Today’s organization
The change process is at all times evolving in Eterra, that makes it hard to explain exactly how it was and where we are going. Looking at the culture and the company how it was before we are talking about how it was a year ago.
Eterra had a very different leadership structure comparing them to more traditional consultant companies. The whole company was mainly driven by one man’s philosophy, who believed that a HR department and Marketing department was a big waist of resources. The company has much functioned by principle of chaos leadership.
In chaos leadership, the principle is that all your workers are loyal, but looking for individuality and freedom. They rely on self-direction and self-control. The company has been project oriented and the employees have only been asked to deliver their results. The rapid expansion within Eterra and because of acquisition of smaller companies the company goal has never been well presented or communicated throughout to the employees. It was mainly up to the department manager or team leader what routines and procedures they followed and if a project or something else was documented or not.
The theory has many similarities to the more classic team management form the leadership grid, where the employee has the responsibility to solve the task at hand given clear tasks and responsibilities. The difference is that in chaos the responsibilities does not have to be so clear the organization are always ready for the unexpected because much of the work is to make all employees ready for the unexpected, small phenomenon can have critical effect. It has been very much up to the employee to get the job done. Most leaders cannot tackle this and therefore not many companies have been successful, working that way.
This leadership model is good for constant change and the ability to meet the unforeseen, but is not predictable.
The believe was that when a company was bought it had a unique quality and therefore should not be changed.
Eterra is now a large company and has been working without any procedures or routines for the employees this limits the chance of getting synergies.
The main wake up call for Eterra was when one of the larger customers asked about routines and procedures and how they where documented. That customer was very satisfied with the work, but to gain ISO certification they where looking at working habits with there suppliers. Since Eterra could not show them any properly documented routines nor procedures it was then decided that, there was time to post a few documents on the intranet. With the recent arrival of the new CEO, there where already some changes planned, but this increased the pressure on the management to speed-up changes to meet the demand from that customer.
The Leadership Grid (Chapter 11-5, Organization Development and change)
New CEO New leadership model
We can say that the new CEO wants the company to go into a freeze stage changing to a more stable organization. Changing to a more traditional ways of leading the company in the future. The budgets and results are now the driving force versus the previous growth driver. Everything is changing to rules and regulations. It looks like we are aiming for something between team management and Authority-Compliance (called goal driven leadership), more to authority-compliance.
From a company with no universal rolls we are moving against bureaucracy. This is a long process, as it will involve the change of employee behavior.
In this essay, we are not looking at the whole change but at focusing on the introduction of written routines and procedures recently introduced for everything.
The employees
A great adverting changing culture in Eterra is that the organization is used to changes. All the employees have worked in a dynamic culture, not used to anything staying the way they are for long. With the knowledge that things are not going to good in the computer marked, motivating the workers for the change.
At the same time when it comes to how to work there have never been any regulations, and changing peoples behavior is one of the more difficult things to do. It is in now way different in theory then to change a company culture or change the organization but to get people to stay “changed” after the focus is gone you must have reached the stage where this is the natural thing to do.
Looking at theory we have to make the employee aware of what he is doing is not right, thereby motivating for change, then train in a new behavior, keep the focus on this until the new behavior feels natural then freeze the change.
One problem for Eterra is that many consultants are mostly out in the field and it is hard to get to know what the routines are without reading a lot of information, something that for my one part has a low priority.
Methods of changing a company culture
Looking at different theory on how to change a company culture, you have two main points that are stressed in many ways.
DEFREEZE – CHANGE – FREEZE by Kurt Lewin
The different theories are manifesting this in different ways but this is the simplest way to describe the way most of the theories are built, using this as a foundation with some more steps.
Defreeze
Stage one in a change process is then to defreeze which is to destabilize. This is the stage where the employee starts to see the need for change, and the most unstable place to leave the change process. Some change processes have been left in this stage after a manager or someone has made the employees unsatisfied with their work, pay, place to stay, what ever was the goal to change. When you have the employees ready, it is time fore the next step.
