Customer satisfaction in the 21st century is the driving force of organisations, dealing with the public. Many companies are implementing the CRM (Customer Relationship Management) system in order to provide better services to their clients and to retain them. Therefore the focal point of strategic change nowadays is the foundation for the strategic management process.
Mintzberg 1994 saw strategy as being emergent, and not the outcome of explicit strategic planning.
Figure 2 is an outline map of strategic change that Colin Carnell developed. The figure relates to the scope, scale and complexity of change.
Strategic management
There are key requirements of strategic thinking: a definite purpose must be in mind; an understanding of the environment, especially any factors that will contribute the success of failure of the project.
Dr. Jagdish Sheth provides a framework for understanding strategic management. His framework consists of the following points:
- Formulation of the organisations future mission in light of changing external factors such as regulation, competition, technology, and customers;
- Development of a competitive strategy to achieve the mission;
- Creation of an organisational structure, which will deploy resources to successfully carry out its competitive strategy.
Taken from “What is Strategic Planning” - www.allianceonline.org/faqs/sp_main.html
Strategic planning involves anticipating the future environment, but the decisions are made in the present, it does not attempt to make future decisions. Because of this organisations must stay abreast of the changes in the market place and adapt to those changes when they occur, but strategically plan the route.
Common obstacles in implementing Strategic Planning
Fig 3. Common Obstacles to Implementing Strategic Change, adapted from European Management Journal, (Vandermerwe 1992)
Fear factor and human resistance
Resistance to change has been the obstacle of change that management and change leaders fear, as the result of handling the resistance can ultimately lead to success or failure of a project. Dealing with the resistance to change at an early stage can reduce the risk of failure of a project. Approaches such as those described in appendix 2 can help deal with resistance, but some of todays learning has shown that both the project and change leaders can benefit from resistance. There is in fact utility that can be gained from resistance.
Complacency of Low Sense of Urgency
There can be problems when conducting change, and those problems that can arise cause complacency and an atmosphere that suggests this does not need to be completed urgently. People are afraid that they do not know and therefore will put off the inevitable for as long as possible. E-commerce strategic planning is not a case where does involved in the change can become complacent. The need for rapid time to market means this obstacle should be overcome and stamped out when embarking on an e-commerce change program.
Insufficient Dedicated Time Set Aside
Many organisations embarking on strategic change tend not to prioritise tasks, giving more time to routine tasks than stages of implementation and testing.
Poor Communication
Poor communication can kill a strategic change and in today’s society poor communication cannot be an excuse for problems within a project. With the number of mediums available nowadays and the common use of e-mail, poor communication should not occur as much as it did in 1991.
Late Systems and Technology
It is said that many companies do not deal with the technological side of change till later on in the change program. This can cause numerous problems and ultimately the failure of the project.
The need to develop strategies to deal with change is an important success factor. It enables the organisations employees to lean back on guidelines, so they know here they are going, what they are meant to be doing and how it effects them. But the need to carry out strategic planning in the right manner is essential.
Planned and Emergent Approach
There are two types of approaches to change planned and emergent approach. These two approaches are very different.
When we think of a change nowadays we think of it as a constant cycle. Change is very much a process that is linked to the changing environment. Many companies who are constantly changing their businesses in order to stay competitive in their environment, are using the emergent change approach.
The planned approach to change has operated for the last fifty years and is based on Kurt Lewis models. The planned approach is the predicted and planned step by step process that the company follows through, going from on state to another. See Kurt Lewis ‘Three Step model’ in appendix 1.
When conducting change whatever form the change appears in, managers and agents of change will not be successful if they do not understand the different types of approaches there are, and apply to them to the situation at hand.
The Planned Approach
There have been many different models developed for the planned approach over the years. Many were developed to meet the needs of specific organisations but many have also been developed from organisational development. Organisational development has been defined as ‘a system wide application of behavioural science knowledge to planned development and reinforcement of organisational strategies, structure and process for improving of organisational strategies, structures and processes for improving an organisational effectiveness’ (Cummings and Huse (1989) Managing change, 2nd edition, Burnard Burnes)
Kurt Lewis was the pioneering source of the planned approach. He developed three models called:
- The Action research Model
- The Three Steps Model
- The Phases of Planned Change Model.
Many change management articles always refer to the three step model. Although there are some models talking about moving on from this model and making it up to date for todays society, it seem that no one really has. Everyone still talks about it, and there are some that believe in order for an organisation to implement change of any kind, the company does need to unfreeze. This will not be the case id=f organisations were constantly changing and adapting to their environments. Todays environment is ever more turbulent, flexible, and there are certain organisational environments.
Another model of change, originally based on Lewis three step model and thirty other models of change is Bullock and Batterns change model involving four steps.
