The Nature Of Corporate Change
You may not know that in 1998 Michael Beer and Nitin Nohria, held a conference in order to explore the nature of corporate change. The conclusions were compiled into a text entitled, Breaking the Code of Change (Beer and Nohria, 2000) with the intent of addressing their thesis that the two primary approaches to change management should be more integrated if corporations wanted to improve their chance of success in delivering business transformation. In their theory any change approach with a primary focus on economic value was termed Theory “E”, while Theory “O” described those approaches harnessing organisational capability. In short, some firms are very top down while others are very bottom up in their approach.
The relevance of their enquiry still carries significant value today. In a recent IBM study of over 1000 CEOs, the conclusion was that successful organisations view change as
“a normal state in which values and goals provide alignment and leadership inspire and challenge, rather than stabilise and control”.
This study highlighted the importance of leadership and stakeholder engagement in managing complex business transformation. It also highlighted that the majority of CEOs felt change management would be the biggest issue they face in the next few years and yet, they lacked adequate capability to manage this.
This shortfall in capability is an issue for many organisations. Indeed, in this, the 15th year of the Standish “Chaos” report (2009), it is sobering to reflect that on average businesses deliver only 32% of the projects they start. This shortfall represents a great opportunity for organisations to approach change in different way. To learn from the experience of those who have gone through similar challenges, innovate and adapt their approach according to their specific context, capabilities and controls. For example, the challenges that arise in a distressed company may include managing financial, operations and organisational shortfall. In a scenario where low performance has existed for some time, there may be entrenched cultural barriers and high stress levels. Partisan or dysfunctional behavior is not unusual in these situations but, left unchecked it can take deep roots in the organisation. It is not just distressed businesses that require turnaround capability. Sometimes the acquisition of a new business within a portfolio requires similar Buy Generic Viagra Online skills and competencies.
Designing a New Code for Change. Business transformation consultancy has not yet reached the era of alien led invasion yet and but it is also clear that a business cannot be adequately served by a “one size fits all” approach to change or programme management. Today, the issue is not so much about cracking the code of change (as espoused by Beer and Norah, 2000), than writing a new “code” to help manage change through unprecedented economic times. Picking up this challenge over the last few years and based on our experience working with clients, we (Haldane LLP) have developed a framework for navigating change, whether it is focused on value realisation after a merger or, turning around companies struggling to improve performance. This framework (the 4C model Link to Designing a new code for Change, Haldane LLP, White Paper 2009, (Haldane whitepapers) suggests that the key consideration in managing change is ensuring the approach taken is based upon the maturity, complexity and environment a specific business faces. The framework considers an approach to change in 3 key areas:-
Context Management: Aligning strategy, managing stakeholders and prioritising between competing interests are all crucial in beginning the journey towards better business performance.
Capability Management:. Strategy is delivered effectively when the right people are involved and they are prepared to collaborate and flex their approach. Reliance upon methodology over experience, or upon structure over substance, leads to monitoring of procedures rather than outcomes, and this is not a good outcome for any organisation.
Control Management: Control is necessary to govern responses to feedback and ensure resources are managed to a plan. Change management requires governance of emergent requirements, resource deployment and goal-focused activity.
How is your change initiative going? What lessons have you learnt? Is methodology the B all and End all or not? Look our for our 3 part series on Designing and new code for change.