate in the entire process of change: The leaders of the organization must convey how important the change is and must reflect their personal and visible commitment towards the entire process of change, as this will be sending a powerful message to the key stakeholders about how seriously an organization is committed towards the implementation of change.

Using various channels or mediums for communicating the message of change: Care should be taken in understanding how people learn about change from different mediums of communication. For visual learners, documented materials may best appeal and help them in understanding the change vision and for effective listeners, importance should be given to the presentation style and selection of words for impressing such category of stakeholders.

Providing Opportunities for Exchange of Dialogue or Conversation: Providing opportunities for discussion and facilitating a two-way communication with the stakeholders creates a sense of ownership and fosters a sense of responsibility among the stakeholders.

Repeating the Messages of Change Periodically: Regular communication of the change message facilitates a greater understanding of the objective of the change and there will be a much greater probability that people will act in accordance with the requirements of the changing situation and extend their cooperation accordingly.

Action Research for Successful Organizational Change

Action Research is a useful method for facilitating organizational change by collaborating and involving the client in the entire process of diagnostic, problem identification, experiential learning, and problem-solving process. The entire process of action research is action oriented with the objective of making the change happen successfully. The process equally involves experimentation with the various frameworks in practical situation and application of various theories in various contexts which require change.

In other words, the process of Action Research requires three distinctive stages which are consistent with the Lewin’s Model which describes the three stages of change.

1. Diagnosing the need for change (unfreezing)
2. Introduction of an intervention (moving)
3. evaluation and stabilization of change (refreezing)

The most commonly used model of action research which is used in the contemporary scenario is Warner Burke’s 7 Step Action Research Model. These 7 steps are Stage of Entry, Contracting, Data Collection, Providing Feedback, Strategic Planning, Planning & Designing Interventions and Evaluating the success of Interventions.

Advantages of Action Research Model

1. A Systematic Approach to Problem Resolution and Dealing with the Challenges of Business
   • Action Research Model improves an organization’s preparedness in proactively responding to the change by anticipating the change in advance and developing the internal mechanisms.
   • Action Research Model is highly methodical and adopts a step by step approach which helps the OD professionals in planning and implementing interventions directed towards improving the organization’s competitiveness and business situation.
   • The Model takes into account all the problems in a holistic manner, and it is equally ensured that the problems are addressed proactively with effective solutions.
2. Helps in Analysis of Issues and Developing the Interventions Accordingly
   • Action Research focuses on converting the information into action.
   • It is helpful in identification of the requirements of the client and the existing/potential challenges, development of a contract which involves definition of the key deliverables and the working relationship, data collection and identification of gaps/ root causes of the issues, analysis of the data for setting the priorities and the plan of action, deciding on the appropriate interventions and developing a plan for implementing the interventions for achieving the intended objectives.
   • Implementation of successful change programs on a short-term as well as long-term basis.
3. Facilitates a Learning Culture
   • The data collected in the entire process can be used in diverse areas such as the implementation of quality tools for continuous improvement, strategic planning, change management, decision making & problem solving, communication process and organizational restructuring, leadership development and implementation of process improvement initiatives.
   • Fosters a deeper understanding related to the organizational functioning and the challenges; provides best alternatives or strategic solutions for handling a problem at hand or various organizational issues.
4. Key Involvement of Senior Leaders and Various Stakeholders
   • In the entire process of Action Research, the Change Agents act as the champions of change who effectively take charge of the entire process as process experts, provide feedback and are involved in extensive communication with the key stakeholders across various levels. They involve the top management professionals as well as the stakeholders in the process, as without their consent and involvement the objectives of change implementation cannot be achieved.
5. Facilitates Collaboration
   • The change agent collaborates with the client in the process of identification of problems and accords specific ranks to the problems, devises techniques or methods for identifying the real cause of the problems and develops effective plans offering realistic as well as practical solutions for addressing the problems.
   • Helps in fostering mutual trust and interdependence which are very essential in the pursuit of organizational success.
   • Helps in Rebuilding the Organizational Culture and involves the confidence as well as people in the entire process of organizational change, which otherwise wouldn’t have been possible if the authoritarian style of leadership would have been exercised.
6. Results in Performance Improvement in all areas
   • The Action Research Model adopts a comprehensive approach to identifying the areas of improvement in all areas which may affect organizational functioning and success in the long run.
   • The process leads to a long-term improvement in the performance from all perspectives by building a learning environment, facilitating knowledge and skill transfer in a better manner and following a structured/systematic approach for organizational improvement.
   • Helps in achieving the strategic goals of the organization by facilitating an alignment between the strategic objectives and the goals of the action research intervention.
   • The process of action research helps in leadership development by developing their facilitation skills, developing team building and team management skills, understanding the issues of the team members and working collaboratively for realizing the pre-defined objectives.
   • Action Research views an organization from a wholistic perspective instead of paying importance to the individual subsystems of the organization in parts. This helps the leaders in visualizing a bigger picture and in implementing a roadmap of action or plans for improving organizational performance and overall productivity.

Psychological Contract and Change Management

The term Psychological Contract gained popularity during the 1960s when its description and definitions were mentioned in the studies of behavioural and organizational theorists Chris Argyris and Edgar Schein. Since then, many other theorists and experts have contributed their insights on this subject and propounded several approaches or studies which have unveiled newer perspectives on this topic.

Psychological Contract explains those vital aspects which influence workplace relationships or the human behaviour in an organization. It is a complicated and deep concept, which is still under research and several theoretical studies and interpretations have been attached to it. Primarily the term Psychological Contract focuses more on the dynamics of a relationship between the employer and the employees, is concerned with the mutual expectations in relation to the inputs and the outcomes.

In one of the definitions of Psychological Contract, more focus is laid on what the employer owes to their employees. It has been defined as “the mutual perceptions of the employers and the employees regarding their mutual obligations at work towards each other”. These obligations may be inferred, imprecise in nature, can be understood as some kind of promises or defining of mutual expectations and failure to meet the expectations lead to a breach of trust or faith.

Professor David Guest of Kings College, London has propounded a useful model on Psychological Contract (Guest and Conway 2004).

Following are the salient features of Guest Model of Psychological Contract:

• The psychological contract largely depends upon the extent to which the organization’s adopt and implement effect people management practices to promote the welfare of the employees and fulfill their expectations through employee-friendly practices.
• Employee commitment and satisfaction will increase if the psychological contract is positive, which is largely governed by the state of belief of employees that they would be treated fairly or transparently and that the employers are working upon their committed promises or the deal which was finalized mutually.

In the present scenario, the employee’s interpretation of psychological contract largely depends on job security, fair pay, fair treatment and ample opportunities for training & development. The employment relationship has witnessed a change owing to the challenges of the globalization of economies and changes in the way in which businesses are functioning in a global platform. Few academicians like Rousseau (2004), have explained the distinction between Transactional and Relational Contracts. The term relational contract is having a broader connotation, which essentially focuses on the quality of relationship which exists between the employer and the employee. On the other hand, the transactional contract is more focused and defined more tightly by laying more focus on the tangible advantages such as working conditions and pay. In the contemporary scenario, importance is given to transactional contracts over relational contracts.

Research evidence in the recent period reveals that the Generation X or so-called Generation Y employees prefer a sense of excitement, community feeling or involvement and life outside the work. They expect to be respected and to be treated as humans. According to Woodruffe (1999), in their thesis stated that employees essentially want their requirements to be fulfilled:

• The Employee Reward and Pay Package: Attractive rewards and conditions of work help in the retention of the best of the talent and improves the overall employee productivity and work commitment. Moreover, the employees should equally need to feel that they are being treated fairly with regards to pay for achieving a positive psychological contract.
• Employability: This essentially focuses on career advancement opportunities for the employees and opportunities for personal growth and professional development by being a part of an organization. Recent researches of CIPD reveal that employees love to be associated with that organization that they feel they will be proud of by working for them. It is due to this reason, the employers are adopting employer branding strategies in their day to day recruitment and talent management practices.
• Job Satisfaction: Woodruffe identifies the following factors which may have a direct linkage with the job satisfaction of employees and in turn will have a positive effect on the psychological contract of the employees. These factors are sense of purpose, achievement and direction, work life balance and harmony, autonomy and sense of involvement, fun at work and a sense of belongingness.

