Our world is being impacted by the technological revolution which ignites an environment of constant change. The technological revolution these days is gaining pace. The famous law of Moore’s used to say: “The number of cells in the microcircuits doubles every year”. Later it has been observed as not corresponding to reality therefore now it sounds different – “The productivity of computer processes in one year time will double by about one and a half, and there is a firm chance that the development will be even faster”. As we all understand, we are living in the time of great change when competition is increasing, new technological competitors are emerging and the business environment is constantly changing. Having integrated all the circumstances as a whole, we notice that flexibility, fast and accurate strategy formation and decision making are becoming more important than ever. All links in the corporate structure must be maximally effective and adapted for rapid and accurate response to constant changing environment and be ready to form new strategies. The old, inefficient business management model, when it was all about slow strategy thinking, where new technologies and new business management norms were viewed as financial pitfalls, is gradually shrinking. If there are segments still present up to this point, which could ignore the reality and adapt to new standards slowly or not adapt at all, I think now we have really reached the breaking point, where changes starting from this moment will gain pace rapidly, and will inevitably require quick reactions.
We have reached the point here, where we all need to stop and start thinking, whether we are ready and will we be able to survive and thrive in these times of change? What homework do we need to do? We need to figure out our weaknesses and better understand where we are strong and perform improvements if needed. This self-assessment must be carried out regardless of size and capabilities for small, medium and large (blue chip) companies, and in the latter case they are often not flexible enough and react slowly to change. In this article, I would like to discuss the main elements of the organization from which changes begin, namely: company executives, team, adaptive to change management style and the company`s culture as a whole.
Main reasons preventing the implementation of change management culture
As I have mentioned before, changes start with top managers and are moving down the hierarchical structure. In most cases, the resistance comes from the top and middle managers, as they have put lots of effort in building up their current position, and it is very difficult for them to understand that they have been moving in the wrong direction and that it is time to pivot now in sake for the future success of the company. That is why in most cases it is very difficult to initiate the reforms or they are being delayed. Often closed management structure, when decisions are made by senior and mid-managers, excluding involvement of the rest of the employees, serve as the reason for the unsuccessful implement of change culture, therefore various oppositions arise and there may be even some attempts to sabotage new ideas inside the company’s structure. Ordinary members of the team can also serve as a threat for successful change implementation due to lack of information they look at changes as a direct threat and are trying by all possible means to avoid moving along with this new wave. Finally, the last reason is the lack of competence in a few or in all structural chains when the managers do not understand the general market conjuncture or there is a lack of deeper insight which helps to understand which path to choose. And, of course, the worst scenario is when the whole team lacks needed competence.
Summing up the mains obstacles, it is obvious that they arise due to two main reasons: the lack of competence and due to behavioural heuristics which prevents from critical points identification and later on interrupts successive strategy implementation and planning.
Organizational scheme leading towards effective change management
There are a lot of components which lead to success in change management. If you avoid implementing all of them, you will meet failure. Nevertheless, changes begin with the top manager, but the main components are company’s inner culture and management style. If your culture is not designed to accept changes, then you will either fail to accomplish your goals or they will be implemented slower. Without implementation of change culture, even the best managers in the world will not be able to save you. Bellow I am providing the scheme for successful change implementation. As you can see, the company`s culture and management style are in the centre, all other relative chains are equally important and connected with each other. An important thing here is the flow of information. The communication in the organization and its structure need to move from up to the bottom and from bottom up. For every new initiative proper reflection time needs to be spent. Furthermore, each part of the chain must put maximum effort for the identification of a problem and an opportunity, and all possible solutions and ideas must be translated to all links.
We have already agreed that all parts from above scheme are equally valuable therefore we will shortly talk about each of them.
Company’s culture and management style
This is the core for everything if talking generally about the success of the company, future perspectives and the ability to implement changes in a fast and effective way. Managers need to involve all employees in the management processes. Furthermore, clear procedures must be created for all operational processes. Teams must trust the management and be motivated, in such case it will be easier to explain the importance of the required changes and they will be implemented more effectively. Company`s DNA must be transparent, clear and understandable. All employees need to know how to execute each situation, understand what is required from them and understand both the motivational and disciplinarian systems. It is very important to forget about closure, secret conversations behind doors and hypocrisy, as the market and new generation of employees (they are completely different from the previous ones) require transparency. On the one hand, employees need to have plenty of room to work and an opportunity to speak freely. On the other hand, control and accountability must be ensured, but it must be clear and understandable. Furthermore, it must be non-authoritative.
Open-minded executives are needed for successful change implementation for whom their ego would not be in the first place, because in most cases they will need to put goals first and forget about themselves. I am not a supporter of a single leadership style as I think each style can find its niche in different places and fields, but for change management, if talking about today’s trends, the best style is an open-democratic one, based on deep knowledge about latest management doctrines and the newest technologies. Furthermore, deep market knowledge and feeling in which company is operating is needed. For the above mentioned managers it is easier to initiate needed changes, they are adored and most importantly, they are trusted by the employees. In addition, executives need to complement company`s DNA with the new components and links which would serve as a binding structure and would invite all employees to change and to complement each other in order to evolve together with the company.
They are like a mirror of the top-level executives. They need to have all above mentioned qualities and, of course, they need to compliment the corporate culture and the management style. According to my deep conviction, they are the key players when talking about change management. That is why they must become more involved in the company’s management by arranging meetings, by effectively communicating with employers and by receiving all needed answers from them. Furthermore, they need to understand the company’s business model from all angles and they need to put more of their own effort in the management processes. The main tasks required from them are effective management of the inner communication and the ability to take fast decisions, even the hard ones, like dismissing the employees who are too slow for the company.
In most cases, they are the most undervalued link in the company’s structure but nevertheless, they are the ones who spread a high morale and optimism in the company. Moreover, they are responsible for the proper execution, for gathering the information and its delivery up and down the string. It is very important for them to believe in the need for reforms and ignite this believe to all workers. They are the main innovators, responsible for the execution and implementation of new ideas.
They have valuable information and insights. Unfortunately, in most cases no one pays attention to it. This might happen due to lots of management issues, but major problems are related to closed management style when employees if not asked are afraid to say loud what they think or they are not motivated enough for their open mindedness. This link is especially important if the company needs to implement open management style which is best for change management, as they are the first ones who see the new product or service, they know real issues and they are best at knowing how to solve them. That is why it is important for managers to motivate and involve them into management processes, so they would feel free to speak about their ideas and solutions and would be active participants in the innovation process.
In conclusion, once again I would like to draw your attention by saying that I am sure that times, when it was enough to establish a company, make a 3-5 year plan and execute it slowly, are over. We do not have this type of luxury any more. We all will have to pay more attention to deep understanding of our business environment, we will need to evaluate all tendencies which are moving industries in which we operate and change or adapt business model accordingly. There will be even more changes and uncertainties in the future. According to this new tendency, we need to model business model and teach our personnel to work and win in such environment already today. The main postulates for effective change management are openness, transparency and innovations. By above I mean: open for changes mind, open and transparent company’s culture and management style, free flow of information inside the company and multi-level employees involvement in the company’s management processes. Moreover, it does not matter what your company is doing, your operations and execution need to be the base of innovation. It is important to understand that when the amount of information is huge, innovations are being developed fast and the business environment changes rapidly, closed culture and management styles will lose because in today’s world small and fragmented teams are less efficient compared to small or huge united and flexible teams. Finally, it is important to understand that when one door closes, it is very important to be the first one to find the new door and be the first one to take advantage of this new situation.