Suffolk County Council - Case Study Example

Suffolk County Council PART A: All organizations go through various changes during their operational life consistently and regularly.[Carnd] Some organizations face changes from within, for example changes in management by either structure or personnel, while some organizations change due to external environmental factors, for example recession. However, one thing is certain change is constant. The problem outlined in this case too about a change being brought about in an organization. Suffolk County Council is in the middle of a major overhaul. Facing a £153 million deficit in the near future, the Suffolk County Council (SCC) has decided to take corrective measures to avoid the huge deficit or at least reduce it. The situation at SCC looks like a case of ‘Top Down’ decision, initiated by the CEO Andrea Hill. She along with some senior executives has taken the hard decision to cut back on the number of staff at SCC. A Top Down approach in an organization is one where one person (or more) at the top of the organizational hierarchy takes a decision and the juniors are expected to follow it.[Pri14] In comparison, a Bottom Up approach in an organization refers to the involvement of people at the grass root level to form a consensus regarding a decision. [Pri14]. On preliminary reading, it looks like the executives at SCC have made a mistake regarding the decision to cut back on staff by using a high handed approach in the matter and perhaps not fully investigated other alternatives which may be available to them. For example, if they had consulted with their staff, and presented the problem to them, and asked the staff to take a pay cut for a short period of time, maybe the issue of cutting back would not have arisen. SCC had over the years gone on a hiring spree, perhaps expecting a sharp increase in the demand for their services. However, this doesn’t seem to have happened, and now SCC is facing the dual problem of low demands and high personnel cost. A revolutionary change is being tried by the new CEO Andrea Hill, in an effort to make SCC “leaner, smaller, cheaper, more creative, and more innovative.” The relieving of staff will almost certainly ensure that SCC operates in a cheaper more cost effective way, but there is no guarantee that it will be more creative or innovative. Moreover, it is my personal opinion that creativity flourishes from stability. If a personnel has a continuous sword of being dismissed hanging over his or her head, it becomes extremely difficult for a person to take risks and be creative in their approach toward problem solving. This report takes a look at the problems facing the SCC, and attempts to discover the possible solutions to the problems through the application of relevant theories and practical guidelines. This report will briefly outline the major points in the situation at SCC, examine the memo written by the CEO Andrea Hill, and investigate the underlying problems at SCC, how they could have been avoided or can be checked in the near future. The main focus of this report is to find possible solutions to the problem at SCC, and critically examine the proposed solutions, and derive at a proper solution that may work in relation to the problems at SCC. An extreme step such as a huge layover of staff may not be the ideal solution. Hence the main purpose of this report is to provide suitable recommendations to address the problems at SCC, and provide guidelines for a suitable implementation of the suggested solutions. Part B: BACKGROUND 1. Problems at SCC: The main problem identified at SCC is financial in nature. To correct this problem, the new CEO Andrea Hill has taken a bold step to relieve some of the staff at SCC in an effort to reduce costs. Hence, giving rise to an Organizational problem. As mentioned earlier, changes from within happen at all organizations, especially during difficult times. However, such changes cannot happen overnight, without proper investigation of other alternatives that may be available and, which may have a better result than the proposed changes. According to Kotter, a single person or an individual is incapable of bringing changes alone in an organization and monitor the process of change successfully. [App12]. He adds that a ‘guiding coalition’ [App12] is essential, which is formed with the people in the right position, and are key players who can successfully implement the change process. At SCC, no such initiative seems to have taken place. The decision seems to have come from the top, suggesting a Top Down approach toward organizational change (discussed earlier). According to Kotter, a Successful and influential Guiding Coalition members must have the relevant expertise, so that the important issues can come out in the open and be properly represented so that proper and right decisions can be made.[App12]. Moreover, the group should have credible members in it, members who are respected by the firm, which includes the management as well as workers, so that the decisions made by the coalition is adhered to by both the management as well as the workers. [App12]. Kotter also adds that the leaders in the coalition should have a proven record of leadership success so that they can successfully implement the change process because implementation of the solutions may be the key to a successful strategy. [App12]. A top down approach often seems attractive in an organization as it seems to give almost instant results and provides quick changes in organization. It is a ploy that can make the managers easily guide their employees in their chosen direction. However, the changes brought about in this manner may not always have the support of the employees. [Ans94]. The new goals of the organization may not be appealing to an employee to provide his or her best work.