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Dynamic World

INTRODUCTION

In today’s dynamic world, change has become a constant feature of the organizational life. However, the effectiveness of change management initiatives is frequently open to question.

From the perspective of organizational development, change is “a set of behavioural science-based theories, values, strategies, and techniques aimed at the planned change of the organizational work setting for the purpose of enhancing individual development and improving organizational performance, through the alteration of or organizational members’ on-the-job behaviours’ (Porras en Robberts).

Technology advancement, global competition, economic pressures, complex business environment, and the changing needs of customers, force managers to change their organizations’ structures and procedures to be competitive. Managers regularly apply organizational change programs such as restructuring, reengineering, downsizing, merger, acquisition, and total quality management to reduce operating costs, improve performance, and enhance efficiency.

There are several reasons why change models fail. Every transformation leaks value at various stages of the implementation process: some prioritized initiatives are never done, others are implemented but don’t achieve bottom-line impact, and still others may fail to sustain their initial good results. But at every stage of the process, good implementers retain more value than poor implementers (McKinsey).

A large European study found that the most successful organizations make mutually supportive changes in terms of changes in roles, governance structures and strategies (Ruigrok, Pettigrew and Whittington).

Susanto also states that what available data indicates is that there are so many cases of change/business transformation initiatives strongly deployed and unsustainable because of lack of organization readiness and lack of change governance and stakeholder management.

In this paper the 5 most common reasons why organizational changes in general fail will be reasoned by different sources.

5 REASONS OF ORGANIZATIONAL CHANGE FAILURE

There are not only 5 reasons why organizational change programs fail. There are reasons such as poor communication, difficulties with the company culture, underestimating complications during the initiative, insufficient progress measurement tools, employee training and so on. In this chapter the influence of; poor planning, inadequate support from leadership, lack of resources, priority focus and poor leadership skills on change management will be substantiated by various sources.

1. POOR PLANNING

Lack of planning and vague and unclear goals are often associated with failure. According to Talib, this is also the case for organizational change programs. Therefore, is poor planning one of the 5 major reasons why organizational changes fail. Inappropriate planning will reason the failure of the change management program as it is essential for staffing, determining policies, action plans and defining roles and obligations (Mosadeghrad and Ansarian).

The change program should be feasible. All managers and employees should agree and accept the change program plan and be dedicated to its execution (Land et al.). Leaders are frequently too focused on getting their solution designed that they dive right into the design phase of the organizational change without doing the required planning. But real strategic change requires not merely rearranging the established categories but inventing new ones (Mintzberg).

Another reason why planning is one of the failure reasons is because planning represents a calculating style of management and not a committing style. Leaders with both a committing and calculating style involve all employees in the planning journey. This results in an inevitable enthusiasm that get build along the way.

2. INADEQUATE SUPPORT FROM LEADERSHIP

Top management itself may display a lack of commitment to change due to numerous reasons. Their commitment is evident in several ways: their unambiguous acceptance of ownership and responsibility for success of the change initiative, eagerness to be involved, willingness to invest resources and to take tough decisions when required, awareness of the impact of their own behaviour, a consistent message, and the holding of regular reviews of progress (Gill).

Srinidhi states that the most critical difficulty to the change implementation is certainly lacking support from the top management. According to Hansson and Klefsjo, the involvement of top management is creating a sense of urgency. Low management commitment and involvement can result in failure in as many as 80% of firms (Jaehn).

The limited expertise and experience of organizational change programs become a large obstacle for top management’s inactive participation in the program. The ineffective communication between management and employees is a big part of the reason why low management is not as committed to the change program (Psychogios and Priporas).

Employees have seen so many change efforts stall due to lack of support that they have become sceptical and unwilling actively to support the change until a clear demonstration of support is made. All in all, the most successful change tactics were those in which members of the change target perceived early and continuing change agent support (Nutt).

3. LACK OF RESOURCES

Change requires in every situation cost, effort and time. It is argued that the lack of resources is another cause of the failure for the change programs (Mourier and Smith). Adoption and sustainment of change are long term investments. One cannot just implement a change whether that is within a subdivision or for the whole corporation. Allocating the necessitated resources are crucial and will lead to full benefits. A research conducted by IBM showed that the need to lead change is growing, but our ability to do is shrinking.

