Organizational change and leadership
Change is an inevitable event in human lives.All organizations and businesses are affected by change that governs the strategies adopted by these enterprises.The ability of the business outfits to adapt to changing conditions and the effective change management process is an important determinant in deciding the profitability and sustenance of the organization.
The literature review section focuses on organizational change process, challenges faced by organizations in implementing changes and the impact of leadership on the process of organizational change.
The Organizational Change Process
Organizations in today’s world operate in a dynamic environment that is driven by the globalization of economies, increased technology innovations and consumer demands. The changing demographics of the markets are responsible for large scale adaptations in product design, delivery and business processes. This has led to the growth of market competition and increased consumer expectations in terms of quality and attributes of the goods or services provided. Organizations are forced to adopt change their strategic management policies in the light of rapid changes impacting the market and business environment.
This leads to major strategic reorientations that relate to market, products, services, organizational structure, and human resources. The IBM report (2008) on Making Change Work states that the “effects of globalization, technology advances, complex multinational organizations, more frequent partnering across national borders and company boundaries – just to mention a few of the enablers and accelerators of change. ” All this has resulted in a continuous process of change that requires capable change leaders who can achieve the change objectives by leading the employees towards a better way of working and increased market potential.
Most organizations today face the challenge of leading change management process. It is widely accepted that competent change management can help businesses transform their operational procedures, outlook and approach towards more effective and efficient means of delivering goods and services. The benefits of leading effective changes within the organization is evident in the way change efforts “have helped some organizations adapt significantly to shifting conditions, have improved the competitive standing of others, and have positioned a few for a far better future” (Kotter, 1996).
Dean Anderson (2001) in his book Beyond Change Management has defined change leadership as the function of leading an organization through the journey of transformation. “Transformation, ultimately, is the journey from where an organization is to where it chooses to be, when the change required to get there is so significant that it requires the people and the culture of the organization to transform, and the journey must begin before you can fully identify where “there” is. ” The role of these change leaders involves designing and implementing an innovative work culture that adapts itself to changing demands of the operating environment.
The process of change management and the strategies adopted to implement changes successfully within the organization reflects its ability to handle crisis and emergent situations that may arise. “Organizational success has become directly attributable to its ability to handle and sustain strategic change” (Wilson, 1992). Leadership Theories and Practices Leadership concept has been explained and analyzed by many over the past few decades and most of them agree that management is distinctly separated from leadership. An individual can be an effective manager but not a good leader and vice versa.
“One difference between managers and leaders is that managers strive to produce order and stability whereas leaders embrace and manage change” (Nickels, 2008). The leadership theories emphasize that leaders can create a compelling vision for others to follow, establishes corporate values and ethics, and transforms the way organization operates to increase its efficiency and effectiveness (Nickels, 2008). Peter Drucker, as cited by Priya Nair (2009) in her article Leading the Way, the management guru explains that leadership is defined by results and not attributes.
An individual who makes good speeches and has large number of followers is not necessarily a good leader. Employees look upon leaders to provide them with guidance in times of crisis, help them identify opportunities and leverage them to their advantage. One of the vital aspects of leadership is helping them develop their competencies to match organizational goals and objectives and meet the operational requirements. “As we look ahead into the next century, leaders will be those who empower others” (Bill Gates).
Leadership is a vital concept in today’s complex business world and the above quote by Bill Gates holds much truth. An organization needs dynamic leadership qualities and behaviours at all levels to implement strategies, and raise performance. This type of scenario demands leaders who can inspirer and motivate, uncover hidden opportunities, implement changes and deliver tangible results. The lack of leadership qualities in an organization is the prime reason for failure of strategy, and inadequate execution of plans.
Leadership is one of the qualities that a manager must possess in order to be successful. “Leaders are observant and sensitive people. They know their team and develop mutual confidence within it” (Fenton, 1990). Poor leadership capacity can lead to strategic failure, lower productivity, and ineffective work environment that can damage the company objectives. In this context the newly promoted supervisor needs to change his leadership style from an autocratic mode to a softer and more human form of leadership style. How a leader operates, the leadership style they adopt, is as important as who they are.
It should be noted that leadership is contextual and different situations demand different approach. An effective leadership style is encompasses a more participative approach that draws suggestions from their co-workers giving them due credit for their work. “Research has found that employee participation in decisions may not always increase effectiveness, but it usually increases job satisfaction” (Nickels, 2008). The common characteristics of an effective leader include single mindedness, strong self-belief, strong sense of purpose, and charismatic.