The model concentrates on getting the company from one state to another. There model stresses that change is a constant cycle, including diagnoses, action and evaluation, and further action and evaluation. The developers’ stresses that fact that once changed people should not be able to regress, and o back to the old ways of doing things. The four stages are:
- Exploration Phase;
- Planning Phase;
- Action Phase;
- Integration Phase;
An elaboration of each phase can be seen in Appendix 1.
The Emergent Approach
Continuous improvements and changes in the business is called the emergent approach. It was a new approach that emerged in the 1980’s.
It is argued that the emergent approach is suited to the turbulent environment that modern day firms now operate in. The approach recognises the modern day organisations need to streamline their business with the changing environment in order to succeed.
“Change is an ever-present feature of organisational life, though many would argue that the pace and magnitude of change have increased significantly in recent years.”
Managing change, 2nd edition by Bernard Burnes, P171
Dawson (1994) and Wilson (1992) argued against the concept of planned change. They h=said that the business environment is ever changing and even more dynamic and not static. They argued that the planned approach of Lewis three step model of unfreezing ignored the dynamic nature of the business environment.
“The planned approach, by attempting to lay down time tables, objectives and methods in advance, is too heavily reliant on the role of managers, and assumes that they can have a full understanding of the consequences of their actions and that their plans will be understood, accepted and can be implemented.”
Managing Change- 2nd edition by Bernard Burnes, P187
The emergent approach is based on the fact that it is seen as continuous improvements. The approach is seen as bottom driven, and concentrates on constant change, unlike planned change. The approach believes that change can not have a solid state and should be a continuous process.
“Change as a period of organisational transition characterised by disruption, confusion and unforeseen events that emerge over long timeframe.”
Managing change- 2nd edition by Bernard Burnes, P188
Dawson (1994) stated that change must be linked to the complexity of the changing market place, the way in which systems are managed and the redefining of organisation relationships and boundaries.
(Managing Change, 2nd edition – Bernard Burnes)
This approach works on the basis that new changes within the external environment should instigate appropriate changes within the internal business.
The emergent approach should, “promote extensive and deep understanding of strategy, structure, systems, people, style and culture, and how these can function either as sources of inertia that can block change, or alternatively, as levers to encourage an effective change process.”
Dawson (1994) Pettigrew and Whipp 1993; Wilson 1992
This approach involves a major change that senior management manage. The approach is bottom driven and it is a belief of the approach that a small group of the senior managers can not identify all significant changes in the external environment that need to be made in order to be successful.
What is Benchmarking
Each organisation needs to formulate, and refine, in the light of experience and change of circumstances, and its own approach to quality. This will reflect many considerations such as market place factors, leadership style, corporate culture, and the contribution of suppliers and customers. Other benefits are:
- Improved customer satisfaction;
- Improves processes;
- Identifies competitive positions;
- Help set attainable targets;
- Increases the desire to change.
Benchmarking promises to return significant performance improvements, based on efficiency, cost savings and revenues.
A survey carried out by Coopers and Lybrand in the 90’s surveyed 105 board members. The results were as follows:
- 67% of companies used benchmarking;
- 82% of such programmes were seen as successful;
- 88% of companies using benchmarking did so regularly.
2.3 Total Quality Management
Total Quality Management (TQM) was adopted by Europe in the 1980’s. A simple definition of TQM is that it is an organisational wide effort to improve quality through changes in structure, practices, systems and above all attitudes. (Dale and Cooper (1992) Managaing change, 2nd edition, Bernard Burnes).
2.3.1 TQM Drawbacks
There is not much written research of the drawbacks of TQM. There are companies that have problems with implementing TQM with the introduction, development, implementation and measurement of quality improvement.
It is clearly seen that that the key to success of an enterprise is the high quality of a product and service to their consumers ensuring customer satisfaction. Worldwide competition now ensures that companies are improving their products and services in order to keep consumers and competitive advantage. Organisations have to employ four types of characteristics:
- An understanding of what the customer wants and to provide it, immediately on demand;
- To provide products and services of high quality and reliability consistently;
- To continually improve its products and services to satisfy customer expectation;
- To integrate supplier process as part of its manufacturing process to achieve the lowest cost for the end product.
3. Change Leadership
The need for strategy is changing an organisation allows for it to co-ordinate activities, it provides direction to people, providing a framework for those involved in change to fall back onto, creating a sense of stability in the change period.
It has long been the case that the success or failure of a project has laid on the shoulders of management. They are the people to create the strategies, rules and guidelines for the rest of the organisation to follow. Leading change has seen to become a more participative approach as the years have flown. Many managers of change now involve employees in the vision of change in order to create competitive advantage.
The success of change does lay partly in the management of its progression. Over the years change leadership has changed to become more about leadership style.