Relationship between Psychological Contract and Change Management

It may not be always possible for the organizations to avoid breaching the deal or the psychological contract, but proactive efforts can be made in terms of explaining the employees the reasons for the change, what needs to be addressed and how it is intended to be handled. Renegotiation of the contract can be made possible. For this, the line managers may be engaged in direct communication with the employees to understand their expectations and issues pertaining to change. Top-down methods of communication should be avoided while renegotiating the contract with the employees. Crucial steps for the managers during the renegotiation of contracts are:

• Give a lot of importance to the people management related issues while planning change.
• Manage expectations by providing early warnings related to the implementation of a change in the organization.
• Seek employee involvement in the entire process of implementation of change. Make them own the change for involving them actively in the whole process.
• Communicate regularly with the employees and share crucial information with them on a regular basis. Maintain transparency in the process of communication for winning their faith.
• Consult the employees on the changes which are being proposed to be introduced or implemented across the organization and how the employees will be benefitted or their expected codes of conduct.
• Line Managers role during this stage is extremely critical. The complete success will depend upon the manner in which the line managers communicate with the employees.

In a nutshell, it may be concluded that management of change is a complicated process and if not planned and implemented properly may land up the organization into a problematic scenario. Hence effective change management requires a carefully planned and a coordinated effort with complete involvement and committed approach from the employees involved. Psychological Contract and the research evidence which has been shared through this article may provide a guiding framework to the HR functional department in implementing best practices in HR and best people management practices for deriving maximum success from the implementation of change initiatives across the entire organization.

Emotional Competence Framework and Change Management

The term Emotional Competence is treated as a buzzword in the present scenario and several studies, as well as investigations, have been undertaken to explain the relevance of Emotional Competence in determining both individual employee and organizational success. Emotional Competence plays a crucial role in improving the quality of our life and individuals with high emotional competence enhance their personal, professional as well as relational performances.

As per Daniel Goleman, an Academic Psychologist in his book “Working with Emotional Intelligence”, Emotional Competence influences the performance of employees at work which is largely a learned ability which is based on the emotional intelligence. Emotionally intelligent individuals have a greater potential for learning and demonstrating the practical aspects of emotional competencies for enhancing their quality of life, overall satisfaction, and happiness. In the present scenario, job success largely depends on the emotional competence of employees than on technical competencies and IQ. Emotional Competence is twice as important as is IQ and technical competencies combined. Emotional Competence can further be subdivided into Personal and Social Competence.

Personal Competencies are those which determine how effectively we manage ourselves. On the other hand, Social Competencies focus more on how effectively we can manage relationships.

Personal Competence

Self-Awareness: Understanding of one’s own internal strengths, intuition, preferences, and limitations as well through self-assessment and analysis. This can take three forms:

Emotional Awareness: Understanding one’s own emotions and also its effects. Individuals having this competence are good at:

• Understanding which emotions they are experiencing and the reasons associated with it.
• Understanding the connectivity between what they feel and why they think, behave or talk in a particular manner.
• Recognizing how the performance is affected by their feelings.
• Having a clear awareness of personal values as well as goals.

Accurate Self-Assessment: Having an accurate assessment of one’s own strengths as well as weaknesses. People having this competence have the following competencies:

• Have a clear idea about their personal strengths as well as weaknesses.
• They learn from experience and are reflective in nature.
• Are open to transparent and a fair feedback, new ideas, continual learning, and self-improvement.
• They have a good sense of humour and a clear perspective about various propositions.

Self Confidence: This implies being sure about one’s own self-worth as well as capabilities. People who have this competence are capable of:

• Maintain a presence of their own and project them with a sense of confidence.
• Do have the guts for voicing out unpopular views and assertively speaking out what is right.
• Are good at making and implementing sound decisions under challenging or pressurizing circumstances. They are highly decisive.

Self-Regulation

Self Control: People with a good sense of self-control are capable of managing impulsive feelings or disturbed emotions. People having this competence can effectively:

• Manage their distressful emotions as well as their impulsive feelings.
• Have a good ability to maintain their calm and composure even under testing circumstances.
• They remain focused and possess a clear sense of perception even under pressure.

Trustworthiness: This is about maintaining high standards of integrity and honesty. Individuals with this competency can:

• Can behave and act in an ethical manner.
• Can establish trust by way of being reliable and authentic.
• They readily admit their personal mistakes.
• They have a strong capability of taking difficult stands even if they are unpopular.

Conscientiousness: Individuals with this kind of competence:

• Are capable of meeting the commitments, and they believe in living up to their promises.
• They have a strong sense of personal accountability for achieving their predefined objectives.
• Are much organized and extremely careful while handling their work assignments.

Adaptability: Individuals with this kind of competence are much flexible towards dealing with the change:

• They can proactively handle rapidly changing priorities and demands
• They mould their responses as per the requirements of the changing circumstances.
• Are very much flexible in responding to various events or circumstances.

Innovativeness: Individuals having this kind of competence are quite creative, can think outside the box and are open to new ideas.

• They explore fresh ideas from various sources.
• Give importance to original solutions to various problems.
• They are innovators and are good at new idea generation

Self Motivation

Achievement Drive: Individuals with this competency are driven for achieving superior benchmarks at work and achieving excellence. Such individuals are:

• Are highly objective driven.
• Establish challenging goals and work towards it by taking calculated risks for reaching their goals.
• They try to identify or explore alternate ways of working by gathering information and details.
• Acquire skills and the desired learning for achieving continuous improvement in performance.

Commitment: Individuals having this competence are:

• More capable of making individual as well as sacrifices in the group for realizing the larger goals of the organization.
• They are guided by the core values of the groups in implementing decisions and making choices.
• They explore the opportunities or possibilities for achieving the group’s mission.

Initiative: People having this kind of opportunities:

• Proactively tap the available opportunities or work towards the potential opportunities.
• Set super-ordinate goals and work hard for realizing their goals
• They are capable of changing the rules and deal with red tapism when it comes to completion of their jobs.

Optimism: Individuals with this competency are:

• Persistent in working towards their goals despite their limitations and setbacks.
• Are guided by the hope for achieving success in their initiatives instead of the fear of failure.

Social Competence

Social Awareness:

Empathy: It means understanding the feelings of other individuals by stepping in their shoes and showing a concern towards them:

• Empathetic Individuals are active listeners and pay attention to emotional signals.
• Are more sensitive and understand other’s perspectives.
• Extend help by analyzing other’s needs and requirements.

Service Orientation: Individuals having this competence:

• Understand other’s needs and try to match them with their products or the services.
• Explore the possibilities to enhance customer loyalty by achieving higher satisfaction.
• Offer the required assistance comfortably.
• They provide the right kind of advice by understanding the perspective of the customers.

Facilitating Others: Individuals with this competency are good at:

• Acknowledging and rewarding people’s strengths, achievements and improvements.
• Provide constructive feedback and develop people by assessing their developmental requirements.
• Provide ample opportunities for growth by offering challenging assignments, coaching and mentoring teams.

Leveraging from the Diversity: Individuals with this competency are capable of:

• Relating well with the people from diverse backgrounds
• They are very much sensitive to worldwide views and diverse opinions in the groups
• They consider diversity as an opportunity and create a conducive environment where diversity can create further opportunities.

Politically More Aware: Such individuals are politically more aware and have a good understanding of the power relationships.

Social Skills

Influence: Individuals with such competence are more persuasive, can efficiently gather support and build consensus by using complex strategies and can deliver presentations that are appealing to the listeners.

Communication: People with such competence are capable of sending effective and clear information or messages, can deal with difficult issues comfortably and focus on open communication.

Leadership: Leaders are capable of inspiring and guiding people for driving superior performance. They always lead by setting good examples for their teams.

Act as Catalyst of Change: As catalysts of change they understand the need for change and try their level best to remove the barriers to change through effective strategies.

Conflict Management: People with such competencies are capable of negotiating the differences and resolve conflicts by devising win-win solutions and encouraging open discussions.

Facilitating Nurturing Relationships or Strengthening Bond: The individuals with this kind of competence are capable of developing mutually beneficial relationships.

Improving Team Capabilities and Facilitating Cooperation or Collaborative relationships: Such Individuals work towards shared goals and work towards synergy.