Leaders are employed to get a job done with the assistance of a team of people over whom he has control. The team comprising of people is an important aspect of leadership.An effective leadership style stresses the importance of people in the overall scenario – since without people participation the leader cannot achieve anything. A persuasive style of leadership where the leader gives equal importance to the task at hand and the human relationship approach gives an incentive, a rationale, and motivation to the team to accomplish the work objective.
The leader’s responsibility is to balance a set of objectives that include accomplishment of targets, developing individuals, building a team, and accomplishing personal objectives too. He needs to decide how the resources can be effectively allocated to complete a particular job, monitoring and supervising against the work plan, attending to personal problems, praising individuals, recognizing individual abilities, building team spirit, encouraging and motivating the team to achieve desired results.
The role of a good leader is essentially to keep an objective view of the whole operations applying his extensive knowledge about the operational trends, problems, and activities. He guides the overall process armed with a deep understanding of the existing procedures, potential show stoppers that can prove a barrier to achieving set targets, and preventive action plans that can be implemented in times of distress. The role model leader gets the job done using appropriate methods to inspire and motivate the team members. The process involves the active involvement of each team member in the operational front.
This type of leadership approach invites suggestions from the team members on defining targets, identifying resources that can smoothen operations, identify risks involved and the best possible ways of mitigating such risks. This encourages the team members creating a sense of responsibility towards the project at hand in addition to giving them a sense of enthusiasm to fulfill the objectives. It gives the workforce a sense of belongingness and ownership to the tasks and set objectives increasing their satisfaction level.
Leadership styles within organizations pursue a more humane approach than it used to few decades ago. Autocratic style of leadership is being replaced by participative and free rein leadership styles that promote increased individual participation in managing the whole show. Nickels in his book Understanding Business concludes that various researches conducted have found that employee participation in decisions is highly effective in increasing performance and productivity besides increasing individual job satisfaction.
“Many progressive organizations are highly successful at using democratic style of leadership that values traits such as flexibility, good listening skills, and empathy” (Nickels, 2008). Challenges faced by organizations in change management “The process of change itself is a barrier to achieving change” (Credaro, 2001) and this account to the fact that any change disturbs the equilibrium to some extent. However, effective change management process can skillfully overcome these barriers to promote better work practices.
Thus, rapidly changing business environment and market demands are leading new companies to increase focus on human resource strategies and people centered policies owing to high dependence of work processes on skilled professionals and the ability of the workforce to adapt to changing work conditions. Change management is one of the challenges that managers’ today face on a regular basis and successful implementation of any proposed changes highlights the ability of the organization to increase market penetration.
Any changes to the current and existing work procedures are met with stiff resistance from the people involved. Managing and implementing changes in an organization is a complex task that requires an able leadership that has the capacity to visualize and identify possible barriers or resistance to the planned changes. The leaders implementing the changes need to fully understand the objectives behind the change process, how it can affect various departments within the organization and the necessary steps that can be taken to assemble the staff to promote the change.
The vision and objective behind this change has to be shared by everyone concerned with the change process. The change management process within most organizations is faced by stiff resistance from the employees on various accounts. Richard Cooke (2008) observes in his article Why Change Fails that it is hard to get change management right because it is a human process and hence requires “sensitivities and skills that the modern workplace tends not to value or nurture.
” Since the success of the change management process lies with the employees of the organization, people management skills and a humane approach to the whole initiative is much required. Traditional organizations adopted the age-old management practice of providing specific directions to their employees with managers giving explicit instructions on how to do their jobs to meet the organizational goals and objectives. “In traditional organizations, directing involves giving assignments, explaining routines, clarifying policies, and providing feedback on performance” (Nickels, 2008).
Most organizations adopt this management style. However, changing business environment and increasing complexity in the operating market environment has forced organizations to revamp their management styles and practice to more flexible and friendlier approach that encourages active participation of employees in managerial decision making process. “The ability to manage change must be core competence” (IBM, 2008). However, the number of projects failing on account of poor change management practices is on the rise.
The IBM report (2008) on Making Change Work observes that only 57 percent of the organizations surveyed reported a successful change management strategy in the past projects. Entrepreneurs are faced with mounting challenges in the form increased costs due to project implementation issues and failing to deliver intended business value. The other related factors associated to increased cost of failure of the change management process are evident in lost opportunities and waste of resources.