“It has been a long-held belief that the major success factor which distinguishes successful organisations from their less successful counterparts in the presence of dynamic and effective leadership”
Yukl, 1994 (taken from Managing Change, 2nd edition, Bernard Burnes, P346)
The style of leadership used when conducting change has an important role in the success of the project. One such framework was developed by Hersey and Blanchard 1977.
Figure 4, Adaptation of Situational Leadership theory ( from Hersey and Blanchard 1977) taken from Managing Change in Organisations, 3rd edition, Colin A Carnall.
Figure 4 shows four leadership styles each style has task and relationship elements within it. The diagram proposes the type of person that would follow each type of style. For example, those that would follow the telling style are people that do not wish to think for themselves and take responsibility, therefore they are at the low end of the maturity scale at the bottom of the framework. The selling (motivation to take part) style of leadership is described as a style for those that want to take responsibility but can’t. The participative approach is used for those who have responsibility but may be motivate further to increase work by being involved in the process, and the delegating style is for those who have big responsibilities and a high level of maturity for getting things done.
The framework does have its downfalls. The framework is said to only deal with those under the leader, e.g. employees under the manager, and not the managers themselves. Change leaders are not a class of their own and must be included as well as their followers.
In dealing with the process of change managers, you also have to deal with resistance to it as well. I appendix 2 you can see some of the different approaches that mnagers use to deal with that change. Resistance to change is dealt with in the next section.
‘Carnall 1995’ said that its up to managers to encourage change. They should do this by ‘believing in the potential of the people involved, equipping them appropriately, training them where necessary and much more besides’. It is true of anything that if a person feels encouraged in a task they have to perform, and then they will be much more cooperative and willing to participate in the change.
The style of leadership addressed in figure 4 all aid in the role of a change leader.
Being a change leader he/ she is going to come across a number of problems. The most being that people change fear and that people prefer security and stability and are happily set in their ways the majority of the time.
Some of the roles of a change leader incorporate
- Aligning the organisation with the current business environment;
- The need to ensure stability within the organisation, giving the employees a sense of security;
- Promoting change all at the same time.
Encouraging people to be involved in a change is in my belief to be one of the most essential roles of leadership. Incorporating employees into the change strategy, allows them to crate a sense of stability, making the employees feel wanted and needed in order for this change to be successful. But at the same time many are wary that they are being used for information purposes and that their jobs will be automated when it comes down to technology.
3.2 Roles of Management
The traditional approach to the management of change does not require just an instigator of change but different levels.
3.2.1 The Inventor
- Develops and understands the technical aspects of the idea.
- Does not know how to go about winning support for their idea.
3.2.2 The Champion
- Believes in the idea;
- Visualises the benefits;
- Realises the cost vs benefits test;
- Obtains financial and political support;
- Overcomes obstacles.
3.2.3 The Sponsor
- A high level manager who removes ‘organisational barriers’.
- Approves and protects the idea within the organisation..
3.2.4 The Critic
- Provides reality tests;
- Looks for weaknesses and shortcomings in the idea;
- Defines rigid criteria that the idea must pass.
It is vital for a change initiative to have the four roles above. Without such roles as the sponsor of champion the change would not progress past its idea stage. These roles play a significant role in the bottom driven change.
3.3 Bottom Driven Change
Here ideas of change are initiated at bottom levels of the organisation and channelled upwards for approval and sponsorship. Without the champion these ideas would not pass top management. The sponsor also plays a key role in this approach to change.
3.3.1 Top Down Change
Top down approach to change is driven by the managers. Here the under managers are seen as followers of the change.
3.3.2 Team working
Team working is an essential part of change management. To enforce the need for team working managers must lead by example. Participation approaches ( see appendix 2) aid in the portrayal of creating a harmony between managers and their followers, sharing their knowledge to create a trustworthy environment.
From the development of team working in order to produce effective change, meetings with teams and managers will be the bi-product. It is here that a sense of collaboration between followers and management is created. Many employees will feel that they are included in the say of change in the organisation. Communication of current change and reassurance can take place here, reducing the potential for resistance.
The need of collaboration is even more important. Many teams that are effected may compete in order to get favour from managers or top management. This does have the potential to create more effective employees, but it also has the potential to create a separation between departments, and cause the change program to become separated in departments and the common goal to be lost.
Managers in teams need to be able to delegate successfully when implementing a change strategy. Poor delegation, along with responsibility, and support for change initiative will lead to ineffective management. It is here that teams begin to lack motivation to complete the project. The need for motivating factors is essential in long-term project, and instigators and champions of change need to find ways of sustaining that motivation.
An example of team work can be seen in the diagram below produced by Grunden (1986).
Fig 5 Grunden 1986 Adaptation of Human Orientated View
In the view of figure 5 the focus is on human orientation (participation, team work). Grunden believed that it reduced the complexity of developing a system.
Team working for in house development calls for less reliance on the ‘experts’ external to the organisation, but clearly use the knowledge of company employees.