Characteristics and Capabilities of Successful Change Agents

Change agents act as the champions or change catalysts. The change agents may play the role of a consultant who assists the client in strategically identifying and implementing solutions for overcoming organizational problems. They play the role of a facilitator and train the client on new skills, changes in the processes, vision, mission and organizational philosophy. For efficiently handling such diverse roles and building facilitating mechanisms, change agents must possess some special characteristics which would distinguish them from others. In the opinion of Morris and Shaskin, change agents should be an “extrovert, must have effective interpersonal skills, needs to be creative and a risk taker, and should be good at organizing various activities as per the requirements”.

Havelock and Shaskin identified some of the important characteristics of change agents as well as the organizations which they have denoted by an abbreviation HELP Scores. A detailed description of these characteristics is given below:

1. Homophily: This implies the extent of closeness which exists between the client and also the change agent. The change is expected to achieve successful outcomes if the extent of closeness is higher between them.
2. Empathy: The change agent should be empathetic and should be able to understand the other person’s emotions and thoughts. This understanding will strengthen client and change agent’s relationship; will improve communication which in turn will favorably influence the change.
3. Linkage: Linkage implies the extent of collaborative relationship which exists between the client and the change agent. The stronger is the bond, the more likely is the possibility of achieving success from a change implementation.
4. Proximity: The client, as well as the change agent, should be readily available to each other, it’s because greater the accessibility, stronger will be the bond or the relationship between the two.
5. Structuring: This involves effective and a step by step planning of various activities associated with the implementation of change. Effective planning maximizes the possibility of achieving success in the change process implementation.
6. Capacity: This factor is connected with the organization’s capability in providing the required resources which are essentially needed for successfully implementing OD interventions and the change.
7. Openness: It refers to the ability of a change agent as well as the management in facilitating an open environment for building facilitating mechanisms and fostering mutual respect, trust, and sensitivity towards the feelings of others. The greater the degree of openness, the greater will be the possibility of achieving successful outcomes from change implementation.
8. Reward: Any change initiative should have the potential for benefitting the beneficiaries both in the short run as well as in the long run. The higher the potential for rewards, greater will be the expected commitment of the participants in implementing the required change.
9. Energy: Energy implies the extent of efforts applied for making change realizable. Energy involves both mental as well as physical energy, directed in a focused manner for achieving synergy in the outcomes.
10. Synergy: By synergy we mean the sum of two or more is greater than the parts. Synergy in outcomes happens when all the above-mentioned factors are combined with the right set of people, resources, and activities.

What Change Agents are Capable of Changing

Change agents are capable of enforcing change broadly in four areas: Structure, Physical Setting, Technology, and People. Structural change is all about making changes in the organizational structure, authority and hierarchical framework, job redesign, and various other structural variables. Change in technology implies a change in the techniques, methods, processes or best practices or the way of working itself. Change in the physical setting involves a change in the layout and also the spatial arrangements. Change agents also facilitate a change in the attitudes of people, skills, behavior and also their perceptions.

• Structural Changes: Change agents hold the responsibility of making modifications in the organizational structure as per the changing circumstances or due to the growing pressure from the competitive or environmental forces. Organization structures are not designed concretely, and it keeps changing or is altered as per the changing requirements.A change agent may alter one or other elements of an organizational design. For example in a flatter organization, the organizational structure can be made less bureaucratic, various departmental roles which are interconnected can be combined, vertical layering can be removed and equally the span of control may be widened. Additional rules and regulations can be enforced for standardizing key areas of functioning. The change agent may introduce decentralization, can establish project teams or a matrix design for working on specialized projects. The change agents upon assessing the conditions of work; can be involved in job redesigning or work schedules, flexible work schedules, job enrichment, may modify the compensation structure and may introduce performance related bonuses or profit sharing.
• Technological Changes: Technological changes deals with the introduction of new techniques of work, methods, new types of equipment, computerization or automation of the key functional systems of an organization.With ever increasing competition and the growing need for being innovative for maintaining a leadership edge amongst the competitors, change agents resort to the introduction of technological changes. For example, if we analyze the manufacturing organizations, modernization and best practices in production are being introduced just to cut the cost of manufacturing.
• Changes in the Physical Setting: Changes in the Layout or Physical Settings is not decided over nightly or randomly. Based on the demands of work, requirements of interacting formally and also the need for socialization, the decisions related to interior designing, space planning, etc, are finalized accordingly.
• People Related Changes: Change agents play a crucial role in facilitating individuals as well as groups within the organization so that they may work collaboratively. The change agents change the attitudes, behavior or the mindset for people by using OD interventions as per the requirements of the circumstances.

Key Factors in Effective Change Management

Successful organizations evolve at lightning speed for remaining competitive and gaining a winning edge across the industry. This can be fulfilled by building the adaptive mechanisms and proactively dealing with the environmental pressures and responding to the changing needs of the present times. By adopting a holistic approach, visionary leadership as well as support from the people and identifying the triggers of change and innovatively responding to the triggers, organizations can effectively address the challenges involved in the entire process of change management.

Effective change management involves a systematic approach which facilitates an understanding of the bigger picture instead of just the functional parts. Change Management is future driven and must include the strategic and tactical elements for realizing the futuristic goals of any change program.

Key factors which are involved in the effective change management process have been described below:

1. All Pervasive Nature of Change: For a greater impact, change process must be looked at from a holistic perspective instead of parts. Any change process will fail to meet the collective goals of an organization or achieve the desired results unless it is implemented in an integrated manner.
2. Effective Management of Change Should Have the Support of Senior Management: This is one of the most important requirements for achieving the successful outcomes from a change management process, without which the entire efforts will fail. This is because top management or the leadership provide vision and direction for implementing change in a planned manner. Moreover, senior management plays a crucial role in setting up the desired systems and processes in place, establishing the required operational framework and help in establishing the functional departments for implementing change successfully at various levels. Thirdly, senior management enjoys the official power and the authority to implement change.
3. Multidisciplinary Nature of Change: Change is multidisciplinary in nature, as a result of which project teams are set up for ensuring the success of a change management project and realizing the core objectives. Any change program cannot be implemented with the efforts of any one individual singlehandedly. Rather it involves a well coordinated and a collaborative approach from various stakeholders. This involves selection of problem owners because of their association with the change and also recruitment of change agents who take the responsibility of facilitating change through the entire process.
4. People: The most important factor in the Change Management Process: The most crucial organizational resource is People and one of the precious assets which determine the success and growth of an organization. Hence, it can be aptly described that change management is entirely about people management and hence involving the people at each and every stage in the process of change management is very vital. By involving people, their level of commitment will rise, and they will act as drivers of change instead of reacting to it.
5. Change is About Continuous Improvement for Achieving Success: A change project should be taken as a mission, and all the efforts must be directed for the fulfillment of that mission in order to achieve success. In the era of cut throat competition, organizations which are receptive towards change and have a flexible system as well as an open culture, emerge as winners in the competition by raising their efficiency bars and improving overall effectiveness. For achieving success in any change endeavor, set goals which can be achieved and can be delivered by analyzing the competitive pressures and the threat from the external environment.
6. Change Management is Perpetual: Change Management process is an ongoing process and demands attention from various fronts which include: assessment of the triggers which propel change, vision and planning which means developing a futuristic roadmap and involving people in the entire process for making change realizable. In this way, the entire process of change never comes to an end rather it witnesses a cyclical process and hence is considered to be a perpetual process.
7. Effective Change Management Process Require the Involvement of Skilled Change Agents: The Change Agents greatly have the responsibility of ensuring the success of change initiative by demonstrating the required competencies at work. Over and above the knowledge level and functional skills, the change agents should be capable of connecting easily with the people and should be able to communicate and convince people about the change. The change agents should be skilled at dealing with the emotional upsurges of the people which may arise as a result of the change, should be comfortable in handling conflicts and dealing with ambiguities.
8. There is No Best Methodology for Change Management: For effective change management, a singular approach can never effectuate the desired results as what holds good for an organization might not be good for the other organization as the circumstances govern it. The best solution for this is to use an organizational development methodology, or a set of interventions can be adopted for driving effective results from change management.
9. Successful Change Management is all about Ownership: Change Management must involve collective ownership from all the key stakeholders including management for their strategies and decisions, change agents for facilitating change and seeking the support of people, problem owners who are directly involved in the change and also the people. If people are involved in the process, they will be more committed and contribute actively towards the realization of the end goals of change.
10. Change Offers Opportunities and Challenges, is all about Fun and Passion: Challenges drive the best of the outcome from the people and improves the crisis handling capabilities of people to emerge as the winners eventually.

