Navigating Change and Risks for Business Continuity

(The author is a Professor of Management and Economics, formerly at IIBM (RBI) Guwahati. He can be contacted at m.bibhas@gmail.com)

Dr. Boidurjo Rick Mukhopadhyay

(The author, international award-winning development and management economist, formerly a Gold Medalist in Economics at Gauhati University)

Organizational change can be perceived as a set of deliberate activities that move an organization from its present state to a desired future state. Having the ability to drive and adapt to change management is also an essential skill of managers. When organizations introduce change, it may be a reaction to competitive pressures, globalisation, domestic and global financial markets, economic shocks, changing workforce demographics in the market, disruptive innovation, and also changes in industry standards, technology, legislative changes, internal needs amongst others. A study by Wall Street Journal shows that only one out of three organizational changes go through successfully and more than 45% of employees of organizations shared that the change subsequently led to achieving better performance and work efficiency.

One of the common sources of problem with employees is that organizational lists all the positive features of a change, and somehow ignore the other side of change that are often picked up by employees - particularly the effect of a change at the operational level and on work culture. Despite the pressure that is triggered within the organization when the change process is initiated, a successful change reduces a lot of stress and negative consequences over an unsuccessful stage that does not go through. So, it is important that there is a good engagement process and the right selection of people and processes, this would then drive the change and push the organization towards the future while "renewing an organization's direction, structure, and capabilities to serve the ever-changing needs of external and internal customers", as opined by Moran and Brightman. It is important to have employees on board and to realize to agree on the need and urgency of the change. Firstly, it is them who would drive and deploy the change, and secondly, to reduce chances and pressure of employee resistance to change.

Organizations pride themselves on having skilled and effective leaders who understands the change management process. According to Kotter, change is always underpinned by a vision that must be imaginable, desirable, feasible, focused, flexible and communicable. Providing a clear direction for change is easier said than done, and this brings out the effectiveness of leaders to share the vision with followers. Demonstrating the right leadership styles and traits, having the ability to make quick decisions, staying up-to-date with technological updates, having the right dynamics between the superior and subordinates, an ability to negotiate and persuade followers for the support on change.

Generally, managers tend to be quite reactive and defensive when employees put forward their concerns, ideas, or objections around the change. Having frequent conversations with the employees and to establish that the dialogues are coming from a place of trust goes a long way. Negotiation and influence play a big role in this period. Personal appeals and empathy in certain situations and conversations help in shaping such conversations that should be productive.

A) Characteristics when firms go through change

An organizational change leads to a number of different outcomes at various levels. While leaders can work on developing a positive view of proposed change, or ensuring the employees have a mindset of openness to change, it is harder to secure a change commitment and unrealistic to expect a lack of resistance. While there are studies that evidence professionals with a high need for achievement may perceive change as an opportunity, on the other hand, those who have a strong need for stability tend to resist changes as that jeopardizes their current levels of assumptions, familiar routines that have become rituals, and environmental understanding.

One might argue that organizations could consider making a series of incremental changes rather than a big one at one point in time to reduce risks of resistance and prolonged amount of time spent on persuading the stakeholders. Having said that, the nature of response and need for a change depends on the severity of the problems or factors that an organisation is facing in a particular period. e.g., if it is a financial factor that leads to firms going for mergers and acquisition, it may happen rather quickly, in contrast, if it is a systemic challenge that an organisation has identified and want to address, changes are introduced in steps because the solution also has to be systemic.

If innovation is your business, then change and risk is your business. Managing innovation is not rocket science, particular because (and less understood also) it requires knowledge and expertise which are significantly different to standard management attributes and skillsets that are designed to help organizations stay stable, and be typically risk-averse. Studies show that effective innovation teams are composed of typically diverse backgrounds who are critical and analytical, besides the skillsets they also have access to the right networks that enable them to stay updated with new development in their field.

And the firms that succeed in securing such teams usually offer a structured environment and an ability to make the most of the creative talent in a safe and supportive workspace where clear performance goals exist. Fundamentally, therefore, it is important for both the innovation agent and the innovation facilitator to learn how to build a bigger box/ knowledge container than going with the poorly defined cliché'think outside the box'. Building these big 'boxes' – comprising of experience, skills, networks, and also academic knowledge – are safehouses and harder to build than said. It is important to have a team where one can nourish another, and restrain from developing 100 ideas that cannot ever be implemented; instead, work towards 'less is more' and on doable ones.

B) Don't lose your culture during change

The culture of an organization goes through several shocks when innovative organizations, like any other business, go through mergers and acquisitions, restructuring, redundancies, expansion into new markets and industries. This is a time when senior leaders of firms are more invested in these strategic initiatives with little time to oversee the progress and outcome of innovation progress happening within the organisation. At the same time, due to the consequent uncertain and unstable times at the organisation, there may be HR and key players leaving the firm exploring opportunities elsewhere. This creates severe delays for existing and ongoing innovation projects.

Besides the delay that could affect a firms' both internal and external stakeholders, it also calls for new resources to hire new talent that may not be immediately available or suitable. Reorganisation of firms is an interesting and critical time for everybody involved and the future of business, but equally important is retaining key resources (human in this context, amongst others). The choice of market is also important. For example, if one is in BRICs and in the tech industry, for example, the stiff competition for talent makes it non-feasible at times to secure the right person and also find ways they stay with the organisation long enough to develop loyalty and a sense of belonging.

It is a collective exercise involving senior leaders, project managers, innovation team leaders, and the change agents to be able to share and reflect on the collective vision and goals. Managers need to clarify whether the said innovation in context is meant for sustaining the competitive position of the firm or to provide certain value addition to targeted groups. If the concept is defined too narrowly, executives often dismiss the ideas. However, if it has a long-term orientation with continuous value addition while also finding new sources of value, executives would be interested in knowing more about the process, offer the flexibility to allow innovation managers to recruit their teams, manage them, and most importantly execute the plans.

C) What managers need in order to sail through change

The role of managers is sailing through and managing change is key, and it takes time and commitment to know who the team members are rather than what they can do or deliver. Skills that change agents need to have, though not an exhaustive list, are creativity, problem-solving and continuous improvement skills, developing attitudes and behaviours that are needed to frame and solve problems, and generate new ideas on a continual basis. Additionally, risk-assessment and risk-taking skills, the mindset to manage these well has to be solidified over time. A set of research from Harvard Business School shows that the most creative executives fall under 'discovery skills': 1) Associating, 2) Questioning, 3) Observing, 4) Experimenting, and 5) Networking.

Cut to credits, there are linkages between the amount of time dedicated to change management, innovation, provision of constructive and systematic feedback, and importantly - revenue growth. Change management in a structured, supportive, and intellectually stimulating workplace under a strong leadership benefits most and can manifest systematically. It also requires clear communication on measurement of success and sharing the results from time to time. Change takes time and therefore, the parameters used to measure and capture it have to be customised and designed in context.