Lack of resources do not only mean financial and technology resources and tools but also human resources. Human resources need to have the right training which will create a higher productivity rate. This is usually under or overestimated during times of change depending on the organisation which creates conflicts.

It is necessary to understand the current state of the company. What resources are available for change, what resources will suffer and what other resources are needed; these are all questions one should analyse before the change is even introduced. Companies often underestimate their capacity, thinking that next to the total workload for running current operations there are enough resources to conduct change activities.

4. PRIORITY FOCUS

During organizational changes, it is important that not all the priority goes towards the change. In various sources it is mentioned how leaders often focus more on the system changes instead of focusing on people that will be dealing with the changes. Colan argues that sustained change is always driven by people. Even implementing new software successfully is more about the people who will use is, install it, train it, and support it than it is about the system itself (Colan). Change is all too often regarded as a ‘quick fix’. This fails to address the implications of the change for the organization as a whole and therefore causes unforeseen and unacceptable disruption. (Gill)

Lack of communication or inconsistent messages and the resulting misunderstanding of the aims and process of change lead to rumours that demoralize people and to a lack of commitment to change. Because every issue or problem within a given change initiative either gets prevented, solved, or caused by the skill of the change leaders in charge. Often there is a negative employee response to organizational changes due to the inconsistent communication between the employees and their leaders.

Oreg cites a number of studies that suggest that a key determinant of resistance to change is the extent to which potential change recipients perceive the change as personally beneficial or harmful.

According to a study conducted by McKinsey, the most important practices for successful change management are communicating clearly and establishing priorities. Respondents agreed that the organizations’ desired outcome for change management was 3.5 times likelier to succeed if the changes had been clearly communicated prior to its launch.

Hayes states that, all too often, managers fail to anticipate resistance because they only consider change from a rational resource allocation perspective and fail to appreciate that many organizational members are much more concerned about the impact it will have on them personally.

All things considered, it can be argued that the most difficult challenges facing leaders today are making sure that people in the organization can adjust to change and that leaders can foresee where the organization is currently placed in the market and where it should be in the future (Heifetz and Laurie)

5. POOR CHANGE LEADERSHIP SKILLS

One of the few reasons that guarantee a failed change initiative is ineffective leadership (Cummings and Worley). Goleman mentions in the Harvard Business Review that organizational change indeed requires effective leaders who are capable of applying different leadership methods in each situation. He argues that the role of a leader is to not only motivate and inspire the employees but also empower them to take and share the responsibility for the organizational change. In this manner they will be able to develop their skills during the change program and apply them to their jobs effectively and efficiently. Authors Pasternack and Viscio also highlight the weight of the right leaders during change management. Similarly, to Goleman, they state how the right leaders involve their employees in the program to ultimately overcome resistance and conflicts.

A study of 243 managers conducted by Hrebiniak that we in the processes of change implementation concluded that the foremost obstacle to the implementation of change is the lack of a manager’ ability to manage the change. These managers create more friction between the company and its employees whom are applying the organizational change (Hrebiniak). Comparably Longenecker states that the reasons for ineffective management can be insignificant selection of strategy methods and the lack of support from the upper management.

Unfortunately, we don’t train our leaders enough to become competent change leaders. Leadership development is a part of practically all large organizations but change leadership development is missing. The net is that leaders tend to run change initiatives like they run their organizations, and the two are vastly different.

Therefore, competent managers should be recruited to lead organizational change programs. They should be trained in change management theory and practice to be able to inspire employees to apply the changes and achieve organizational goals.

They must be active, consistently supporting the change teams as they design and implement changes. They must be out communicating the benefits of the change to stakeholders and listening to and responding to their concerns.

CONCLUSION

Many of the obstacles hindering change program such as lack of a clear vision, poor planning, ineffective strategies, poor organizational culture, poor communication, inadequate resources, and employee resistance to change are linked to how effectively the change program is managed. There are often instances where resources and skills are or overestimated or underestimated.

For companies to have some kind of success from the change program it is crucial to have a team of leaders who are trained on change management. Change is inevitable; thus, it is important that everything is planned and calculated. The whole process must be communicated, and everyone needs to be involved and motivated to participate.INTRODUCTION

In today’s dynamic world, change has become a constant feature of the organizational life. However, the effectiveness of change management initiatives is frequently open to question.