Battle Between Change Agents and Status Quo Interests in Every Organization

The Battle between Change Agents and Status Quo Adherents

Every organization has its change agents who seek to take risks, disrupt the status quo, and introduce changes to steer the organization in a particular direction.

On the other hand, there are also those who advocate the Status Quo and want the organization to treasure stability and safety as well as predictability and order who are opposed to the change agents.

Indeed, the running battles between these two opposing forces are the hallmark of all organizations whenever they try to change direction or let go of the old ways of doing things. How well organizations navigate the undercurrents of tension between these two sets of individuals determines the success or failure of the organization.

Who is a Change Agent and who is a Status Quo Adherent?

To define a change agent, he or she is an individual who is not afraid to take risks and who is prepared to venture into the “unknown” and step beyond the comfort zone and thus, make the organization ready for the future.

On the other hand, the status quo proponents are those who want the organization to change albeit gradually and without taking too many risks.

Further, even the change agents do realize that sudden and disruptive changes can wreak havoc on the organizational fabric and hence, they sometimes take the slower route to change.

Thus, both change agents and those who prefer the status quo have to be understood in a nuanced manner wherein nothing is in black and white, and there are shades of gray all around.

Change is necessary and inevitable, but, there is a way to change

Having said that, one must also consider the possibility that when organizations are at an inflection point where they do not have to be ready for the future and must indeed leap into the disruption, they do face existential crises wherein the battle lines get drawn very sharply and the top leadership and the board members divided along the divisions of the change agents and those who favor the status quo.

In these times of extreme disruption and chaotic change, this is when the resilience and the inherent strength of the organization are tested wherein even the fence sitters, and the moderates have to take sides between the change agents and the status quo adherents.

The Example of Infosys

Take for instance the example of the Indian IT (Information Technology) bellwether, Infosys. Once the founders left and brought in an outsider, Vishal Sikka, who was not afraid of experimenting with change and venturing into unknown futures and disrupting the organization and its ethos, the battle between the old guard and the new and brash group became bitter and spilled out into the open.

Indeed, the recent skirmishes between the board and the founders which led to the latter ensuring that the former steps down is a typical example and instance of an organization wherein the war between those who seek radical change and those who do favor change, but not in such a rushed and disruptive manner.

Change must not tear the Organizational Fabric

In other words, while not all changes are bad, it is also the case that in large and diverse organizations, it is better to change things slowly and glacially instead of blindly rushing through changes that can tear the organization apart.

Indeed, it is not like that the founders were averse to change or that the new team was averse to ensuring stability and predictability. Just that, the new guard felt that Infosys had to change its staid ways whereas the old guard was put off by the brashness and the style of the former which they said would result in the demise of the organization.

Apart from this, change agents who seek to push through changes must also be cognizant of the fact that each organization has a distinct organizational culture as well as ethos and an organizational DNA that constitutes the fabric of the organization. Thus, they must ensure that whatever changes they are introducing do not rupture the basic fabric and disrupt the essence of the organization.

On the other hand, those who prefer the status quo but also welcome changes must be willing to give the change agents some leeway and “cut them some cloth” meaning that they must be ready to tweak the organizational fabric a bit without completely tearing it apart.

When the Moderates and the Fence Sitters have to Intervene

Thus, in any organizational battle between these two groups, it is necessary for the moderates and the fence sitters to mediate between the change agents and the status quo adherents and try and see how best the organization can succeed without losing its way and at the same time, not be trapped in the past.

It is clear that organizational battles are inevitable in these times when change is the only constant and the extreme disruption and the exponential acceleration of business trends mean that organizations must reform or perish.

Conclusion

Lastly, it is also the case that change agents not tinker too much with the spirit of the organization.

In other words, each organization has a particular way of doing things and some values and traditions that it cherishes and no matter how urgent the change or how necessary the change, it is better for the change agents to try and bring everyone on board whenever there are fundamental shifts in the way the organization operates.

Instead of ignoring or brushing away those who have been with the organization for years or even decades and are used to defining themselves in the particular ethos and culture of the organization, they must listen to them.

To conclude, change is inevitable, but at the same time, change must not lead to the demise of the entity in which changes are being introduced.

Managing the Transition from Hierarchical to Network Organizational Structures

Introduction

The emergence of the network-based organizational structures and a movement away from the hierarchical structures that were the hallmark of the earlier era presents its own set of challenges to Human Resource Managers (HRM) as well as Executive Leadership and Senior Management.

The key aspect of the transition from hierarchy to network and from top down to bottom up as well as from closed to open and from mechanistic to systems based structures is that this impacts the organizations at all levels and calls for astute management as well as skillful navigation of the transition.

Indeed, the way in which contemporary HR Professionals and Business Leaders manage the transition would make the difference between success and failure both in the shorter term and more importantly, the longer term.

The Challenges Inherent to Organizational Structure Transitions

So, what are some of the challenges in this revolutionary shift from authority and control to autonomy and emergence? To start with, Business Leaders have to contend with the possibility of the rank and file employees as well as the middle managers having more freedom in decision-making and which has implications for the way in which organizations function.

Indeed, when the Middle Tier becomes empowered to take decisions which hitherto were being taken by the Top Tier, the challenge is for the latter to “let go” and for the former, to act responsibly and with maturity.

Apart from this, when control is ceded by the top, the Executives must also ensure that the organizational values and culture are not compromised in a rush to autonomy and empowerment.

Maintaining Cohesion and Coherence

Second, another key challenge is to ensure that employees at all levels are aware of the overall sense of what it means to work in that particular organization.

In other words, in networked structures, it is often the case that individual managers and the units of divisions and groups must not be “detached” from the other units so that there are coherence and cohesion within the organization.

The role of the HR Function, in this case, is to ensure that all employees are on the “same page” with the Executives and the Senior Management so that the ethos and the spirit of the organization are not compromised.

Open Communication Channels and the Challenge of Clogged Arteries

Third, the challenge in terms of the transition from Flat to Networked organizations is to ensure that communication flows in a smooth and frictionless manner with no “clogged arteries” resulting in blockages and miscommunication.

In other words, the challenge for the Networked Organizations is to ensure that the individual units do not become “silos” or “Ivory Towers” wherein each unit “talks to itself alone” and not to the others or the Top.

While many management experts recommend Networked structures as a way of avoiding the “silos trap”, they are also acutely aware that even Networked structures can become clogged and hence, they strongly advise the organizations to focus more on people than the structure as organizations are made up of people and irrespective of the structure, it is they who determine the success or failure as well as the longevity of organizations.

Core Principles to be Followed during the Transition

It follows from these challenges that the transition from Hierarchical to Flat and from Command and Control to Systems based structures have to follow the principles of autonomy with accountability, freedom with responsibility, and openness with cohesion and coherence. Let us take each of these aspects one by one and explain what they mean.

First, as has been mentioned briefly earlier, autonomy also means accountability, and hence, flat or networked structures should not deviate from the core organizational principles, and more importantly, they also have to be accountable to themselves and to the external stakeholders.

Next, empowerment of the Middle Tier and the Rank and File employees also enjoins them to behave responsibly meaning that they have to ensure that the saying “With Great Power Comes Great Responsibility” is adhered to at all times.

Indeed, systems thinking entail symbiotic interactions between entities and at the same time, the entities are also required not to lose sight of the “Glue” or the “Organizational DNA” that binds them to the larger organization. In other words, ecosystems of units must also be able to “jell” with the larger macro system and with each other.

The challenge for HR professionals when managing the transition from Flat to Networked structures is to ensure that all organizational policies are communicated to all levels and that the HR function becomes the “internal gatekeeper” which monitors and regulates the flow of communication and keeps the flock together.

In other words, unless there is a larger sense of Vision and Mission, it is easy for the Networked organization to become fragmented and a place where fiefdoms and satraps emerge and who can challenge the very foundation on which the organization rests.

Managing the Transition with Careful Planning and Meticulous Execution

Lastly, any organizational transition is tough and not easy to manage, and this is where the skill of those managing the transition plays a vital role. Further, as management theory suggests, it makes sense for organizations to move slowly initially and then pace themselves keeping with the changes and finally, rolling out the changed structure.

These calls for a thoughtful approach where detailed planning and meticulous execution are needed as well as visionary leadership and a sense of mission are required. To conclude, structural shifts are inevitable for organizations to keep up with the larger external changes and the internal needs and how well, the reorganization is handled would determine success or failure of the transition.