[Ans94]. Moreover, this approach ignores the rather large knowledge and information pool of the employees in the understanding of the day to day activities of the organization, and how, if included the employees could have added value to the changes being brought about in the organization. [Ans94]. In comparison, a bottom-up approach which is an approach that includes employee participation seems to correct the major shortcomings of a top down approach. [Ans94]However, this approach is perfect either.[Ans94]. This approach can be too slow, as it looks to gather consensus and build on it. It may also fail in a situation where the situation demands a dynamic change in the organization, and the top executives may not completely understand the demands in the changes brought about by the inclusion of the employees in the decision making process. [Ans94]. In this situation, the decision has come from the top, although invitations were sent out to about 175 employees to work on the change. The decision had been taken already; the employees were called into action only to provide inputs to effect the change. It seems unlikely in this scenario that the employees invited were part of a guidance coalition or called in to debate the change. They were merely asked to come in and discuss ways to implement this change. The SCC had employed more than 1400 staff over the past five years. There does not seem to be any performance appraisal system on board. Hence, the decision of who to give the pink slip and which employee retains his or her job might be a result of a lottery. It seems that the top management has already made all the major decisions and there is little scope of any deliberations left on the subject. The main question to be asked in this scenario is that considering the fact that even with the dismissal of 400 staff, the SCC saves approximately 55 million. Considering the deficit it faces, it is about one-third of the costs saved. Are there better solutions in sight? The next section of the report will attempt to highlight possible alternatives to the steps taken by the current management at SCC. 2. Alternate Solutions to the steps taken by the Management at SCC: The first step toward an alternate solution would be dramatic in nature. It would call for an immediate revocation of the decision taken by the top management to lay off the employees at SCC. The new solution would come into two parts. The first part calls for the formation of a guidance coalition, to be made up of influential personnel respected and adhered to by both the employees and the management. The coalition should ideally contain 15 to 20 members, with a mix of experience and youth. The second part of the solution would call for an integrated approach of bottom up and top down change. This would mean that certain objectives and goals should be outlined by the Top Management, which the Coalition Guidance must work on, and communicate to the rest of the employees and the suggestions made by the coalition must be implemented. The coalition should decide the number of employees to be sacked, and the process of deciding this act. Members of the top management can be part of the coalition as well, depending on the level of clout or influence they command over the employees. Ideally, one or two members from the top management should be part of the coalition. The Coalition should adopt relevant interventions in line with the laid objectives of the top management. This would include Sensitive Training, Team Building, Process Consultation and Role Analysis. [Pat10] Sensitive Training involves changing an employee’s behaviour by informal interactions in a group setting. It helps in building interpersonal relationships in an organization and reduces friction among employees. [Pat10]. At SCC, a sensitive training exercise divided into various groups of 10 to 12 people and in the supervision of a ‘professional behavioural scientist who acts as a catalyst and trainer for the group’[Pat10] can be beneficial for the employees to come out and express their ideas in the open. As the trainer would be an external member of the group, not part of the organization, the groups would essentially be working on its own, with assistance from the trainer and feel comfortable in sharing experiences or ideas freely. [Pat10]. As one of the problems mentioned by the CEO in her memo is lack of performance by the employees, this method can go a long way in discussing employee behaviour in an informal setting and suggest corrective measures to ensure positive outcomes. Another suggested measure as part of the Intervention is encouraging ‘Team Building’. Various studies have shown that encouraging good team building often ends up in uniting the employees towards the organizations required objectives, which results in enhance productivity and innovation. [UCSnd]. In the case of SCC, this can help immensely by encouraging employees to work in a team rather than as individuals, and evolve as a cohesive unit. With enhanced productivity, it is expected that overall costs will come down, and hence, the issue of layoffs will not be that many as expected. Process Consultation is a part of Organizational Development where the changes are brought about within the organization. [CCPnd]. The approach calls for employees to question what they are doing and why, what they are good at and things they can improve on. This ends up in increasing employee confidence and creativity and the end result is more efficiency and greater productivity. It promotes collaboration and mutual respect amongst employees as well. [CCPnd]. All employees need to be given specific roles in an organization, and their objectives and expectations outlined. [Avi11]. The Role Analysis Technique is designed to achieve that purpose. With their roles assigned, employees can concentrate on their core competencies and become better