Due to the economic crisis in recent years, many businesses have gone through organisational change. Yet, the role of HR and reaction of employees have yet to be fully addressed.
The Truth About Managing Organisational Change
“May You Live in Interesting Times”
I found out recently that this old saying is an insult not a complement. You can see why, as life certainly can’t be described as dull or boring at present.
Work seems to be a never ending round of changes at present, leaving everyone’s spinning as to priorities, focus and lines of accountability. It’s hardly surprising given the comings and goings at the top of organisations and the restructuring to adjust for all the layoffs. As well as all the new processes and sign-off requirements to ensure everything is more transparent and that there are visible paper chains around the business.
The almost inevitable restructuring that has followed the redundancies and other cost cutting measures has left most people wondering who reports to who. Moreover, who is accountable for what and therefore how to get certain things actioned.
The amount of pointless processes and triple sign-offs being introduced means everyone is beginning to feel more like a civil servant.
All in all, it feels like people are spending most of their time trying to get things done rather than actually doing their job. Add to this the talk that there are further cost cutting measures to come for some companies i.e. more redundancies and it still doesn’t feel like a very positive environment at present.
Organisational Change Management
The financial sector is undoubtedly undergoing some significant and potentially fundamental changes in how it is structured, how it is regulated and thus how it operates. As a result, the larger business world is changing in kind.
Those organisations that navigate the current uncertainty most effectively, remain focused on key objectives and retain an engaged workforce will adapt quickest. They will seize the huge opportunities that this change will inevitably offer.
This is equally true for HR, who have the opportunity to redefine themselves as a key strategic partner by adding tangible value to the business. To do so, however, they need to demonstrate they can lead and facilitate business transition.
One of the biggest challenges is that business has come to think of change as something that needs to be and can be closely managed. It needs to follow a strict project plan and as such is highly predictable.
In so doing, IT, any management consultant who has ever been near Six Sigma training and those leading restructures/M&As position themselves as change specialists.
However, change management has become confused with project management. The latter is about taking something (e.g. an organisational restructure or the introduction of a new IT platform such as SAP) from point A to point B as efficiently as possible. Whereas, sustainable change is about engaging employees, driving belief and confidence thus changing behaviour and culture.
To put it another way, a new set of risk management strategies and regulations can be implemented successfully from a project management perspective. Although, unless there is a fundamental shift in the City’s attitude to risk and a culture of accountability, another crisis is almost inevitable.
The first step is in engaging business leaders in clearer language, to differentiate between efficiency and sustainable effectiveness/performance. Efficiency, or project change management, is about a finite event where one thing stops and another starts.
Transition goes beyond this, it is a journey aimed at creating sustainability. It requires the facilitation of people through their emotional responses to the changes by focusing on engaging them, encouraging behaviour change and shifting the culture.
This shift in language and focus gives HR a huge opportunity to help shape their organisation’s new performance paradigms. They can do this by grabbing a key role in facilitating the required transition.
Organisations are so focused on managing the process of change, they forget the impact it is having on their people. Psychological research has found the most common impacts of organisational change.
The Effects of Organisational Change on Employees
1. A High Degree of Uncertainty and Fear
This is normally a result of poor communication from leaders and management. As well as worries over when the next round of redundancies to come.
A survey in the UK in 2005 showed that 75% of employees get their organisational updates from corridor gossip rather via corporate channels. Unfortunately this will always be more negative than the reality.
2. A Drop in Performance
This is due to lack of clarity about key performance objectives, clear lines of accountability and loss of focus. This includes change processes which often see a disproportionate increase in meetings, many of which offer little real business value.
3. Declines in Morale and Team Work
Uncertainty, fear and the corresponding dip in performance inevitably lead to a drop in confidence in the future of the business. Furthermore, it sees the lowering of trust in senior management and a greater focus on looking after ‘me’ rather than working as a team.
4. Resistance to the Changes Being Implemented
One of the few things people feel they have control over is how they engage with the changes being implemented. The ambiguity and confusion will often lead to people seeing the old ways through rose tinted glasses and a determination to block these “ill considered, poor changes that will never work.”
(Main image from Queen Mary University)