Change Management

Ayushi Garg from MBA II HR explains how successful adaptation to change is as crucial within an organization as it is in the natural world and how business needs to establish coping mechanisms for responding to change.

 

 

“It is not the strongest species that survives, nor the most intelligent, it is the one most adaptable to change.”

                                                                – Charles Darwin.

In today’s world there are constant changes in technology, market conditions, customer demands, input costs and the policies for any business to cope with to keep with the competition. Depending on the extent of adaptability of the business to change, the business may or may not survive the cut-throat competition. Adapting to and managing change provides a competitive advantage, allowing organisations to quickly and effectively implement change to meet market needs.

But what if change is not managed effectively? The organisation’s productivity may decline, valued employees may leave the organisation, existing employees’ morale may deteriorate, projects may go over budget or may be unable to meet deadlines. Employees may find alternatives to the new working methods or may go back to the old ways. A divide can be created between the organisation and the employees.

Research has shown that effective application of change management increases the success rate of organisational changes by as much as 96%. Change management basically applies a structured framework of methods, tools and processes to achieve the gap created by change between the actual level and the desired level. It has at least three different aspects, including adapting to change, controlling change and effecting change. The scale of the change does not matter; what matters is how effectively an organisation applies the change management, thereby increasing the chance of staying on schedule and budget, and resulting in higher benefit realisation and return on investment. Thus, leading corporations, government organisations, institutions and non-profit organisations are adopting change management in today’s ever-changing business world.

Change Management as a discipline began to emerge in the 1980s and early adopters such as GE, Ford, and AT&T were very large corporations that could derive significant savings through more efficiently implementing new programs. During the 1990s, industries undergoing significant and rapid change in areas such as information technology and human resources began highlighting the benefits of Change Management programs on a broader scale. The experiences, consequences, and costs of implementing change without a structured approach has helped employees and organisations embrace Change Management tools. The 2000’s marked a widespread acceptance of Change Management as a business competency for leading change.

Change management entails thoughtful planning and sensitive implementation and, above all, consultation with and involvement of the people affected by the changes. If you force change on people, problems inevitably arise. Changes such as new structures, policies, targets, acquisitions, disposals, re-locations, etc., all create new systems and environments, which need to be explained to people as early as possible, so that people’s involvement in validating and refining the changes themselves can be obtained.Change must be realistic, achievable and measurable. These aspects are especially relevant to managing personal change. Furthermore, before proposing changes, it is important that leaders ask for the opinions and reactions of their subordinates to the proposals, to make the changes beneficial to all of the members of a particular corporation or organisation. Two examples follow:

Tata Motors marked the biggest turnarounds in the history of Indian automobile manufacturing industry in 2001. This success story of Tata Motors can be entirely attributed to the timely change adopted by the Tatas and the then M.D Ravi Kant, who led the initiative.

Tata Motors was predominantly a manufacturer of commercial vehicles, and that is a very cyclical business. The commercial-vehicle market in India shrank by more than 40 percent. The 5 billion rupee loss in 2001 was the first time something on this scale had happened in the company’s history, and it really shook everybody within the organisation. They tried to understand what had gone wrong and wanted to create a path for the future to ensure that they never got into such a situation again. So in 2001 they decided on a recovery strategy that had three distinct phases, each of which was intended to last for around two years—six years in all. Phase one: costs had to be reduced in a big way, and that was going to be a huge challenge for a company that was not only the market leader but had been used to operating in a seller’s market and employing a cost-plus approach to pricing. Phase two: consolidating their position in India. Phase three: venturing outside India and expand operations internationally.

Historically, Kodak was built on a culture of innovation and change. They had people who led change. One key to avoiding complacency is to ensure these innovators have a voice with enough volume to be heard (and listened to) at the top. It’s these voices that can continue to keep a sense of urgency in your organisation. If they are given the power to lead, they will continue to innovate, maintain a culture of urgency and affect change. As Kodak became more successful, complacency grew, leaders listened less to these voices, which made complacency grow some more. It can be a vicious cycle. When Kodak did move into the digital world, it was too little, too late. 

Terry Paulson believes “It’s easiest to ride a horse in the direction it is going.” Changes come our way and we need to adapt to them even though it may not be the easiest way!

SIBM Pune

Prerna Toshniwal is a student at SIBM Pune and is currently pursuing her MBA in Innovation and Entrepreneurship. She is passionate about education & environment in India and wishes to contribute her bit to the same. She is also a graphologist and enjoys analysing handwritings of families and friends in her free time. She is a Junior team member in the Social, Entrepreneurship and Consulting Cell, SIBM Pune.

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