Change Management is important for any business transformation like new technology implementation, merger or acquisition. A common framework breaks down change management into three stages: Freeze, Change, and Unfreeze. This paper explains the concept of change management and relate it to the concepts in general systems theory. The case study on an organization is based on my experiences while implementing the change management. This case study is my understanding and analysis of the respective organization as a system of people, process and technology. This analysis will help students and change management consultants to broaden their view and correlate the general systems theory for effective change management.
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Whenever we have a business transformation within an organization, it impacts the process, the people and technology (Larkin, 2003). Change Management emphasis on the people side of change. Mc Kinsey and Company recently surveyed 1546 business executives from around the world, asking them if they consider their change program ‘completely/mostly’ successfully: Only 30 percent agreed (Isem, Joseph and Pung, 2006). The change management approach for an organization was based on three stages: Freeze, Change, Unfreeze (Nickols, 2007). The key to the success of a change initiative is to access the previous changes and implementing the change by learning’s from previous experiences and by avoiding repeating errors. To analyze the organizations readiness for a change we interact with the people who are responsible and are part of this change.
In this paper we will discuss how the steps followed in change management to implement a change are also explained by Bertalanffy in General Systems Theory. We will discuss my experiences to access organizations readiness for change and correlate them with General Systems Theory. Systems Theory would enhance the understanding of an organization that would help to implement an effective change management.
II. Theoretical Background:
Change Management in Organizations. “The first and foremost definition of change management refers to the making of changes in a planned and managed or systematic fashion” (Nickols, 2007). A change within an organization could be a business transformation like implementation of new technology, merger or acquisition, layoffs etc. These changes not only affect the process and technology of an organization but also the people affected by this change. A business process transformation impacts the process, people and the technology (Larkin, 2003). Change management concentrates on the people side of change. Change Management is a process through which an organization can achieve its objective. In a conventional approach the various steps through this journey may be delineated but change management facilities to align these steps in a systematic manner to achieve success. It has not been determined whether change management is an art, science, a profession or a discipline. It is more likely composed of a little of each and a totally separate entity in itself (Ledez, 2008). It is a process through which we can predict the success of a change initiative by assessing the readiness of the organization towards
change and then implement strategies to achieve the transition from the present scenario to the final transformation. Another definition of change management refers to the efforts it takes to manage people through the emotional ups and downs that inevitably occur when the organization is undergoing massive change (Sieber, Nah, 1999). With the increase in competition and technology it is necessary for an organization to initiate business transformation. The most crucial stage in the change management methodology is ‘Freeze’. As a change management consultant my focus was based on assessing the organizations readiness for change. To analyze the organizations readiness for change, we assess the change history, cultural conduciveness of the organization and the overall perception of the senior management towards this change initiative.
Systems Theory and Systems Thinking. Systems Integrity is one of the underlying concepts of systems theory emphasizes on understanding the intricacies of a system before making any changes to it. A system becomes more complex with the advancement of technology. As the systems become more complex it is imperative to understand the system as a whole and the interactions within the system. Systems theory focuses on the relationships between parts and the properties of a whole, rather than reducing a whole to its parts and studying their individual properties (Ackoff, 1971). A system is defined as “an entity which maintains its existence through mutual interactions of its parts” (Bertalanffy, 1976). The interactions within a system occur due to its hierarchical order. The different sub-systems within a system have a particular role to play within a larger system of which it is a part (Sanford, 2004). The underlying structure of which is a nested hierarchy of increasing orders of complexity (Sanford, 2004). Ackoff believes that a systems theory concept approach is fundamental to the study of organizations, so he translated von Bertalanffy’s original definition of a system to organizational context (Chun, Song, Arling, Granados, 2008). A system is composed of subsystems that interact with each other. At any given time, a system or its subsystems exhibits a state, defined as its current properties or characteristics (Chun, Song, Arling, Granados, 2008). A change in the state of a system is called an event (Chun, Song, Arling, Granados, 2008). In simple terms, an event is any observable occurrence. The behavior of a system can be regarded as an event. Behaviors are events that initiate other events(Chun, Song, Arling, Granados, 2008). For example, providing incentives to the employees is a behavior that will cause another event to motivate the employees. A process is a sequence of behaviors within a system that can lead to reach its final goal (Chun, Song, Arling, Granados, 2008). This is also related to the concept of equifinality.
‘Equifinality is an idea that suggests that in an open system a similar result may be achieved in many different ways’ (Cumming, Worley, 2005). Any system that interacts with the external environment is an open system. The open systems interact with the sub-systems within or external environment through feedback mechanism. The final goal or objective of a system can be achieved by the various subsystems in an open system through different ways, paths or procedures. This concept of an open system is called Equifinality.