Why it is Becoming Difficult to Change the Status Quo in Economies and Organizations?

The Necessity of Change and Change Agents World Over

World over, the leaders of nations and firms are grappling with the need to change old ways of thinking and change old habits of behavior to face the future that is certainly disruptive and hence, to thrive in the years to come, change would be the only constant that matters.

Thus, the realization that nations, economies, societies, organizations, and the people in them must change or perish in the world to come has certainly dawned on the political and economic elites across the world.

This has led to the emergence of charismatic change agents such as the leaders in India, France, Saudi Arabia, and elsewhere who are cognizant of the need to change and are attempting change through shock therapies as well as glacial steps to transform the status quo.

For instance, in France, the new President, Emmanuel Macron, has called for greater integration of the Eurozone to ensure its continued relevance as well as to ward off threats such as Brexit which was essentially a vote against the European Union.

Similarly, in Saudi Arabia, the emerging paradigm led by the de facto ruler, Mohammad Bin Salman, or MBS, focuses on preparing the country for a future beyond oil and in this regard, he has outlined a vision for the country to face the future and has detailed the steps that are needed to be taken to actualize that vision.

Further, the Demonetization exercise in India was carried out to affect a behavioral change in the people to wean them off cash and ensure that India prepares for cashless future.

Among contemporary organizations, Infosys seemed to have embraced change in recent years though the path ahead is fraught with roadblocks and other deterrents.

Indeed, what all these examples show us are that the necessity of change has been recognized, though, the implementation seems to be faltering.

Hardware of Systems Not Compatible with Software of Change

The reason why bold and ambitious reform programs in economies and organizations are failing or faltering is that the system has proved to be resistant to change. After all, old habits die hard in addition to the old mindsets being like cobwebs that take time to clear and actualize change.

To take an analogy, if the software of changing mindsets and behaviors has to be rolled out, the hardware of supporting systems and processes as well as laws and regulations too need to be changed if the structural changes that are being implemented have to succeed. Indeed, having a vision for the future is one thing and having a clear blueprint and executing it is an altogether different thing.

What is happening right now is that nations and organizations are ready with the software of change, but the underlying hardware or the structural laws and regulations as well as the systems and processes are so ingrained in the older habits and thinking that there is a basic incompatibility between the software and the hardware leading to stymied changes and thwarted reforms.

Change or Perish, and Reform or be Extinct

Having said that, it must be noted that the necessity of change cannot be any more important than it is now since the future would be dominated by accelerating technological progress and exponential change which means that linear thinking and behavior that is stuck in the old ways would lead to the collapse of the systems.

In other words, the writing on the wall is clear and it is that change or perish and reform or be extinct. Thus, the key point to note here is that this message must be percolated to all levels of the organizations and all stakeholders in the nations as well as other entities.

The reason why the structures of organizations and firms are resistant to change is that they are made up of individuals as well as laws and regulations that were enacted decades ago when the future seemed predictable.

However, that is not the case now as almost everyone has realized that the future would be very disruptive and hence, they must be ready to face disruption or be dislocated. This should be backed up by changing laws and regulations and institutions to make them future ready wherein the attempt must be to affect a fundamental change or what is known as a paradigm shift in the way we approach the future.

Indeed, the stakes could not have been higher wherein we risk massive social unrest and much chaos unless we collectively make the choices that would help us navigate the storms ahead.

What we as Individuals can do

This calls for discipline and some amount of personal sacrifice to ensure that future generations would live in a world worth inhabiting. However, the fact remains that most of the change initiatives are failing because they are more optics based meaning that some of them are being carried out to make the change agents look good in front of the cameras as well as massage their egos which is certainly not the way to go.

More Substance needed and Less Optics

Thus, this means that change initiatives must not only be about grand slogans and instead, must be accompanied by a desire to affect a fundamental change. Lastly, what this means for all stakeholders is that there must be a consensus between them wherein the saying, united we stand, divided we fall, would apply.

To conclude, we are at a crossroads in our collective evolution and the choices and changes we embrace now and carry out with discipline and willpower would determine whether we survive the future.

Disruptive Initiatives Must be Well Thought and Carefully Executed to Avoid Chaos

Living through the Age of Disruption

We live in an age of disruption where everything from our way of life to the way we work and indeed, the human biology is being disrupted by technological advances happening at breakneck speed.

While disruption is an integral part of the capitalist and free market model where creative destruction is the norm rather than the exception, such disruption must not lead to chaos where the effects of such disruption are far from ideal and what they were intended for.

There are many examples of disruptive innovation and disruptive governmental policies as well as disruptive organizational changes that have had the opposite effect of what they were intended to achieve.

Disruption that is Poorly Executed

For instance, the much venerated TATA group of corporates initiated a leadership change by bringing in a relatively distant family member (breaking with tradition that was marked by immediate family members heading the group) as a means of transforming the conglomerate. However, as it transpired, the result was that after a few years, there was a very public falling out between the incumbent and the predecessor heads leading to much bad press and washing of dirty laundry in public that did no little damage to the brand image and brand equity in the group. While this organizational change was well thought (at least according to the prevailing view at that time) the change was poorly executed. As a result of diverging opinions on how to grow the group further as well as differing perceptions on mergers and acquisitions, there was a biter parting of ways.

Successful Disruption that is Revolutionary and Transformative

Having said that, some disruptive initiatives lead to revolutionary and transformative effects on the way businesses and indeed the world operates. For instance, both the rolling out of the Windows Desktop Operating System as well as the Apple iPhone was instrumental in changing the game altogether.

Windows led to basic changes in the way corporates operated wherein routine and time consuming tasks were now automated as well as workflow processes were computerized. Indeed, it can be said that the Windows OS release ushered in the software revolution.

Similarly, the release of the iPhone by the Late Legendary Steve Jobs lead to a fundamental shift in the way we lead our lives by bringing in the world to our fingertips. Of course, the internet and the Smartphone revolutions converged with the release of the iPhone in the same manner in which the computing and hardware revolutions dovetailed with the release of the Windows OS.

What these two disruptive initiatives had in common was that they were well thought out approaches to transformative change wherein the individuals mentioned along with an army of dedicated and committed employees ensured that such innovation resulted in Millions of Hours of painstaking work and was underlined by creative inspirations that were truly game changing in nature.

As we know now, the execution was also well done with much attention to the details of the actual procedural aspects.

Difference Between Thoughtful and Well Thought Out Disruptions

Of course, sometimes disruptive initiatives can be very thoughtful it not well thought out in nature. Before you get confused, what we mean is that sometimes disruptive initiatives might emerge after much thought though the details are not well thought out.

For instance, the Demonetization Exercise carried out in India in November 2016 had the potential to be truly transformative except that the move was aimed at fundamental behavioral changes and upending the cash driven Indian Economy to the extent that some experts now believe that the whole exercise was a failure.

In other words, disruptive measures must not only be innovative or the result of creative insights but adequate thought must be given to how they would affect the ecosystem stakeholders who are impacted by the move.

Talking about Demonetization, it is also the case that the execution was poor which lead to unnecessary chaos and confusion some of which continues even now. Thus, one can be disruptive but, at the same time must be creatively destructive instead of causing chaos.

Having said that, the GST or the Goods and Services Tax change was both well thought out as well as carefully planned. Indeed, the change was more than a decade in the making with bipartisan consensus and the close cooperation of the Central and State Governments being the hallmark.

However, the initiatives was not executed well or rather, while the planning for the execution was foolproof, the intended execution was something else. In other words, one cannot have everything and sometimes, the best thought out and planned moves can fail in execution and the most creative insights can lead to chaos.

Managing Disruption

The key takeaway here is that disruption and the after effects are simply unpredictable and hence, it is always a good idea to be “on the ball” and “ahead of the curve” so that as many after effects as possible are managed properly.

As the former Defense Secretary of the United States used to remark, there are Known Knowns, and Known Unknowns, and Unknown Unknowns. Thus, the trick is to plan for the first properly, execute diligently managing the second, and keep one’s fingers crossed for the third.

This means that while there are some things that we just cannot be prepared for, the fact remains that we must at least think through the things in our control and execute with the intention of managing the unknowns.

Future Shock, Present Shock, and the Fourth Industrial Revolution

What is Future Shock and what are Its Characteristics?

