Organizational Change Management - Suffolk County Council - Case Study Example

Organizational Change Management Table of Contents Contents Part A Introduction Part B 3 Problem Identification 3 Proposed Solution 5 Conclusion 8 Recommendations 9 Part A Introduction Suffolk County Council is known as a governmental authority, situated in Suffolk, England. It is operated by 75 elected county councillors on behalf of 63 divisions and is a member of the East of England Local Government Association. The Council is heading financial crisis as identified by the CEO, Andrea Hill. The CEO has also developed a policy entitled, “A New Strategic Direction”, and is convinced that the direction set in the policy is right. The new strategic direction involves challenging the expenditure and reducing costs. The Council expects to start the 2013 budget with a shortfall of £153 million. While job cuts is planned, this would not be sufficient to fill the gap. To prevent the gap the CEO suggets reducing demand on the Council’s services which entails making the communities self-sufficient thereby reducing the burden on the Council. However, this suggestsion has met with resistance by the opposition at the Council. The issues facing the Council include financial crisis and a slow and cumbersome service delivery process. While reducing headcount is one of the solutions, it does not fully meet the budget gap. The underlying problem in the case of SSC lies in effective leadership. CEO Hill was appointed because of her skills in coming up with radical solutions to serious problems facing the county. The CEO has been able to identify that the Council is too slow, too complex, over elaborate, risk adverse, designed more for the regulator than the customer, and too expensive. Creativity, innovation and commercial skills can help cope with the change businesss environment. Current assuptions need rethinking as no changes have been initiated at the Council since its inception even though the external environment has undergone change. Therefore change is the most critical issue at hand. To cope up with the challenges and to bring about change, the under-performers can be laid off but resistance is already evident at the Council. This could hamper growth and development but resistance to change can be used as strengths of change (Ford, Ford & D’Amelio, 2008). Fear is the principle cause of resistance and people are hesitant to change the established patterns. Unfamiliarity with new patterns cause resistance. This requires an effective change agent (the right leadership) to manage change. Change management leadership comes naturally to people who are passionate about change (Woodward, 2007). CEO Hill has demonstrated this passion with a compelling vision and a pro-active approach to change. Priorities for change have been identified – reducing demand for service, reducing waste and delivering service excellence. However, the company has not been able to address the natural resistance to change which suggests lack of shared vision among the employees and hence ineffective leadership at the top (Kotter, 1995). This report therefore, proposes to address how change should be implemented at SSC. The changes that are clearly required include reducing waste, focusing on high-performance employees and overcoming employee resistance. This report is divided into three sections. In the first section the problem is identified and how possibly SSC could address the much needed change. In the next section specific change management practices have been highlighted that could be implemented at SSC. The section evaluates the time frame needed for implementing such change. The third section provides a balanced conclusion to the proposals for change including highlighting the limitations, if any. The fourth section comprises of the recommendations on how the actual change will be implemented. In this section recommendation of processes and leadership programs have been incorporated. Part B Problem Identification Change at SSC is essential in several functions and areas. For instance, employee involvement is essential in decision making as currently it appears to be top-down approach since the CEO simply conveys the strategic direction to be adopted. This has resulted in resistance from opposition although the CEO claims that all the 172 managers agree to her proposal for change. The change agents contribute to resistance by their own actions and inactions (Ford, Ford & D’Amelio, 2008). The Council has plans for change but the urgency for change has not been recognzied by the management. There is an urgency to transform the Council to a much leaner, innovative, smaller and cheaper organization to sustain in the current business environment. The more this situation continues to stand, the more difficult it will become to change (Huber, 1995). Change is imperative because an organization has to adapt to the external environment in which it operates. Change is creative destruction and essential for progress (Abrahmson, 2004). Change brings with it proposals that threaten managerial power; it may also involve reallocation of resources and restructuring of relationships (Cunningham & Harney, 2012). This explains why change initiatives are generally met with resistance. The change agent or the leadership must accept responsibility for the relationship with the employees as well as of the tactics of change management (Ford, Ford & D’Amelio, 2008). The leader has to take charge of the change dialogues, conduct inquiry and get to the root of the apparently resistive behaviours. Change agents may fail to involve certain people that are essential for change (Kee & Newcomer, 2008). The conversations between the change agent and the employees, when brought to the fore, help in diagonizing the problem areas and the distortion of information flow. The discussions may be negative and full of complaints but it helps keep the subject of change alive. This in turn would help in engaging in actions necessary to develop and maintain relationship with the employees. This is how resistance to change can be converted to strength. Efforts should be made to engage all employees and make them contributors to change. DICE factors are essential for change which include duration (the time between project reviews), performance integrity (capability of the change management team), commitment of the staff and the executives (as these two are the most affected by change), and additional effort that employees need to