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Part Three:
The People Factor in Managing Change
Just past the middle of the 20th century my brother went to work for one of the largest American corporations.  After a few years the courts decided that it was “too large” and broke it into a number of separate corporations.  My brother found himself working for one of these new corporations.  A few years later when he was in his early fifties he was fired as the corporation under went one of its periodic restructurings.  However, he was encouraged to apply for another job with them in a different city.  His application was successful and he found himself commuting on a weekly basis to a new job.  Fortunately, after a year or so a job became available in his home city and he successfully applied for it.  This past year he took early retirement—something he did as soon as he was eligible since they were about to change the pension and medical benefits system for future retirees.  This is a common story, which is repeated time and time again in today’s work place.

What happens to the people caught up in the change process of their organisation?  How do they deal with the three factors shaping change management mentioned in the first of these articles?

Let’s look at each of these factors in turn and begin with the question of the human response to change.  The age-old human response to change is something that affects everyone to a greater or lesser degree.  The experience of things passing away and new things coming into being is a common human experience and yet we all have profound reactions to it.  It raises the issues of the meaning of our life and work and the question of our place in history—our eternality.  When things pass away, i.e. change, our response is to enter into a time of regretting their passing away—grieving, which takes us on a profound and often troublesome journey.  One of the more powerful change management courses being offered in the UK is derived from psychologist’s work with grief therapy.  The intention of this course is not to do away with the grieving process but to sustain people going through it by shortening it and make them more aware of what they are experiencing.  It has been demonstrated that with the help of this course people are more likely to reengage in their work at full productivity and commitment much more quickly.  This is why corporations are willing to pay for their staff to attend—it has proven beneficial to more quickly focus them back onto their work.

As this training course wisely demonstrates you can not do away with our response to change.  However, you can sustain and enable people going through it.  You can not remove the pain and suffering of the experience or somehow make it possible for someone to avoid these dimensions of the experience.  In other words, people caught up in these situations are going to have to go through it.  The question is how are they going to go through it—badly or with some courage and confidence?  Is the “grieving” going to be prolonged or are they more quickly going to be able to refocus their lives on the future and their engagement in creating that future?  The psychological and often physical impact of change on people’s lives needs to be acknowledged and ways to sustain and enable people must be incorporated into the change process.

The second dimension concerns the environment where change is taking place or more exactly the nature of change itself.  We do not need to rehearse the speed and inclusiveness of change as we are experiencing it today.  There is no escape and this constant bombardment of “newness” generates unprecedented levels of uncertainty and ambiguity, which will often leave people and entire groups “frozen” in inaction.  When we see no way forward or have no clear picture of either the future we want to create or even of the consequences of our actions we all tend to dig in where we are, keep our head down and hope for the best.  To quote St. Paul, writing to his colleagues about two thousand years ago, “O yea of little faith, what made you lose your nerve like that?”  For this is the experience of the lose of confidence and faith in the institution where we are acting out our responsibilities.  When this profound lack of trust develops in an organisation, it quickly comes to include a lack of confidence in our colleagues and particularly in the leadership.

While it has become a cliché, the more transparent the operations of an organisation are to its staff the more difficult it will be for this kind of collapse of confidence to happen.  If people do not know, they can not understand and what they do not know and understand they will not trust.  In an article in The Financial Times the following was quoted, “effective sharing of knowledge depends critically on a sense of shared destiny, which in turn both depends on and engenders a sense of mutual trust.”*  And as the article goes on to point out, this requires an approach to management that encourages openness and accountability and that team-building skills are at least as important as brilliant strategic insight.  The more people know and understand, the more they have participated in the planning and decisions, the more they have been consulted the more likely they are to retain confidence in the organisation in times of great ambiguity.

In the third dimension we are concerned with the way in which our organisations have become less and less attuned to the changing environment in which they exist.  Thus, people find themselves experiencing a disjuncture between the organisation’s life and the larger world.  This gap takes place in several different areas of people’s experience.

  • The classical hierarchical pyramid structure with its rigid systems and division of responsibility finds itself unable to respond to the fast changing world with any degree of flexibility or timeliness.  The systems, created for another time, simply engender deep frustration in staff members  anxious to do their job.

  • Also, the command and control approach to management, which accompanies this type of structure, is incapable of doing the job.  There is simply too much to command and control and more and more the primary source of success for a company is its human capital.  In the same Financial Times article as mentioned above, Geoffrey Owen writes, “If the internal organisation of large companies is changing, so too is the style of management.  The hierarchical, command and control approach is giving way to a greater emphasis on teamwork…In many (though not all) companies competitive success has come to depend less on ownership of physical assets than on the ability to develop and manage human capital.”**

  • The third and most powerful area where people experience this gap has to do with the values people bring to their organisational life.  Organisations are not “valueless” entities.  They embody the values and attitudes of the culture and time in which they were created.  Today the classic organisation tends to embody the values of a culture that no longer exists and which many people (especially the young) find obsolete and almost foreign.  It is this gap that leads many people to look elsewhere for employment or to become self-employed when they can.  Again Geoffrey Owen points to one instance of this challenge when speaking of the recent corporate scandals, “But it would not be surprising if advocates of corporate social responsibility—a concept that so far has evolved rather separately from corporate governance used the opportunity to press their agenda on companies and governments.  This could involve a shift from self-regulation to statutory rules on such issues as “sustainable development”, and perhaps some government backing for “triple bottom line” reporting of companies’ environmental and social impact as well as financial performance.”**  This disconnect between people’s life values and those they experience organisations embodying means that people will seek out those organisations more aligned with their values and attitudes.

Today organisations must examine both their structural and cultural basis.  They must be willing to begin the process of transformation.  Everything—from the structures of decision-making to the attitudes and values that govern their human resource development policies—must be examined and transformed.  Rather than second-guessing what their people are looking for, they must be willing to deeply involve their people in a collaborative process.  This kind of depth participation in the process of organisational transformation is the key to a sense of shared destiny and mutual trust.  And, of course, the more aligned the organisation’s values are with those of its people, the greater will be the sense of responsibility for, commitment to and engagement with the life and work of the organisation. 

Just as our fast changing world means new opportunities for organisations it also means new opportunities for people.  If an organisation is not change managing in a creative and responsible manner the first people “abandoning ship” will be those whose creativity and capacity for innovation make them precisely the ones the organisation most needs to keep.  Today, change management is the managerial task—and while embodying the appropriate leadership style and enabling organisational transformation are crucial they must be closely connected with the task of enabling, sustaining and developing people, who on a day to day basis, make an organisation alive and dynamic.

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  1. *Paul Adler, “Market, Hierarchy and trust: the Knowledge Economy and the Future of Capitalism,” Organisation Science, March-April 2001. (Quoted in The Financial Times article below.)
  2. **Geoffrey Owen, “Time to Promote Trust, inside the company and out,” The Financial Times, 30/08/02.
  3. Hock Dee, Birth of the Chaordic Age, Berrett-Koehler Publishers, Inc., San Francisco, 1999.
 

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