The report provides some major challenges faced by practitioners in implementing changes within the organization. These include changing employee mindsets and attitudes, corporate culture, lack of adequate resources, lack of commitment from the higher management, lack of transparency in communication of vital information, lack of motivation in concerned employees, technology barriers and change in operational systems. The changing mindsets of employees and their attitude towards change is one of the biggest barriers facing the managers in the change process.
“Practitioners typically find such less concrete challenges tougher to manage and measure than challenges related to business process or technology, which are more tangible and possibly capable of being changed permanently through a single intervention” (IBM, 2008). Challenging conditions often brings about a fear of uncertainty that breeds anxiety among the workforce within the organization. A capable leader must be in a position to understand these anxieties and boost the confidence level of the employees.
“Experts feel that sharing information and data with the employees alone cannot reduce anxieties; employees must have confidence in their leaders and they must feel safe under their leadership as well as get the assurance that the leaders will guide them towards the right direction” (Nair, 2009). Nair (2009) in her article Leading the Way also emphasizes that besides effective communication the most effective way of motivating the workforce during challenging times is to apprise the concerned employees about the developments and impacts of the proposed changes within the organization.
Listening to their doubts and observations is vital to gain an understanding of their thought process and opinion related to the change process. This requires the leader to be easily accessible to the team and involve them in the decision making process. This is a useful strategy since some of the suggestions from the employees who are directly concerned with the practical aspects of the operations can make a lot of difference to the way some of the issues are dealt and handled.
It can provide practical insight into how the situation can be made more effective and enable improved performance from the workforce. The additional benefit of this exercise is the involvement of employees in the whole process and their acceptance to the proposed changes. The task of the leader should revolve around the strengthening of organizational values that support the entire operation and revenue building model.
During the challenging times the leaders should focus on binding the employees together and emphasize the organizational values that instill a sense of confidence and trust in the workforce. “When the confidence level within an organization drops down, it is the responsibility of the people manager to inspire the people to give in their hundred percent and to assure them that their efforts are valued” (Nair, 2009). Views of practitioners Managers and leaders within the organization face the challenge of leading their teams to accept the changes effectively.
Mullins (1999) in his book Management and Organization Behavior observes that “the effective management of change must be based on a clear understanding of human behavior at work. ” Managers play a vital role in the change management process within the organization. Traditional management practices were based on authoritarian style where employees received specific instructions and directions from their bosses on how to complete the given task. Over the years the role of managers has evolved with visible shift of leadership practices from authoritarian to include a more participative approach.
Nickels (2008) in his book on Business Management state that the changing times have forced the management to view leadership and management in a totally different perspective. The businesses are increasingly being influenced by technology and knowledge based initiatives. This has led the managers to emphasize teamwork and cooperation rather than passing orders and disciplining their activities. (Nickels, 2008) Change management within organizations has drawn varying responses from business experts and managers that have led to the formulation of different strategies.
“Developing the flexible firm, decentralization, creating lean management structures, the explicit articulation of mission statements, empowerment, and the development of individual competencies to manage these organizations are part of the common parlance of theorists and practitioners” (Wilson, 1992). Employee training and development programs, leadership qualities and effective organization structure are some of the crucial factors that enable efficient change management strategies.
The IBM report (2008) on Making Change Work concludes that successful change management programs rely on people or change leaders who have made it possible for the organizations to implement desired changes to the work process or organizational strategies. A survey conducted by IBM for preparing this report on identifying the key factors for successful change management process reported that “leadership, employee engagement and honest communication are prerequisites for successful change” (IBM, 2008).
Successful projects require an in-depth understanding of the challenges and complexities involved in the process followed by specific actions to meet these issues. The lack of complete understanding of the risks and change parameters involved can lead to unexpected outcomes. Hence organizations make use of experienced and skilled change managers to reduce risk of failure. “Effective change leadership in the form of dedicated change managers and credible and experienced sponsors is critical.
It is equally important to cascade leadership responsibility to all levels of the organization, creating empowered employees who support and enact change” (IBM, 2008). Employee empowerment is a new approach to management that incorporates employee self development programs to enable their involvement in corporate decision making process. Robert Heller in his article “Employee Empowerment: Management giving power to the people” defines empowerment as organizational culture where everyone can take action to enhance his or her own work, either in personal or professional terms.
Empowerment has been defined by Dimitriades (2001) as the process of enabling, and supporting an organization’s human resources to make high quality, efficient, and effective decisions leading to continuous quality improvement. Employee empowerment is a new trend that has made its way into human resource management practices in the corporate world. Employee empowerment has different interpretations and applications in different organizations. Some organizations provide its employees with the scope to enhance and enrich their work profiles by undertaking additional responsibilities.