In the 1970s, noted Futurist, Alvin Toffler, coined the term Future Shock to describe the then emerging services sector in what was essentially a manufacturing and industry led economy.

In the book, Future Shock, he explains that the world was then witnessing a shift from what he called the Smokestack Era (to illustrate the predominance of the manufacturing sector) to an Era where people would be working in services firms such as Software and Financial Services.

He goes on to predict the dominance of the services sector in a few decades which in hindsight has proven to be true. This is not surprising since Toffler was a Futurist par excellence who could see patterns and discern trends and predict the future.

Further, he describes how the collision of the two eras was causing people and society and economy in general to be disoriented and shocked by the imminent arrival of the future and thus, the term Future Shock.

Indeed, given the fact that the then emerging future did cause large scale changes in the way economies functioned and societies operated as well as in the way the employer employee relationship changed, it was indeed a time of profound dislocation and disturbance.

We suggest to our readers to pick up a copy of this book or at least get a summary online to understand the past and more importantly, make sense of the present times.

Relevance of Toffler to the Present Times

Talking about the present times, the relevance of the book and Toffler to where we are now can be seen in the way the emerging Fourth Industrial Revolution is reshaping our economies and altering our lifestyles in ways that are eerily similar to the ones that our parents and earlier generations experienced.

The Fourth Industrial Revolution is a term used to describe the emerging technological changes and Smartphone and Mobile led computing that has enabled us to become digital in all facets of our lives.

In addition, not only our jobs and lifestyles are changing, other sectors such as Medicine, Transportation, Urban Systems, and the very nature of our democracies is likely to be changed due to advances in the human and physical sciences not to leave out changes in engineering and manufacturing.

All these changes have led to disorientation in our ways of life where we begin to adjust to the New Normal that is digital and powered by robots and enabled by exponentially accelerating technology.

Brave New World Enabled by Technology

This has enabled by a revolution in computing that has made possible Genetic Mapping, Virtual Reality, the rise of Freelance, or Gig Economy. Further, there has been a shift in the way power works wherein top down and hierarchical modes of power relationships have given way to network and bottom up as well as horizontal tier relationships wielding power.

In addition, changes in the way healthcare functions wherein advances in genetics and robot powered surgeries means that the traditional methods of healing are now being replaced by an entirely new paradigm.

Indeed, even the way in which funding of projects and ventures is done is changing with the advent of Crowdfunding and Crowdsourcing, which means the power of many is more important than the power of one.

No discussion on the Fourth Industrial Revolution is complete without referring to the AI (Artificial Intelligence) powered and Big Data driven Algorithmic media and marketing sectors where our Facebook News Feeds, Twitter Feeds, and any online news website contains content that is generated by machine algorithms using these technologies.

It is safe to say that our entire way of life and our work styles and our systems are now driven more by technology than by humans.

Is Future Shock Leading to Present Shock?

Thus, what we are now going through is the collision of the old and the new that Toffler described in his book. In addition, while the imminent arrival of the future is shocking us, it is also the case that many of us are tending to live in the present and for the now instead of preparing for the future.

Indeed, as can be seen from the rising debt levels among Millennials and the increase in credit card debt, what we are essentially doing is borrowing in the expectation of future returns which can be unpredictable.

This has led to many being under what is known as Present Shock where we turn to our devices as a reality avoidance measure and to momentarily forget ourselves in the seductive glow of our Smartphone screens.

Another futurist, Douglas Rushkoff has coined the term Present Shock, to describe how all of us are blindsided by the present. While living for the present and for the moment is something that spiritual teachers recommend, the fact remains that in the real world, we need to work and save for the future.

While 24/7 news cycles and Breaking News cultures provide instant gratification, they also lead to what Rushkoff called collapse of narrative and a general tendency to say and do things that have negative longer term consequences.

Hence, while the future is both exciting and bewildering, we also need to avoid disorientation by methodical planning and rigorous hard work instead of avoiding tough choices by immersing ourselves in the present.

The trend of Smartphone Addiction and overuse of devices points to such disorientation and Future and Present Shock. To conclude, the emerging generation has a chance to transform the world in ways that were never imagined. It remains to be seen whether they rise to the occasion.

The Changing Nature of Power in the Age of Networks

The Power of Individuals against Establishment Figures

The Digital Age has upended many things and this includes the way in which power works and how it is wielded between the various stakeholders in business, life, and society. While hitherto, power was wielded in a top down fashion where hierarchical modes of organizational structures meant that decisions were taken at the top and percolated as orders down the hierarchy.

However, this is changing wherein the rise of networks in both corporates and politics and society means that individuals who can harness the power of such networks often wield more power than those at the top.

Indeed, as the MeToo movement showed, anyone with a compelling narrative and the ability to make viral their messages often bring down establishment figures that have so far enjoyed immunity from accountability because of their exalted position in society.

When truly established and establishment figures such as Harvey Weinstein can be brought down by Twitter and Facebook enabled viral dissemination, then one can gauge the extent to which power now rests with those who leverage the Age of Networks.

The Blowback from the Establishment

Having said that, it is also the case that the establishment is fighting back against this kind of power. For instance, there are moves to rein in the Social Media networks such as Facebook in terms of how they can be used or misused (depending on where you sit and which side of the debate you are on) and hence, bring them under greater regulatory scrutiny.

Indeed, used and misused are the terms that indicate the allegations and counter allegations of various parties where each accuses the other of using social media to its advantage. Whatever may be the position or your opinion, the fact remains that Networks have a momentum of their own and hence, those who seek to shape public opinion are those who can use networks to their advantage.

Further, the argument that technology is value neutral and hence, it can be used for both good and bad purposes obscures the fact that Algorithmic news feeds and AI (Artificial Intelligence) powered networks now have a “life of their own”. Indeed, we can no longer afford to let networks take over our lives completely since not only power relations but also the very nature to do bad things on a large scale is now possible.

The Uses and Misuses of Networks

However, the power of networks is such that those with genuine desires and wishes to actualize change can indeed harness such networks to the benefit of society. The examples of the many grassroots movements and the activist networks that have used Facebook and Twitter to bring to the notice of wider audience events that are not being covered by Mainstream Media are a case in point.

In addition, politicians in recent years have been harnessing social media and the power of viral messaging to get their point across.

Of course, this has also given rise to the phenomenon of Fake News which is troubling since the viral nature of modern media means that lies when repeated and virally transmitted can cause chaos and havoc.

Further, with machine driven viral messaging, sometimes the actual meaning of the message is lost in the noise and this is where some experts argue for regulating the networks without completely eliminating them.

The point here is that in the manner similar to which the invention of the Printing Press changed the power relations in the Medieval Age, the emergence of the Internet and Smartphones have likewise revolutionized how power is wielded in the 21st Century. It is not surprising that the establishment is fighting back since its power is now threatened.

How You Can Benefit?

So, what does all this mean for individuals? To start with, all of you might be advanced users of social media and Smartphones. Thus, you would be aware of how you can broadcast and transmit your messages. However, the question as to how you can make them viral can be answered by referring to our earlier use of the term, compelling narrative.

In other words, once you have a story or a narrative that gathers eyeballs and clicks, rest assured that the power of viral marketing can indeed make you powerful. Having said that, as we have been discussing so far, there is a tendency for the existing players to fight back and hence, this is where your real power or the lack of it comes into the picture.

To elaborate, you need resources as well to backup your messages. Again, Crowdsourcing and Crowdfunding are another way in which you can make your power felt.

In addition, you can also seek the help of influencers and opinion shapers to endorse your narratives so that you build up a steady following. Lastly, you must be untiring in your efforts to broadcast and make viral your narratives.

Conclusion

In the ultimate analysis, power relations are changing in the Age of Networks and the power brokers of the future are those who harness the potential of such networks to their advantage.

In addition, they must also complement their virtual efforts by real world efforts and this is where the synergies from the virtual and physical worlds would converge. Networks also offer scale and hence, one can also reap the efficiencies from economies of scale.

To conclude, a new power shift is happening and this has implications for all of us, whether as members of society or as professionals working in corporates.

How Organizations Must Learn to Deal with Radical, Disruptive, and Disorienting Change

Dealing with Radical Change

We live in times when change is the only constant. Indeed, organizations now compete in an external market landscape where the time to market is in the months and not years, as earlier, and where each new technology or trend that emerges leads to another round and wave of disruption.

Just look at around you and you would understand how CEOs (Chief Executive Officers) are under pressure to deal with the problems of immediacy as well as creating longer term value.