make to cope with change (Sirkin, Keenan & Jackson, 2005). However, this may be difficult because organizations are made up of powerful coalitions or interest groups that impose their ways of working and of viewing the world (Cunnigham & Harney, 2012). In such groups political manuoeuvring and power plays are at work. Since change can threaten individual power and position, a guiding coalition should be formed which should include the change agent and five to 50 others of the most influential people that develop a shared commitment to change (Kotter, 1995). This group should have enough power to lead the change effort (Gill, 2003). The guiding coalition should include members that are not part of the senior management because if the hierarchy was working well, transformation would not have been necessary. A high sense of urgency helps in putting a guiding coalition together. Establishing a sene of urgency is a prerequisite to change (Kotter, 1995) although caution has to be exercised as urgency can also lead to chaos due to initiative overload (Abrahamson, 2004). However, urgency motivates prompt action and change initiatives should be undertaken with more than just a handful of people. “Change, by definition, requires creating a new system, which in turn always demands Leadership” (Kotter, 1995). There is a difference in managing change and leading change (Gill, 2003). The vision and the strategy have to be effectively communicated which requires the leadership to connect messages with the needs, interest and feelings of those whose commimtment to change is essential. Empowerment of employees can stimulate people’s intellect and imagination and this adds creativity in the change process, in risk taking and trust (Gill, 2003). Empowerment also helps get rid of obstacles to change which becomes easy as empowerment entails involving employees in the change process. In the next section, specific change management practices that should be adopted by the Council have been proposes. Proposed Solution At SSC it appears there is top-down approach which has created a lot of resistance. However, commitment to change improves if those affected are allowed to participate in planning and implementing change. People should be encouraged to ‘own’ the change. Employees may be either saboteurs, fence sitters or committed. The saboteurs should be eliminated for smooth functioning of the change process. Productivity can be raised by changing work patterns (Senior & Swailes, 2010). However, the change process is not easy and the executives may underestimate how difficult it is to drive people out of their comfort zones (Kotter, 1995). The Council should adopt the soft approach of Theory O which is a bottom-up approach in which change takes place through the development of organizational culture and human capability. The focus is on the soft sides of the organization (Beer & Nohria, 2000). This is known as Organizational Development (OD) and involves activities such as employee involvement, training and leadership development and team building. OD focuses on people at all levels and encourages collaboration, participation and involvement. To manage change effectively, the three-staged model of change developed by Lewin involving unfreezing, movement and refreezing should be implemented. Unfreezing is the preparatory stage where the existing employees would have to unlearn the traditional method of work (Orlikowski & Hofman, 1997). Change can then be effectively applied after which stability has to be brought in. This model requires creating urgency for change, communicating the vision, leading change and measuring the process of change (Mento, Jones & Dirndorfer, 2002). The Council may have to redesign the organizational structure to fit change. In every association there are various procedures that are not beneficial to the association’s business objectives. These wasteful method requirements are to be wiped out from the associations as they have extensive expenses. As an exhortation, the association can utilize the 20/80 guideline. By identifying its twenty most utilized demands it will then have about eighty percent of the procedures. Assuming that the association assesses these procedures, it will have the ability to kill the non proficient methodologies. Listening is a great leadership trait and listening, recognizing and responding to concerns can reduce resistance because communication is effective. The leader should be able to show how new approaches, behaviour and attitudes can lead to improved performance. The new decisions should be in line with the vision. This vision should be communicated and shared which enhances commitment to change. The change process has to be initiated immediately which means the first task is to form a guiding coalition. This should be done within one week from the time the change process starts. Members from different departments and functions should be included in the guiding coalition which would help obtain different perspectives. The CEO must get them together and instil a sense of urgency and help them develop a shared assessment of the Council’s problems and opportunities, thereby building trust among the members of the coalition. This task can be accomplished at an off-site retreat for two or three days. The need for change has to be communicated and the reasons for resistance have to be identified. Both of these objectives can be achieved once a large guiding coalition is formed. Once the change management team has been designated and the change process finalized, training may have to be provided to team members depending upon individual capabilities. The need for training has to be informed to all concerned because people should be explained why they need to understand something (Kegan & Lahey, 1997). This would encourage them to give their best and not hold back. Instead of fearing redundancy, they should be encouraged to enhance performance. Real transformation takes time and hence short-term goals should be planned and met without which the risk of losing momentum of change is high (Kotter, 1995). People would feel encouraged to carry on the journey of transformation if they are able to see improvements within six to eight months. If short-term gains are not visible they may tend to join the group of saboteurs or those that resisted change in the beginning. In the case of the Council short-term wins could be in the form of process improvements which enhances service delivery. In reduced time employees