The need for effective change leadership is therefore an important success factor. Many organisations fail at this stage due to two responsibilities. One that they do not train managers in dealing with change projects or two they just do not have the personnel to deal with such a problem even if trained.
The change leader needs to be sympathetic to the effected parties in change, but also must be strong and directed in order for success.
3.4 Resisting Change
The challenge that successful businesses have faced for many years is convincing everyone in an organisation of the need to embrace change. Many companies in todays day and age understand that managing change in organisations is mainly about understanding human responses to change. Although resistance to change is widely quoted and exists as a topic in itself, many people are in favour of change if communicated with at an early level. Some organisations see change as a failure of the ‘old’ method but this should not be the case, it should be seen as a positive step forward for the organisations in terms of competitiveness and organisation improvements.
“The primary motivator for how change is accomplished resides with the people within the organisation.”
Benjamin and Mabey 1993
The need to understand and study this topic in conjunction with conducting change within organisations is important with the flow organisational change. Methods for dealing with resistance to change an be seen in appendix 2.
Managing organisational change is about managing and understanding human behaviours. Although organisations will never nail it on the head and produce a perfect change plan, many implement strategies that try to deal with the human response to change, trying to minimise resistance.
One of the formulas developed by Beckard and Harris 1987 to deal with resistance to change is:
Dissatisfaction x Vision x First Steps > Resistance to change
The formula translates to; the first three components of this approach must all be present to overcome resistance to change. Dissatisfaction with the present situation a vision of what is possible in the future, and achievable first steps towards reaching this vision.
The equation works that if any of these factors are zero or near zero then the product will be zero, and resistance to change will dominate. (Beckard et al)
With change, there are anxieties that loom large in managers mind (Schein, 1993) and those workers also employed. One way or another, these anxieties usually resolve around fear of change and dealing with ‘uncertainties’. Facing up to, and dealing with, these anxieties is not an easy process.
People are naturally reluctant to confront change in the work place. The normal approach is for agents of change to appeal to peoples intellectual sides. Given reasons such as job improvement, increased sale, profit, and cost savings. But they skirt the emotional needs of those employees, such as fear, insecurity and betrayal.
It is true that the way a person deals with change is a direct link to the way they were brought up. A person that has dealt with change a number of times, for example changing cities or moving house, a more equip with dealing with change than a person that hasn’t experienced change very often.
Research undertaken by Mauer (1996) stated that one half of two thirds of corporate change projects fail, and that resistance is “little recognised but critically important contributor” in that failure.
Resistance to change is often seen by those inducing change and the enemy, however the resistance can be learned from. By understanding the resistance to the change managers can help implement change more effectively.
In a perfect world managers of change would be able to deal with those involved in change individually, helping those who have a problem with change. But in reality this is not the case, managers are not mind readers and in the type of market place that we have today, where time to market is rapid, managers don’t have the time to deal with individuals. Managers themselves may be frightened by the prospect of change. But managers or supervisors must recognise that they have significant role in this process and if they are not proactive in their approach they are likely to be the most significant barriers.
You would think that with all the change we encounter as we develop our lives, we would be used to change and accept that this would be part of the natural course of things. Change is widely accepted in the development of our social lives getting jobs changing house, following technology, even following fashion but not in the organisation.
Some changes are forced upon us in society. For example, within four years time we’ll have to have digital television because the analogue line will be used for video streamlining for mobile phones, so if you want to watch television you will have to get digital television. But although many people have complained, there has not been much action taken to deal with this advancement. Many people have accepted that with the advancement technology this will eventually be the natural course of things.
But whenever change occurs in organisations there is quick resistance to the process. Many resist change because they are worried about the security of their jobs, especially in the world of IT. Many worry that when technology is implemented that the automation of certain processes are going to cause redundancies as many will not be needed any more. This is just one of the possible reason why resistance to change occurs. It hits the Maslows hierarchy of needs
Figure 6. Maslows hierarchy of needs – Abraham Maslow
The safety level of the hierarchy is interrupted and the safety of job becomes questionable. Workers no longer feel safe in their positions, and worry that they will become redundant. Although it is said that many do not actualise their safety needs, many realise their needs when major change occurs. Some may have reached the third stage, where they feel they belong to the company and feel loved, it is possible that these people will not fall back as because they feel loved, secure and feel that they will not be effected by the change in a major way.
Resistance to change has long been recognised as the determining factor in the success or failure of an organisation change project.
Reason for Resistance
Some of the reason that resistance arises for are listed below. It was believed in the 1940 that resistance to change was purely brought on by individual self-interest, self-interest that clashed with the general well being of the organisation. Today a wider view of the resistance is taken. The application of psychological, sociological and anthropological techniques have been applied. Rather than just self-interest reasons such as the ones on the next page, listed by David Hawley of Sheffield Hallam University 2001 are now those resisting factors.
