Nine Reasons Organizations Need To Change
Overcoming resistance to changes is often one of the biggest challenges for continuous improvement practitioners. In the first of a 4-part series on managing change in the enterprise, Dr. Robert Swaim looks at the reasons organizations change and breaks change down in 6 key areas of impact.
Why Organizations Change
Organizations change for a number of different reasons, so they can either react to these reasons or be ahead of them. These reasons include:
- Crisis: Obviously September 11 is the most dramatic example of a crisis which caused countless organizations, and even industries such as airlines and travel, to change. The recent financial crisis obviously created many changes in the financial services industry as organizations attempted to survive.
- Performance Gaps: The organization's goals and objectives are not being met or other organizational needs are not being satisfied. Changes are required to close these gaps.
- New Technology: Identification of new technology and more efficient and economical methods to perform work.
- Identification of Opportunities: Opportunities are identified in the market place that the organization needs to pursue in order to increase its competitiveness.
- Reaction to Internal & External Pressure: Management and employees, particularly those in organized unions often exert pressure for change. External pressures come from many areas, including customers, competition, changing government regulations, shareholders, financial markets, and other factors in the organization's external environment.
- Mergers & Acquisitions: Mergers and acquisitions create change in a number of areas often negatively impacting employees when two organizations are merged and employees in duel functions are made redundant.
- Change for the Sake of Change: Often times an organization will appoint a new CEO. In order to prove to the board he is doing something, he will make changes just for their own sake.
- Sounds Good: Another reason organizations may institute certain changes is that other organizations are doing so (such as the old quality circles and re-engineering fads). It sounds good, so the organization tries it.
- Planned Abandonment: Changes as a result of abandoning declining products, markets, or subsidiaries and allocating resources to innovation and new opportunities.
What Organizations Can Change
What organizations can change fall into the following broad areas:
- Mission, Vision, & Strategy: Organizations should continually ask themselves, "What is our business and what should it be?" Answers to these questions can lead to changes in the organization's mission (the purpose of its business), its vision for the future (what the organization should look like), and its competitive strategy.
- Technology: Organizations can change their technology (for example the way they produce whatever they sell) in order to increase efficiency and lower costs.
- Human-Behavioral Changes: Training can be provided to managers and employees to provide new knowledge and skills, or people can be replaced or downsized. As result of the recent financial crisis, many organizations downsized creating massive unemployment that continues to this day.
- Task-Job Design: The way work is performed in the organization can be changed with new procedures and methods for performing work.
- Organizational Structure: Organizations can change the way they are structured in order to be more responsive to their external environment. Again to be more responsive to the marketplace, this also includes where decisions should be made in the organization (centralized or decentralized).
- Organizational Culture: Entities can attempt to change their culture, including management and leadership styles, values and beliefs. Of all the things organizations can change, this is by far the most difficult to undertake.
These are the major elements that organizations can change. It is important to note that changes in one of these elements will usually have an impact on another element. As an example, changing technology may require changes in the human-behavioral area (new knowledge and skills on how to use the technology).
Part II of this 4-part change management series, "Why People Aren’t As Afraid of Change As You Think", will be published on Monday August 8.
Robert W. Swaim
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