From the perspective of organizational development, change is “a set of behavioural science-based theories, values, strategies, and techniques aimed at the planned change of the organizational work setting for the purpose of enhancing individual development and improving organizational performance, through the alteration of or organizational members’ on-the-job behaviours’ (Porras en Robberts).

Technology advancement, global competition, economic pressures, complex business environment, and the changing needs of customers, force managers to change their organizations’ structures and procedures to be competitive. Managers regularly apply organizational change programs such as restructuring, reengineering, downsizing, merger, acquisition, and total quality management to reduce operating costs, improve performance, and enhance efficiency.

There are several reasons why change models fail. Every transformation leaks value at various stages of the implementation process: some prioritized initiatives are never done, others are implemented but don’t achieve bottom-line impact, and still others may fail to sustain their initial good results. But at every stage of the process, good implementers retain more value than poor implementers (McKinsey).

A large European study found that the most successful organizations make mutually supportive changes in terms of changes in roles, governance structures and strategies (Ruigrok, Pettigrew and Whittington).

Susanto also states that what available data indicates is that there are so many cases of change/business transformation initiatives strongly deployed and unsustainable because of lack of organization readiness and lack of change governance and stakeholder management.

In this paper the 5 most common reasons why organizational changes in general fail will be reasoned by different sources.

5 REASONS OF ORGANIZATIONAL CHANGE FAILURE

There are not only 5 reasons why organizational change programs fail. There are reasons such as poor communication, difficulties with the company culture, underestimating complications during the initiative, insufficient progress measurement tools, employee training and so on. In this chapter the influence of; poor planning, inadequate support from leadership, lack of resources, priority focus and poor leadership skills on change management will be substantiated by various sources.

1. POOR PLANNING

Lack of planning and vague and unclear goals are often associated with failure. According to Talib, this is also the case for organizational change programs. Therefore, is poor planning one of the 5 major reasons why organizational changes fail. Inappropriate planning will reason the failure of the change management program as it is essential for staffing, determining policies, action plans and defining roles and obligations (Mosadeghrad and Ansarian).

The change program should be feasible. All managers and employees should agree and accept the change program plan and be dedicated to its execution (Land et al.). Leaders are frequently too focused on getting their solution designed that they dive right into the design phase of the organizational change without doing the required planning. But real strategic change requires not merely rearranging the established categories but inventing new ones (Mintzberg).

Another reason why planning is one of the failure reasons is because planning represents a calculating style of management and not a committing style. Leaders with both a committing and calculating style involve all employees in the planning journey. This results in an inevitable enthusiasm that get build along the way.

2. INADEQUATE SUPPORT FROM LEADERSHIP

Top management itself may display a lack of commitment to change due to numerous reasons. Their commitment is evident in several ways: their unambiguous acceptance of ownership and responsibility for success of the change initiative, eagerness to be involved, willingness to invest resources and to take tough decisions when required, awareness of the impact of their own behaviour, a consistent message, and the holding of regular reviews of progress (Gill).

Srinidhi states that the most critical difficulty to the change implementation is certainly lacking support from the top management. According to Hansson and Klefsjo, the involvement of top management is creating a sense of urgency. Low management commitment and involvement can result in failure in as many as 80% of firms (Jaehn).

The limited expertise and experience of organizational change programs become a large obstacle for top management’s inactive participation in the program. The ineffective communication between management and employees is a big part of the reason why low management is not as committed to the change program (Psychogios and Priporas).

Employees have seen so many change efforts stall due to lack of support that they have become sceptical and unwilling actively to support the change until a clear demonstration of support is made. All in all, the most successful change tactics were those in which members of the change target perceived early and continuing change agent support (Nutt).

3. LACK OF RESOURCES

Change requires in every situation cost, effort and time. It is argued that the lack of resources is another cause of the failure for the change programs (Mourier and Smith). Adoption and sustainment of change are long term investments. One cannot just implement a change whether that is within a subdivision or for the whole corporation. Allocating the necessitated resources are crucial and will lead to full benefits. A research conducted by IBM showed that the need to lead change is growing, but our ability to do is shrinking.

