Checklist for organizational change
One of the most famous theorists of organizational change is John Kotter, of Harvard University. Last year he published “A Sense of Urgency”, which is reviewed here in the Financial Times.The review quotes from this new book:
“Change is shifting from episodic to continuous. With episodic change, the challenge of creating a sufficient sense of urgency comes in occasional spurts. With continuous change, creating and sustaining a sufficient sense of urgency are always a necessity.”
This is true. But the key word is sufficient. What does that mean? How can you be sure that you don’t create an organizational climate where people run around like headless chickens? When do you need urgency and when do you not need urgency? How long can something be said to be urgent before people become indifferent? Are there degrees of urgency?
Managers always need to think carefully before applying gurus’ ideas to their own organization. Urgency in one department is not the same as urgency in another department. This week’s urgency is not the same as last week’s. The urgency for a particular organizational change can itself change, and so on ……
Only 41% of organizational changes are successful
41% of changes are successful? At least that is what IBM says. How do they know? They carried out a major survey of 1500 change leaders and produced a report, which you can get here.
Among the highlights:
Most CEOs consider themselves and their organizations to be executing change poorly
Achieving project success does not hinge primarily on technology – instead, success depends largely on people.
Nothing new there, really. But IBM then say
Four common factors helped these practitioners address their greatest project challenges and when used in combination, they provide a synergistic benefit that was even greater than the sum of their individual impacts.
So what are the four factors? According to IBM they are
- Real Insights, Real Actions. Strive for a full, realistic awareness and understanding of the upcoming challenges and complexities, then follow with actions to address them.
- Solid Methods, Solid Benefits. Use a systematic approach to change is focused on outcomes and closely aligned with formal project management methodology.
- Better Skills, Better Change. Leverage resources appropriately to demonstrate top management
sponsorship, assign dedicated change managers and empower employees to enact change. - Right Investment, Right Impact. Allocate the right amount for change management by understanding which types of investments can offer the best returns, in terms of greater project success.
Again, not much new. But remember – successful change management does not ignore the basics.
Negotiation and Organizational Change
When things are changing at work, everyone involved in the change needs to be able to deal with a new situation.
During a change process, it’s important that employees do not simply accept what they are told, but question the change. A good change manager should always be open for suggestions.
Then when the change manager and staff deal with each other and discuss these suggestions, they need to be able to come to an agreement. By doing this, they increase the chances of a successful organizational change.
And this is where negotiation is important. There is no space here for me to go into detail, but here is a link to a test from Edinburgh University Business School that will help you determine your negotiation style.
Good change managers are good negotiators – fact!
Communicating and change management
‘Facetime’, ‘fokussieren’ and many more…
It’s normal that each area of life has its own specific terms. The Financial Times Deutschland collected some of the words and phrases that are less meaningful than others. They are the kind of words that you can use in meetings if you want to sound as if you know what you are talking about.
But beware – these particular words and phrases are empty of meaning!
More seriously, it has been shown that managers who rely too much on buzzwords like these are less well regarded than people who use clear and concise language.
It’s not only what you say, it’s the way you say it.
Change in the Pharma Industry
One of the most interesting industries that I have been involved with is the pharmaceutical industry. It is constantly evolving in the face of internal and external challenges which are described below. If you were the head of a pharma firm, how would you deal with these problems?
Three major issues that confront the industry: the rise of generic products, the difficulty in finding new treatments, and the large amount of spending on sales and marketing.
The first challenge is that in most countries, a drug company has a 17 to 20 year period when its product is protected by patent. However, this period does not start when the drug comes on the market, because patents are filed during the research phase. On average, a patented drug is on the market for around 12 years before the patent expires and generic competition arrives. Once the drugs have come off patent, their market share and price premium are significantly reduced, because the generic alternative is less expensive.
Second, there is a general feeling that all the ‘low hanging fruit’ of disease have been picked. The industry relies on blockbusters, which are drugs that bring in annual revenues of $1 billion or more. Evidence suggests that it is getting increasingly difficult – and more expensive – for companies to find new treatments. This has led to a significant change in the basic approach to research. Companies are moving from chemistry-based therapies to biology-based therapies, but since the major pharmaceutical companies tend to lack expertise in this area, they are either buying or forming partnerships with either smaller, more specialised outfits or are forming partnerships with larger drug companies.
The third challenge for all major pharmaceutical companies is that they spend a great deal on sales and marketing. Pharmaceutical companies position themselves as research-oriented organizations. In fact, the actual amount that they spend on research and development is less than the amount they spend on sales and marketing.
Good questions for organizational change management
“What kind of employees do you want? What kind of organisation do you want?”
These questions are posed in an FT book review that you can read here. No matter how you answer them, you need to do some organizational change to have the kind of organization you want.
But before you decide, here’s a tip — speak to the employees first. They will tell you what organizational change is needed.