would be able to deliver faster through a planned process. Above all, steps should not be skipped just to expedite the change process because speed can result in devastating errors (Kotter, 1995). This appears to be a practical approach, because people should be allowed time to absorb the changes before they are ready to move ahead. Based on the above solutions, in the next section reflection of the change process and its limitations have been outlined. Conclusion The solutions for change have been made but limitations have to be accounted for. The CEO may not be willing to involve a large number of people or forming a guiding coalition. Creating a sense of urgency is a prerequisite but at the same time initiative overload should be avoided as this can deter people from participation in change. Even though a sense of urgency should be created, adjustment to change takes time and this point has to be borne in mind by the management. Individuals differ in the pace at which they accept change and this difference should be accepted. Again, it is not known to what extent the existing employees have the capability to function effectively as members of the coalition. Employee resistance is high which is due to lack of shared vision and ineffective communication. Thus, if the compelling vision is first shared then it may be easier to discuss the cause, the necessity and the expected outcome of change. Change should be an ongoing process otherwise the same situation may arise in years to come. Change might not equal progress. However, mistaking change for advancement is like the regular issue of confused movement for profit. Each association might be enhanced, regardless of how well it is performing, yet a chief ought to dependably pose the question, "How is this proposed change going to enhance my associations capability to accomplish our key objectives?" Cost to benefit ratio has to be taken into account because change is never free. Change has chance expenses and elusive expenses such as assurance and client fulfillment throughout the conformity period, which have not been considered in the change management process. It is also likely that management has not been able to identify the crux of the problem which would result in a wrong solution. The stakeholders’ interest has not been examined and perhaps this could alter the outcome of the change process. However, based on the possible solutions, recommendations that SSC can adopt are being made in the next section. Recommendations Change has to be ongoing and sustainable and hence certain leadership development programmes are recommended which can lead to more effective leadership of change. Based on the findings that the CEO considers a large portion of employees as under-performers, SSC should consider employee assistance programmes (EAPs) that would help identify the ‘troubled employees’ and motivate them to resolve their troubles through counselling (Hartwell & Potter, 1996). This should be carried out through external contractors and not through internal employees to avoid biases from influencing the selection of employees for EAP. Moreover, external consultants would be able to provide expertise and specialist knowledge in restructuring change. Organizational development should take place through focus on the softer issues such as employee development and training. The management at SSC should have a good understanding of the psychological contract between employer/employee. This leads to mutual trust. The Balanced Scorecard (BS) is another concept that SSC can implement to measure and improve the internal processes (Kaplan & Norton, 1996). The BS provides a balanced perspective of current operating performance on four perspectives but SSC can focus only on internal process, which is the area that requires most attention. The critical internal processes have to be identified in which the organization must excel. The internal businesses processes enable the Council to deliver on the value propositions of the customers in their region and also achieve the financial objectives. In the traditional approach the internal processes can merely be monitored and improved upon whereas through the BS approach entirely new processes can be identified. New innovative internal processes can be incorporated. Specific objectives and measures for internal business processes include short-cycle times in operating processes and high-quality internal processes. This can be done through training and improvement of the skills of their employees. The employees that need to undergo training and development can be identified through the EAP. References Abrahamson, E. 2004. Avoiding Repetitive Change Syndrome. MIT Sloan Management Review. Winter 2004 Cunningham, A. and Harney, B. 201). Strategic change - Adapting while retaining focus. Chapter II, Strategic Change Ford, J.F., Ford, L.W. and D’Ameliao, A. 2008. RESISTANCE TO CHANGE: THE REST OF THE STORY. Academy of Management Review, 33 (2), 362-377 Gill, R. (2003). Change management - or change leadership? Journal of Change Management, 3 (4), 307-318 Hartwell, T.D. and Potter, F.J. 1996. Aiding Troubled Employees: The Prevalence, Cost, and Characteristics of Employee Assistance Programs in the United States. American Journal of Public Health, 86 (6), 804-808 Huber, P.G. 1995. Organisational Change and Redesign: Ideas and Insights for Improving Performance, Issue 1995. Oxford University Press. Kaplan, R. and Norton, D.P. 1996. Linking the Balanced Scorecard to Strategy. California Management Review, 39 (1), Fall 1996 Kee, J.E. and Newcomer, K.E. 2008. Why do Change Efforts Fail? What can Leaders do about it? The Public Manager, Fall 2008 Kegan, R. and Lahey, L.L. 1997. The Real Reason People Won’t Change. Harvard Business Review, November 2001 Kotter, J.P. 1995. Leading Change: Why Transformation Efforts Fail. Harvard Business Review, March-April 1995 Mento, A.J., Jones, R.M. and Dirndorfer, W. 2002. A change management process: Grounded in both theory and practice. Journal of Change Management, 3 (1), 45-59 Orlikowski, W.J. and Hofman, J.D. 1997. An Improvisational Model for Change Management: The Case of Groupware Technologies. SLOAN MANAGKMENT RIVIEW/WINTER 1997 Senior, B. and Swailes, S. 2010. Organizational Change. 4th edn. Ft prentice Hall, Pearson ed. Sirkin, H.L., Keenan, P., and Jackson A. 2005. The Hard Side of Change Management. Harvard Business Review, October 2005 Woodward, N.H. 2007. To make changes, manage them, HR Magazine, May 2007 Read More