and more creative workers. [Avi11]. At SCC there seems to be a case of assigning roles to individuals and improving team building, along with identification of a proper process channel and providing Sensitive Training to employees. I recommend that applying these changes would bring about a positive change in productivity and creativity which are the primary reasons for the CEO to cut back on jobs. Hence, the layoffs need not be as extreme as suspected. More personnel can keep their jobs and costs will come down automatically. Moreover, with a greater number of staff at their disposal, SCC will have access to a larger pool of human resources. These outlined solutions may not be perfect. Some of the limitations of the proposed recommendations are discussed in the next part. 3. Limitations of Proposed Recommendations: The first part of the recommendation calls for an immediate revocation of the decision to lay off staff. CEOs are at the top of the hierarchal pyramid in an organization. They are viewed as leaders. Any rollback on the decision made by the CEO may compromise an organizations core values and result in the CEO being perceived as a weak leader. [Mic11]. However, in this case it is better for a change in the decision than living with a wrong one. Secondly, the approach of bottom up change may not always be successful, and is always time consuming. If the objective calls for a quick change, as in the case of SCC, it might not be the most fruitful course of action to be undertaken. However, in this case it seems to be more beneficial to take some time out and re-evaluate the decision. Also, the formation of a coalition will be highly dependent on the employees. The question of who will form a part of the Guidance Coalition will become a matter of opinion. There will be many candidates for this role, some with biased and personal agendas, which may not be fruitful to the overall scheme of things. Hence, it is required that the coalition formed be by democracy. That is, a few employees are nominated for the role of membership to the coalition and the rest of the employees collectively decide which of these people will form the coalition. Most of these measures discussed in the previous part are time consuming and maybe not ideal. However, at the present juncture seem to be the best available option. The solutions recommended may prove to be ineffective if not properly implemented. The next part examines how these recommendations can be properly implemented within a given time frame and what the possible outcomes may be after a successful implementation. 4. Implementation of the Proposed Recommendations: For the successful implementation of the proposed recommendations, I believe we should consider “Stage Theory of Organizational Change” [Ste02]. The Stage Theory of Organizational Change suggests that it is important for any organization to recognize the different stages of implementing a stage. [Ste02]. The four stages are: 1. Raising Awareness.[Ste02] In this case employees at SCC should be first made aware of the problem at hand. The problems identified are: a huge deficit facing the SCC by 2015 and in an attempt to correct the deficit the top management has decided to lay off staff. The second stage is adopting the strategies recommended. [Ste02]. The employees at SCC should ratify the recommendations and agree to adhere to it. The recommendations were to stop the decision to lay off staff and form a consensus amongst the employees through a coalition and promoting a mix of bottom up and top down approach. If these recommendations are not acceptable to the employees, these cannot be successfully implemented. All doubts and queries in this matter must be properly addressed to make sure that the employees understand the need for change and work towards the common goals of the organization and individual employees. The next stage is the actual implantation. [Ste02] Implementation of the recommendations needs to be flexible in nature and account for deviations in employee requirements as well as aligning them with the overall objective of the organization. This is perhaps the most difficult part. Proper organization structural changes need to part of the implementation policy. For example, forming of the coalition should be done in coherence with the employees and the top management should not simply pick out a few employees and make them part of the coalition. This would lead in a lack of trust between the employees and the top management. The fourth and last stage of Organizational Change is institutionalization. [Ste02]. Institutionalization is a process whereby the implemented changes are adopted into the day to day working culture of an organization. The employees at SCC must fully embrace the changes to the way work is carried out, and conform to the overall objectives of the SCC. This would mean delivering higher productivity in an effective and efficient manner and adding to the values of the organization. SUMMARY: In the above report we have discovered the problems the SCC is facing, which are high costs, and in an endeavour to lower the costs the CEO has suggested a cutback in jobs. We have found that this is not the ideal solution to the problem being faced by SCC. We have suggested alternate solutions which include a mix of top down and bottom approach, formation of a Guidance Coalition to correct problems in employee productivity. However, all these solutions are not perfect, but seem to be the best alternative available. In order to successfully implement the recommendations, we have suggested the Stage Theory of Organizational Change will look at identifying the problem, adopting corrective measures, implementing the corrective measures and institutionalizing the measures into the day to day management of the organization. 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