Change
Change or Move as some theories calls it. In this stage, the desired change is preformed. This can be all kinds of changes. Information on what is happening how far the change process has come and what to expect next is essential. Have good routines on following the change process and make sure that everyone in the company is following the process.
Behavioral changes are the most difficult change because it involves a greater need for personal involvement. The person should bee highly motivated. The change process will also take more time as it has to go from some thing the person does to some thing that is natural for the person before you can go to the next face.
Freeze
In this stage management will try to normalize the company. Stop the change process and get everything changed to be a natural part of the company.
One other asset most theories are focusing around is getting the employees involved and motivated. There are many ways to do this but most of them are using involvement to motivate. Making the employee feel he has some influence.
One way to motivate is by delegating the responsibility to the employees, reference people management knows employees look to, or to reference groups.
The two main ways to start a controlled change process is to start change processes from the bottom up or from the top down. When starting a change process from the top you will in many cases lose the effect of motivating the employees if this is not consider and made part of the plan.
There are different methods for getting the employees involved:
- Making a coalition supporting the change
- Place competent change oriented people in key positions.
- Let the employee’s be responsible for the change.
One other factor worth considering in this case is how much do we know and how much of the organization is hidden from us. The theory is asking us to look at the culture you believe the organization is living by and compare it to the way the organization really works.
As we can see this is not an easy company to map the culture. What is the formal and what is the informal company like?
What are the influences making changes? Is Eterra influenced by the technology changes or is it more the changes in economy that are influencing Eterra. If you had asked this question 3 years ago, I am in no doubt that you would have expected the answer that this where a technology driven concern. Asking to day, we have to start speculating to what degree, are an economical driven concern?
We do not have all the answers as the time span for such a investigation would need to bee much longer then in this essay but we are in the believe that there are a lot of unanswered or uninvestigated territory for the management as well.
Method chosen by Eterra
Eterra has chosen to have a top down change where the management has worked with the mid management to make routings and procedure documents to use when doing there work. The routines are from very simple things as what paper to use when filling out an expense report, what expenses are covered and how to fill it out the report in the correct way. What to be done when giving an offer on a new assignment to customers. What is the responsibility of the employee? When employing some one new we have not had any routings telling the new person what to do, now we have many routines and in the future, we can get to the stage where we know what they are?
Most employees have seen that there are possibilities for improvement in efficiency that can lead to a considerable savings in time and in financial terms. Furthermore, the employee’s see possibilities to decrease built-up frustration by implementing some parts of this change. Other parts of the change the employees cannot understand. Some parts of the change it is not considered very feasible by the employees and therefore not positively received.
We have made a Dunphy and Stace change matrix see the difference in view of change management style between the management and employees in Eterra.
According to the change matrix that we made there are very different views on how the change is managed. From the viewpoint of the management this is a collaborative fine-tuning, but most employees feel that this more like a coercive fine-tuning to a coercive incremental adjustment.
How close to the theory, is the change being managed?
What has been done.
1. Written information on the Intranet all employees had to read and sign after reading
2. Meeting going through the given routines
3. Ongoing information on boards in the lifts
4. Changing routines when not fitting
What has not been done.
1. Reprimanding for not following the new routines.
2. Checking if anyone following the routine
3. Inform the employees on how the changes are going.
The process so far
The middle management at Eterra have it seems done very limited efforts to follow-up on this change. No account have been taken into this change process that employees might not take a active part in changing or even that some possibly will sabotage. Initially the new documents were posted on the intranet and a few meeting to introduce their location, and how they should be used. All employees were required to read the documents and sign that they had done so then it was followed with a meeting one department at the time with the responsible person. During the meeting employees where given the opportunity to come with suggestion on any possible changes to the new documents for the new routines and procedures. Furthermore, after the improvements to the new documents they where put up in the elevator as a poster. Since that time, the posters have been sleeping in the elevators.
In an interview with the Human Resource Department, they expressed that they did not really think that this was a “change”, but rather an “improvement” of existing working routines and procedures. That is maybe the reason why there have been very limited efforts to follow-up on the change if any.
