21. Positioning change management

1.                 What does change & risk management entail for you? Please clarify with an example

Risk management means assessing the current risks within an enterprise in a systematic way and trying to control them or compensate for them appropriately (by "hedging" eg when it comes to exchange rate risks or risks related to raw material prices) or limit them when entering into new commitments such as investments, contracts, etc.

Change management is about the careful handling of changes that management considers desirable in an organization, and that are therefore part of the organization development policy.

Both concepts have no more to do with each other as the art of baking bread with the art of taking care of burn wounds. If the first goes wrong, the second may become relevant. But there is no sensible person who links the two disciplines together in a structural way.

2.                 What is change management not?

Change management is therefore not about estimating the consequences that changes in the environment could have for the organization. This analysis is part of a SWOT analysis that is necessary in the context of strategy development. The abbreviation stands for “Strengths and Weaknesses, Opportunities and Threats”. The threats that one sees -for example the possibility of deflation with its consequences for pricing and the return on investments- are a basis for making strategic decisions. This exercise has nothing to do with change management.

3.                 Can you give an example of a sector where there is currently a high demand for change managers?

In the sector of hospitals and care institutions, the 'soft’ sector in general, there is currently a major movement towards "tilting" organizations. This implies that a structure is introduced that is no longer based on the traditional specialization criteria, but attempts to draw up a process-oriented structure. In departments based on specialization, people are clustered because they do the same type of work. This creates a sales department, customer service, logistics, administration, R&D, software development ... .We are increasingly suffering the disadvantages of this organizational structure that is designed to create order. Such a structure is only appropriate if the activities of an organization are mainly physical (production) and very repetitive. As soon as processes have to be organized that have more to do with services, and certainly with caring, cooperation between the various disciplines and the need for a flexible focus on the real problem becomes so necessary that the needed specialists cannot sit in different departments anymore. They should be in multidisciplinary, process-oriented teams with a large operational autonomy. The transition from a vertical to a horizontal structure is an intensive change process that has a major impact on job content, powers, knowledge development, leadership, cooperation, decision-making ... 

Implementing these changes successfully, so that the desired increase in efficiency and quality becomes reality, that is change management. It is a methodology to modernize organizations, and adapt them to new challenges.

4.                 How do managers identify “change risks” ?

It has to do with estimating the consequences that a failed change could have. For this, one must systematically ask 'what if ' for any uncertainty involved in the change process. Food for academics; a pitfall for managers!

5.                 What are the most common problems in change management?

Some crucial problem areas in change management are:

a)       The management that is aware of the need for change, develops a solution and then 'sells' it to those involved. Managers are often so naive to think that clear communication is enough to get acceptance from those involved. It must be clear that without a ‘sense of urgency’ in the minds of those involved, there is no ‘pull’ to help realize the change. Creating a "burning platform" is a bad method, because panic is a bad counselor!

b)       Managers try to organize participation by setting up workgroups to work on a specific topic. They do not realize that the people who are not in a workgroup are not exposed to the logic of change, and are therefore 'attacked' in a later phase with a solution that is ready. This goes back to the sales process mentioned before. The consequence is that the ‘price’ (disadvantages) of the solution is often considered too high by those involved, and the product (solution) is not attractive.

c)       In meetings, an attempt is made to establish a dialogue about difficult choices. Opinions differ and soon a feeling of chaos and immobility arises. The manager often finds it necessary to ‘cut the knot’' and does not always realize that there is no ‘rope’ (commitment) anymore. People disconnect if someone makes all the decisions for them. There is, however, a methodology for making decisions in a group that pays attention both to the quality of the decision and to the attitude: sociocratic decision making.

d)      Radical changes such as structure tilting, the introduction of integrated IT systems, setting up self-managing teams, etc. demand compatibility with the culture in the organization. What a culture cannot tolerate will not survive. People often overlook that evidence and only focus on the rational content and aspects of the desired change. The result can be predicted: failure. Resistance arises in the team that is involved; That resistance is answered with more pressure, and the resistance thereby increases again. The project is finally cancelled, or it is kept alive artificially. This means that it does exist formally, but people do not support it. They only do what is necessary to stay out of trouble. Numerous (expensive) control systems are set up to keep the pressure high, and in the end the sought-after benefits of the change are lost in the increased costs to keep the project alive.

e)       Changes are announced by management as necessary, but it is not realized that employees do not understand the strategic lines of thinking that fit those changes. Organizations still treat strategy too much as a 'top secret ' affair. If the crew does not know where the boat is going, it will of course be difficult to understand and accept the announced maneuvers are necessary.

In short, our current management reality is still based too much on a leadership of obedience; thinking and doing are housed in different heads and different functions. This legacy from Taylorism appears to be extremely difficult to let go. This leads to an approach to change that increases uncertainty, arouses resistance, and makes organizations even more sterile then they already were. Change management is also necessary here to change the paradigm of an organization. Healthy organizations are not focused on keeping everything under control, but on developing a dynamic in a direction that makes sense strategically.

We live in fascinating times!

Hugo Der Kinderen (Nov. 2017)