Lack of resources do not only mean financial and technology resources and tools but also human resources. Human resources need to have the right training which will create a higher productivity rate. This is usually under or overestimated during times of change depending on the organisation which creates conflicts.

It is necessary to understand the current state of the company. What resources are available for change, what resources will suffer and what other resources are needed; these are all questions one should analyse before the change is even introduced. Companies often underestimate their capacity, thinking that next to the total workload for running current operations there are enough resources to conduct change activities.

4. PRIORITY FOCUS

During organizational changes, it is important that not all the priority goes towards the change. In various sources it is mentioned how leaders often focus more on the system changes instead of focusing on people that will be dealing with the changes. Colan argues that sustained change is always driven by people. Even implementing new software successfully is more about the people who will use is, install it, train it, and support it than it is about the system itself (Colan). Change is all too often regarded as a ‘quick fix’. This fails to address the implications of the change for the organization as a whole and therefore causes unforeseen and unacceptable disruption. (Gill)

Lack of communication or inconsistent messages and the resulting misunderstanding of the aims and process of change lead to rumours that demoralize people and to a lack of commitment to change. Because every issue or problem within a given change initiative either gets prevented, solved, or caused by the skill of the change leaders in charge. Often there is a negative employee response to organizational changes due to the inconsistent communication between the employees and their leaders.

Oreg cites a number of studies that suggest that a key determinant of resistance to change is the extent to which potential change recipients perceive the change as personally beneficial or harmful.

According to a study conducted by McKinsey, the most important practices for successful change management are communicating clearly and establishing priorities. Respondents agreed that the organizations’ desired outcome for change management was 3.5 times likelier to succeed if the changes had been clearly communicated prior to its launch.

Hayes states that, all too often, managers fail to anticipate resistance because they only consider change from a rational resource allocation perspective and fail to appreciate that many organizational members are much more concerned about the impact it will have on them personally.

All things considered, it can be argued that the most difficult challenges facing leaders today are making sure that people in the organization can adjust to change and that leaders can foresee where the organization is currently placed in the market and where it should be in the future (Heifetz and Laurie)

5. POOR CHANGE LEADERSHIP SKILLS

One of the few reasons that guarantee a failed change initiative is ineffective leadership (Cummings and Worley). Goleman mentions in the Harvard Business Review that organizational change indeed requires effective leaders who are capable of applying different leadership methods in each situation. He argues that the role of a leader is to not only motivate and inspire the employees but also empower them to take and share the responsibility for the organizational change. In this manner they will be able to develop their skills during the change program and apply them to their jobs effectively and efficiently. Authors Pasternack and Viscio also highlight the weight of the right leaders during change management. Similarly, to Goleman, they state how the right leaders involve their employees in the program to ultimately overcome resistance and conflicts.

A study of 243 managers conducted by Hrebiniak that we in the processes of change implementation concluded that the foremost obstacle to the implementation of change is the lack of a manager’ ability to manage the change. These managers create more friction between the company and its employees whom are applying the organizational change (Hrebiniak). Comparably Longenecker states that the reasons for ineffective management can be insignificant selection of strategy methods and the lack of support from the upper management.

Unfortunately, we don’t train our leaders enough to become competent change leaders. Leadership development is a part of practically all large organizations but change leadership development is missing. The net is that leaders tend to run change initiatives like they run their organizations, and the two are vastly different.

Therefore, competent managers should be recruited to lead organizational change programs. They should be trained in change management theory and practice to be able to inspire employees to apply the changes and achieve organizational goals.

They must be active, consistently supporting the change teams as they design and implement changes. They must be out communicating the benefits of the change to stakeholders and listening to and responding to their concerns.

CONCLUSION

Many of the obstacles hindering change program such as lack of a clear vision, poor planning, ineffective strategies, poor organizational culture, poor communication, inadequate resources, and employee resistance to change are linked to how effectively the change program is managed. There are often instances where resources and skills are or overestimated or underestimated.

For companies to have some kind of success from the change program it is crucial to have a team of leaders who are trained on change management. Change is inevitable; thus, it is important that everything is planned and calculated. The whole process must be communicated, and everyone needs to be involved and motivated to participate.