There are other organizations that encourage its employees to learn new skills and enrich their work experience by actively participating in managerial decisions and handling operations in their own way. Duke Okes and Russell T. Westcott observe in their article “Employee Empowerment and Involvement” (2001) that employee empowerment implies giving up “power traditionally held by management, which means managers must take on new roles, knowledge, and responsibilities.
” This process requires significant amount of time and effort to build trust, confidence and evaluate individual capacities in the given work environment. “As organizations reduce management layers, employees are needed to move into decision making areas that were once the sole domain of management; more delegation is needed to reduce product cycle times and to respond to changing market conditions” (Palmer and Hardy, 2000). Traditional business outfits had management at the top level having well defined roles and functions that include directing, managing and leading the organization.
However, the empowered organization promotes a flatter structure. Organizational structure plays a critical role in determining the extent of employee empowerment within an organization. Various studies on this subject conclude that the levels of reporting and accountability existing within an organization are of prime significance in ensuring employee participation in managerial functions. Ian Palmer and Cynthia Hardy argue in their work “Thinking about Management” (2007) that employee involvement programs rely on flat organization structure having little hierarchy.
“Organizational structures and behaviors that allow employees access to information about the mission and performance of the organization, coupled with rewards based on individual performance, can help facilitate employee empowerment” (Potterfield, 1999). Potterfield (1999) claims in his book “Thinking in Management” that empowered organization is “ideally an open system, where information is shared freely, and where communication takes place in all directions.
” The organization is structured in such a manner that shifts the focus of decision making from vertical to more horizontal lines – this implies that the staffs at the forefront actually involved in the job process are better equipped to judge the work processes and decide on how the contingencies can be met. Organization structure is perceived to be a key element in determining type of managerial strategies and problem solving mechanism adopted by businesses. The non hierarchical organizational structure promotes responsibilities and motivates the employees to put in their best at work resulting in high performing organizations.
However, such work culture demands strong commitment and high level of energy from the employees. Potterfield (1999) states that empowerment can be effective only when the organization provides the four essential ingredients to its staff and that includes – information about the organization’s performance, rewards based on organization’s performance, knowledge that enables the workforce to contribute to organization’s performance, and power to make decisions that influence organizational performance.
Employee training and development initiatives assume a significant role in empowering individuals within the organization. This kind of organization is based on developing and building strong interpersonal interactions, commitment to responsibility, natural leadership, and self defined goals and objectives. Leadership is widely encouraged within such an organizational framework and individuals display high level of understanding and cooperation among themselves. Sponsors or mentors guide the newcomers to achieve high level of performance and commitment nurturing strong sense of commitment towards the organization.
Employees on the other hand benefit from the extensive learning and self development opportunities within the organization. This fulfils their personal and professional objectives creating a sense of worth and enthusiasm at work. However, the whole framework requires time and efforts to make the whole system work cohesively and contribute to organizational goals. Individual conflicts, behavioral issues that include employee attitude, biased opinions and preconceived views are some of the deterrents that pose limitations to this kind of organizational design.
Overcoming such limitations requires skillful handling of situations. Gareth Morgan in his book “Creative Organization Theory” suggests that as the amount of uncertainty facing an organization increase, coordination mechanisms that include goal setting, hierarchy and rules, are usually supplemented by strategies that either reduce the need for information or increase the information processing capacity of the organization. Organizational design is to a large extent guided by the flow of information across various levels and departments.
Entrepreneurs re-engineer business processes to accommodate a flatter form of organization structure that necessitates free flow of information and knowledge to the workforce. An organization needs to understand that the goals and objectives set need to be tangible and challenging enough for individuals to buy it. The leaders play a vital role in challenging and motivating the team members to gain their commitment to the cause. The broad company goals need to be broken down to short-term objectives that are achievable and yet challenging to inspire the workforce.
The leaders should elicit response from the team members on the strategies that need to be adopted to achieve these goals. It is imperative that employees identify with the company goals and objectives and effective leadership is displayed in communicating and creating a strong belief in the company objectives among the workforce. In order to induce a strong belief in the company goals, the leaders need to believe in these objectives foremost. The management and leaders within the organization face the crucial task of building a shared vision.
An effective leader is successful in articulating these goals and objectives in clear practical terms that the employees can easily relate to. Subsequently once the goals are set, the leaders need to define and identify the parameters on which the objectives will be assessed and the time frame in which it needs to be completed. Involving the team members in such strategic planning not only creates a high level of enthusiasm but also increases the motivational level among the workforce.