For instance, take the case of Apple and Samsung which release newer and upgraded versions of the Smartphones every quarter instead of how Blackberry and Nokia used to do every year.

Put yourself in the shoes of Tim Cook of Apple and see how he is under pressure to constantly innovate and be ahead of the curve.

Further, take the example of Facebook which lost nearly 25% in market capitalization just because it failed to meet analyst expectations of higher profits.

Indeed, Facebook, which is one of the FANGs or the So-called grouping of Big Tech firms (Facebook, Amazon, Netflix, and Google), has been the darling of the investors for its ability to post profits in the higher 40% bracket for a long time that any slippage below has led to a massive dumping of its stock. Picture yourself as Mark Zuckerberg and imagine what he would be thinking when his company though making huge profits is still pilloried by the market.

The Challenges of Disruptive Change

The examples cited above indicate one form of radical change wherein nothing is permanent and what matters is your last performance.

For instance, the Indian IT (Information Technology) bellwether was for a long time considered the reliable and respected indicator of which way the winds in the Indian IT Sector were blowing.

Not anymore as it has taken a beating in recent years due to its inability to read the signals about changing market conditions and hence, lost out on its leadership pole position. This is an indication of disruptive change wherein hitherto safe and reliable firms bite the dust just because they were not ready for disruption.

When disruption can mean anything from lesser known competitors taking market share to sudden leaps and jumps in technologies, we can expect to see more of such examples.

Indeed, Infosys, under its new board and CEO has now tied the salaries and the bonuses of its top executives to their ability to bring in the business from the digital technologies. While this move is welcome, it remains to be seen as to how effective it would be.

Navigating Disorienting Change

We have covered radical and disruptive change. Now, let us take a look at disorienting change wherein organizations, big or small, long established or newbie’s, and reputed or little know find themselves in the middle of the storms brought about by extreme volatility and turbulence.

Take the example of many SOEs or State Owned Enterprises across the world and in China and India in particular.

You would see that they and their employees, long used to cushy salaries and perks at the state’s expense and who were inefficient yet kept in business due to political reasons now find themselves staring at the abyss as the Punch Bowl or the goodies are now taken away from them due to the simple reason that the state is no longer capable of sustaining them.

Indeed, as the example of the Indian Public Sector Airline, Air India, shows when fossilized organizations living in the past are exposed to disorienting change brought about due to changing market conditions, the result is that they are no longer capable or confident of surviving the storms of change.

How Change Agents Help Organizations

Thus, as the examples show, the present age is characterized by radical, disruptive, and disorienting change and this is where organizations have their task cut out in dealing with such change.

This is more the reason why Change Agents who are capable of dealing with these challenges are important as they have the necessary insight and intuition into how they can drive change and at the same time, help their employees deal with the effects of such change.

Change agents succeed because they have the necessary narrative and the vision and the ability to actualize them through a missionary sense of purpose and grounded in values. Further, change agents bring with them the necessary freshness and the ability to unclog the organizational arteries that have been ossified by inertia, lethargy, and bureaucratic modes of working.

Indeed, for organizations that are suffocating under the combined effects of the three types of change discussed here, change agents open the windows, reorder the rooms, and make the homes livable and thriving, to use a metaphor.

Thus, it is indeed the case that organizations must welcome change agents and let them shake up the organizations a bit to drive change.

Cultural Challenges

Lastly, it needs to be mentioned that in addition to the aforementioned challenges, cultural attitudes are another potential barriers to change as can be seen in the rise of nationalism, tribalism, parochialism, and patriarchy.

Thus, change agents must balance the old and the new and at the same time, do not let partisanship submerge the organizations in a heap of contradictions.

To conclude, the contradictory and intersecting aspects of the changes we are now seeing can only be handled with clear and articulate leaders who can see patterns where others see mazes and who can find a way out of the morass where others are lost.

Driving Organizational Change by Embracing Agile and Facing the VUCA World

What is Agile and what is meant by the VUCA World?

It is hard not to miss the extensive press coverage for the Agile Methodology that is taking the corporate world by storm. Indeed, this innovative, flexible, and adaptable way of doing things and ordering work has been credited by leading business leaders for its value as a methodology that can help them drive organizational change and face the VUCA world.

Before launching into the discussion, it would be pertinent to define the terms that we have just mentioned. To start with, Agile Methodology is an approach to organizational processes that encompasses flexible, autonomous teams, doing everything from start to scratch where each team member is a “Jack of All Trades” in terms of their abilities to actualize multiple skill sets and horizontal and vertical integration of the work processes.

In addition, VUCA stands for Volatility, Uncertainty, Complexity, and Ambiguity which is the term used to describe the external business landscape that is facing all corporates and startups in the present times.

Thus, by embracing Agile, we argue that organizations are better prepared to respond to the fast changing external business landscape than others who might still be using the linear and time phased methods of working.

How Embracing Agile Leads to First Mover Advantage and Shorter Time to Market Times

Of course, one might very well ask how organizations can benefit by what is seemingly a Haphazard way of working where there are no clear boundaries between team members and their roles and everything is fungible and changeable.

The answer to this question lies in the way the Agile Methodology is defined. To start with, any organization that spends a lot of time in responding to fast changing events loses out on the First Mover Advantage or for that matter, even in the Time to Market lead times that are being compressed more and more in recent years. In other words, by doing things the same way that they were being done for decades, organizations are stuck in a “Legacy Trap” that does not allow them the freedom to experiment and be nimble.

Moreover, Agile operates on the principles of Systemic Change that is holistic and driven by Strategic Imperatives.

In the same manner in which the SHRM (Strategic Human Resource Management) Theory proposes a model of human resources being the main assets and the source of strategic and competitive advantage, Agile ways of working place the teams and the business units embracing it at the center of the organizational universe and which in turn, feedback to the external environment and vice versa.

Driving Organizational Change Through Agile

Having said that, one cannot really expect organizations to embrace Agile at the “Drop of a Hat”, indeed, the key challenge before business leaders these days is to how to transition to an agile methodology without too many Legacy issues coming in the way of the change process.

Thus, what leading management experts propose is to first freeze the current ways of doing things, introduce the agile method, and then gradually transition to the new paradigm so that the net result or the output is an organization that uses the agile method.

While like with all management theories, this looks easy on paper, the reality is that it is hard to actualize in practice.

Therefore, what we recommend is that business leaders drive the change and emphasize and hammer the point that embracing Agile is primarily a mindset change more than anything else and hence, the combination of people and the methodology taking to each other would determine the success or otherwise of the proposed change.

Examples from the Real World

Turning to the point that Agile is best suited for facing the VUCA world, let us take some examples from the real world to explain our point. Both Google and Facebook are highly responsive to the fast changing external landscape and they spend a humungous amount of time in a Symbiotic exchange with their users and other external parties.

Thus, if they need to respond to any external event, feedback, or information exchange from their environments, the relevant teams in charge cannot say that they have passed on the details to the concerned team and wash their hands of the matter.

Instead, all teams and business units must be capable of receiving, processing, acting upon, and closing the informational loop on their own.

In addition, they would need to do this quickly, with incomplete information, and with the possibility of other events overtaking their response.

In other words, what this means is that as the external events change rapidly, present ambiguities, are complex, and are volatile, agile firms are the ones that can be the answer to such imperatives.

Indeed, many business thinkers are of the view that Agile represents the natural evolution in organizational change from the Systems View, the Open Organization View, to the Agile View where fluidity of the situation demands highly unusual (for earlier era personnel) responses.

Conclusion

Lastly, Agile is best suited for Startups and Entrepreneurs who wish to be the first to market their game changing innovation can very well use this methodology as it is not only easier for them to embrace without Legacy Issues, but also suits their time constrained and budget constrained issues that are common to early stage startups.

To conclude, we feel that Agile is here to stay and as more and more organizations see the positives and work around the negatives, it makes sense for management graduates, engineering graduates, and for that matter, anyone curious about business trends to delve deeper and learn more about this exciting and game changing methodology.

How Relevant is the Corporate Planning Function in the Digital Age of Agile Organizations

Corporate Planning in Earlier Decades Manufacturing Firms

In manufacturing firms in the earlier decades, one of the most sought after role was to work in the Corporate Planning Function which was staffed with the Créme De La Créme of Employees trained in Management and skilled with longer term orientation and insights into how the future would unfold for the organization in question.