Issues for the management to consider
- Lack of clarity as to what is expected of people and how their performance is assessed
- People possibly will feel an excess of routines and procedures
- No adequate procedures for evaluation the results
- Departments are too segmented into separate unit and there is inadequate provision to co-ordinate them
- Management not fully supporting the change
- Perceived lack of skills for new situation
- Customer needs
- Loss of flexibility
- Nobody really responsible for the change
It seems that the management feels that the whole change process will go smoothly and that all employees will start to implement the new changes into their working habits. The management has not asked for any feedback from the employees nor has the management given any feedback on the progress. Many employees are now back to their old working habits and even a few did not start using the new. In general, we can say that there has been very limited progress as a result from no or very limited follow-up in this change.
Eterra in the future
What can bee the traps of the change chosen by the management of Eterra is difficult to say. There is a danger that if they are 100% successful there will bee a more active hierarchy as shown in the figure under, this will slow down the organization when changing. The computer market has been a marked with the need for fast changes so far and the ones not managing to move fast are loosing. We do not know how the future of this market will bee but we can expect it to get back more of the drive it had. Will then Eterra be out performed?
One other large change in the organization is the adhocracy is much lower. Adhocracy has coherence with hierarchy when increasing the hierarchy the adhocracy is lowered. Adhocracy stands for “a dynamic, entrepreneurial, and creative place to work”. We are seeing an organization moving to hierarchy witch is defined as “a very formalized and structured place to work”. (Ref. Constructing an organizational culture profile).
A second question that is coming to light is what type of people is it that have been chosen to work for Eterra and to what degree will Eterra be a good work place for these people in the future? At this moment, it is not easy for computer people to get work in Norway. Just 2 years ago, there was a large demand for people with some kind of computer expertise. We can expect the future to be somewhere in-between the two. If Eterra gets to a more hierarchy company driven with to much bureaucracy there is a chance there will be a change in other people that will want to be employed by Eterra, is Eterra ready for the change?
There is also a great chance that the process will fail. If the change does not succeed, will the company stabilize? What will happen with the culture? The most probable outfall is that nothing happens. The employees will keep to the same rhythm as they are doing today just adopting the routines that are to there advantage.
We feel that changing things in Eterra will demand a more thorough follow-up. Just giving instructions without following up as this is going today, will probably never change anything in this organization where everyone is used to working independently. What they are changing in the office does not always influence the consultants that are working most of the time at customer sites.
Looking at the potential of this change succeeding has the potential to a more cost efficient and stable organization. There will be easier to get control over expenses. The risk of losing money on projects, getting more control over what is costing what, would be very helpful for the leaders of the future in the company.
Conclusion
The first question that comes up is, do all levels of the management actually want this change or are they just being pushed by there largest customer?
The middle management seems to be lacking the determination to complete the implementation of this change. There was a good start the first weeks with introduction of the new routines and procedures since then there has been very limited follow-up if any to measure progress of the change. That possibly is because the middle management feels that this is a coercive change and that they are sabotaging it or they have limited support from the top management to finalize the change.
We therefore are skeptical that this change will become a success. We think that the management will only see some of the routines that directly give benefits to the employees will be adopted and the routines that have not an obvious benefit will not be adopted. We recommend that there be given more focus on the monitoring from this stage on.
References
Ralph D. Stacey Strategic Management & Organisational Dynamics, Third Edition
Thomas, G. Cummings and Christopher, G. Worley, Organization Development and change, Fifth edition, West Publishing Company.
Dunphy and Stace (1993) ‘The strategic management of corporate change’ . Human Relations Vol. 46, No 8, p. 908.
Blak, R. and McCanse, A.A. (1991) Leadership Dilemmas: Grid Solutions p.29
Barbara Senior (2002) Organisational Change, Second edition
The Organizational Culture Assessment Instrument (Received in e-change class)
Interview with the Human Resource Department in Eterra, Norway (Not a formal meeting)
Internet