Towards a Systems Theory approach in Change Management. The backbone of change management is composed of a variety of hard and soft sciences drawn upon psychology, sociology, business administration, economics, industrial engineering, systems engineering (Nickols, 2007). It is imperative to study the long term cultural and behavioral patterns of a system to analyze the scope of change within that system. Change Management theory includes a series of models, beliefs, concepts and principles known as General Systems Theory (Nickols, 2007). The concepts of systems theory enhances the effectiveness of change management in an organization. We will now describe the research methodology and the case study of the company where I implemented change management. Let’s call that company as LSD (hypothetical name).
III. RESEARCH METHODOLOGY: CASE STUDY
The organization as a whole can be considered as a system with various departments within the organizations acting as subsystems interacting among each other and the outside world. The people within an organization are the integral part of this system. Change is also a psychological even and any organizational change may involve some real and perceived threat of personal loss for the people involved. This event may lead to the resistant behavior by the people involved in the change initiative. The success of a change program can be brought about by appropriate connections of many activities related to human behavior. Change management in all about predicting the future. To analyze and predict the success of a change initiative within an organization we need to assess the long term patters or history and behaviors of events within the organization. Current State Assessment consisting of evaluation the change history and assessing the Cultural Conduciveness for the change will provide suggestions how to manage the change within the organization. Organizational readiness assessment will help LSD to determine how prepared they are for the future. Current State Assessment and Organization Readiness Assessment were based on the following inputs- (1) Discussions/ Interviews with the top management, (2) Dialogue with the Core Team i.e. people working on the new technology, (3) Workshops and Questionnaire administration among the key stakeholders i.e. people who are either affected by the change program or can have an impact on the successful implementation of the change program, (4) Workshops and Questionnaire administered to the Core Team , (5) Questionnaires administered among the larger work force across all the offices in the country.
Workshops were conducted to sensitize the stakeholders about the importance of the change initiative (ERP implementation) prior to the questionnaire administration. In all 90 responses were collected from all the departments and offices across the country. Also a variety of designations ranging from C-Level executive to lower staff , were covered to gain a comprehensive understanding of LSD’s Change History , Culture and Organizational Readiness.
IV. CHANGE MANAGEMENT AT LSD
LSD is one of the leading government organizations in the power and energy sector. The organization has around twenty three offices across the country with four head offices in metropolitan cities. With the growth and expansion in the last twenty years the company is deciding to switch from the paper-work procedure to ERP implementation. This implantation will streamline and shorten their business processes to cope with the industry standards and competition. I was part of this change management team that facilitated this challenging transformation. Out team included four third-party change management consultants and ten change agents across the organization. These change agents were the employees who were influential within LSD.
Applying Systems Theory to Change Management at LSD. We will now correlate the methodologies used by us in change management with the concepts in systems theory and systems thinking. The approach we used to implement this change included both the quantitative analysis (i.e. by administering questionnaire and analyzing the scores) and qualitative analysis (i.e. by conducting interviews and workshops with the employees). In the change readiness assessment we included the survey from all the employees across the country that would be part of this change program. All these employees are part of the whole change management system and relates to the concept that the focuses on the relationship between parts and the properties of a whole (Ackoff, 1971).
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Change History Assessment. We assess the history of the previous changes within the organization to understand the system better before altering it. The analysis of previous history data will provide us with the previous trends, patterns or behavior of the system. This helps a change management consultant to predict the system better in case of any future changes and manage the system accordingly. The parameters used in the change history assessment are:-
Stakeholder Identification and Commitment – It is imperative for us to include all the people as a subsystem to interact within the system as a whole.
Resistance Analysis and Management – The change from one event to another may cause some change in behavior. When we consider the people as part of a system, changes in human behavior is also predominant. Resistance analysis is to gauge the human behavior within our system.
Benefits Identification and Management – This is one of the parameters that play a very important role in a balancing process. The change management approach is a goal-seeking process that tends to reach the equifinality. The various departments and the people across the organization work together to reach the final change. The resistance from the employees may imbalance the system and diverge it to reach the final goal. Benefits Identification and management is a balancing act to make the resistant employees realize the benefits for them from this change initiative. This will lead the whole system to balance and reach the objective.
Communication effectiveness – This is also an important variable in any change management process. As the organizations become more complex and large the effectiveness of communication is a challenge. The more effective is the communication, the more aware and supportive the employees are.
We can also explain this balancing process through the diagram below:
Culture is something that is difficult to define accurately, but everyone knows when they sense it. The pattern in the culture helps a change consultant to sense the mindset of the organization. The culture of the organization was assessed on the basis of the following parameters like trust , team work, openness , interpersonal learning , respect for the individuals , organizational support , rewards and recognition. After realizing the problem areas from previous history assessment, we had interviews with the stakeholders to understand the story of the problem. These interviews provided very useful information on the viewpoints of the employees with respect to this change initiative and their perspective on the culture of the organization. This helps the change management consultant to be a part of the system and sensitize to the structure of the organization. The key findings of my project were:
The culture for rewards and recognition was less prominent and didn’t motivated employees to be enthusiastic about any developments within the organization.
The lower level employees felt alienated by the senior level executives. The communication and trust between the senior and lower management was missing. This lead to dissatisfaction among the lower level and they never took in the organization activities.
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