Indeed, usually based in the Headquarters of the Corporates, the Planning Function was also expected to liaise with the external management consultants such as McKinsey and other reputed firms to devise strategies and tactics as well as come with Yearly and Five Yearly plans (as the case may be) which would serve as a guidebook for the rest of the organization.

Thus, the Corporate Planners were looked upon as Oracles who could help the organizations navigate the stormy waters and help the other executives see patterns where only some signals were apparent.

Are Corporate Planners Relevant in the Digital Age and in Agile Organizations?

With the advent of the Digital Age, it is worth asking the question as to how relevant the Corporate Planning Function is especially when one considers organizations which have adopted the Agile Methodology as the basis for their template organizational modes of working.

Agile is a Methodology which has become quite popular in recent years due to its model of self contained teams accomplishing everything from planning to building and testing to deployment and post release support.

Thus, when organizations use the Agile Methodology and have symbiotic teams that are flexible and adaptable to changing external and internal circumstances, it is the case that a centralized planning function would for all practical purposes be redundant.

Indeed, when the teams and the units themselves plan and act, the very purpose of a centralized planning team is defeated since each team and team member is capable of planning and adapting to fast changing market and organizational conditions.

How useful is Centralized Planning in Decentralized and Networked Organizations?

Talking about Centralized Planning, it is also worth noting that in the Digital Age where organizations are expected to be modular and self contained as well as networked and shape shifting in their organizational structures, there is really no need for a hierarchical and silo based planning functions that Lord Over the entire organization.

In other words, when centralization has given way to decentralization and when hierarchies are now replaced by networked structures, corporate planners can only be relevant and effective when they are advisory.

This might be the reason why the Indian Government disbanded the Planning Commission and transformed it to NITI Aayog which is blends the planning with advisory work and yet, it is also powerful because it has the Ear of the Who’s Who of the Policymakers.

Indeed, if not anything, the erstwhile Planning Commission was becoming irrelevant and obsolete since the Indian Polity became an entity where each state was expected to be largely autonomous and self containing and self sustaining as far as managing the financial and administrative aspects were concerned.

The same applies to the Planning Functions in the Corporates of the Digital Age where old modes of thinking and strategic decision making are giving way to newer forms of working in the Digital and Agile firms.

How Corporate Planners Can Stay Relevant in the Digital Age?

Having said that, there is also a case to be made for the relevance of the Corporate Planning Function in the present times as well. for instance, much like the Planners of the Pentagon in the United States and the various Think Tanks of the world, there still is a need for experts who can take a Bird’s Eye View of the Big Picture and come out with guidance and directional inputs that can be of immense help to those whose everyday routine constrains them from thinking for longer term timelines.

In other words, the Corporate Planners have the luxury of expertise and are equipped with the skills that are needed for strategic decision making.

Further, in times where the External Landscape is fast paced and market and societal trends change in real time, corporate planners can step back from the chaos and acceleration that is the situation confronting the Agile Teams and advise and guide them to actualize strategies which can then be implemented by such teams.

In addition, corporate planners can also remain relevant when their inputs are holistic and comprehensive in nature.

While Digital Age firms do have executives and managers who can think longer term, more often than not, they are constrained by the lack of interdisciplinary skills which means that despite being Agile, they are still in silo mode.

This is where the Generalists of the Corporate Planning Department can help with their knowledge of multiple domains combining with their unique ability to Tie Everything Together.

Thus, as can be seen from these points, Corporate Planners can be of use and be relevant even in the Digital Age if they too adapt to the changing business imperatives.

Conclusion

Lastly, when one considers the pros and cons on balance, it is clear that corporate planners now have a diminished yet important role to play.

Further, in the age of 24/7 business operations and Social Media driven noise, it is important, more than ever, to separate the Signals from the Noise and Make Sense of the Chaos and Confusion of the External World.

To conclude, while some might argue for disbanding the Corporate Planning Function, our final point is that they can be effective and relevant if their roles are redefined and their work adapts to the changed paradigm.

Paradigm Shift is Needed for Organizations to Succeed in the Digital Age

What’s New and What’s the Same in the Digital Age

The Digital Age is well and truly upon us. Everywhere we see technological acceleration and the speed and connectivity model is upending age old methods of working and is destroying reputed and long standing businesses that failed to make the necessary adjustments and transition to survive and prosper in the Digital Age.

Indeed, so far the Digital Age has meant that startups such as Uber have managed to create an entirely new model of how businesses work and in the process, engaging and driving a Creative Destruction Frenzy that has seen the likes of the traditional medallion taxis firms being rendered obsolete.

In addition, what the Digital Age has also done is to Empower Billions of Consumers into a new form of Free Market Capitalism where they have plentiful choices and the ease and convenience of transactions on their computers or Smartphones has become so pervasive that an entire layer of middlemen have been made redundant and in turn, a direct exchange between the businesses and the consumers has taken root.

How Organizations Can Embrace Digital Methodologies

Predictably, this new form of conducting business and transacting commerce has meant that organizations everywhere are scrambling to Jump on to the Digital Bandwagon lest they miss out or worse, they are left out completely.

Thus, we see media reports about how corporates are embracing Agile and Scrum methodologies and are discarding their hierarchical organizational structures for flexible and networked as well as self organizing models.

In addition, we have also seen how organizations are moving away from top down methods of working to an open systems and symbiotic models where each unit is self contained and is in a position to take feedback and act on the same and that too, in real time.

In other words, the defining terms of the Digital Age are Speed, Connectivity, Network, and Real Time modes of working and this is where some organizations are succeeding while others are being left wondering where they went wrong.

Example of the Agile Methodology and What it Takes to Follow It

It is the contention in this article that embracing Digital Transformation looks like a Catchy Slogan on paper while it is indeed a tough asks in the real world. For instance, however hard they try, organizations cannot simply discard their hierarchical structures to modular and networked ones overnight.

Moreover, they cannot simply adopt Agile without a concomitant shift in mindset of its executives, managers, and more importantly, rank and file employees.

Therefore, it is the case that to succeed in the Digital Age, organizations need more than simple embrace of methodologies and models and instead, a Paradigm Shift in Thinking and Execution should be the objective.

For instance, take the case of organizations taking to agile methodologies.

This model where each team is capable of the entire Design-Build-Test-Release-Support cycle means that what is needed for the team members is to be a Master of All Trades or in other words, a move away from traditional silos where each phase is done by a different team and instead, what is needed now is that each team is self contained and more importantly, can also seek and act on feedback from the external world in real time.

Indeed, this means that a mindset change where team members no longer shrug their Shoulders and say, this is not my specialty and instead, welcome and take on any task and all the tasks.

Apart from being multi skilled, the team members should also have a mindset of Can Do and Will Do that sets them apart from the teams of yesteryears where specialization was prized over generalization.

Challenges and Rewards in the VUCA Paradigm

Having said that, as mentioned earlier, there are many organizations that have embraced the new models of working and yet, they find it hard to succeed.

This is mainly because they have not adjusted to the VUCA Paradigm that stands for Volatility, Uncertainty, Complexity, and Ambiguity aspects of the present times.

Operating in the VUCA Paradigm means that organizations have to master the twin aspects of speed and complexity that can seem to be contradictory but are indeed essential for success in the Digital Age.

For instance, for a long time, it was thought that simple tasks can be done quickly and vice versa whereas now, this is no longer true.

Thus, organizations have to be prepared for dealing with complexity and at the same time, be ready for the Maddening Acceleration of events and trends.

In other words, Agile has to be followed in both name and principle where organizations that are nimble and flexible and yet also are deep in terms of expertise succeed.

As mentioned earlier, apart from skills and expertise, a mindset change is what is needed. This can only be actualized when a Paradigm Shift in the way organizations think and act is embraced to succeed in the Digital Age.

Creative Destruction and Survival of the Fittest

Lastly, like with each disruption and transition that capitalism and technology working in tandem bring about, a process of Creative Destruction happens wherein the Hidden Hand of the Markets weeds out those who cannot adopt and adapt and instead, a new breed of firms succeed that were ready for the challenges of such disruptions.

If organizations do not want to be left behind, the least that they could do is to learn from others, apply the new principles, embrace change, and adjust and adapt to the new rules of business.

To conclude, as the Laws of the Jungle make it clear, only the Fittest survive and this is the same for the Digital Era firms where they have to be There or Be Square.