Some Challenges of Change

Resistance to change among top executives during a change may come because someone has his or her own agenda, it may be a fear of change, it may be due to a fear of loss such as the loss of one’s job, or of losing power.  Another challenge is the client’s experience with previous changes, particularly if the experience was a negative one. Resistance to change can be put into three general categories. These categories are technical, holding onto the status quo, especially if a lot of money is involved having reached that status quo and efforts to maintain it; political, the loss of power; and cultural, the desire to stick to current systems and procedures.

This resistance can set up barriers to change within organizations hindering and in some cases crippling forward movement and the efforts to improve operations, productivity and profitability. These pockets or even individual efforts at resistance, regardless of the resister’s level within the organization, can negatively affect other stakeholders.

What might the effects of change be on other key stakeholders when one or more key stakeholders have not completely accepted the OD’s recommended intervention and are not fully participating? Depending on the nature of the reaction of a stakeholder, other key stakeholders may find conducting even day-to-day business difficult.  For example if one stakeholder adheres to the status quo, it can produce the effect on other stakeholders of maintaining a short-term mindset with no focus on future customers, forgetting to analyze potential future threats and a failure to build new competencies for the future.  The stakeholders that insist on maintaining current systems and procedures affect other key stakeholders by making wrong assumptions leading to less than stellar results and that in turn produces defensiveness.

In addition, what about those members who work for the stakeholders? What effect do change initiatives and the lack of support by their own supervisors have on them? Of course, those that report to stakeholders have no control in the decision of whether or not to introduce change within the organization where they work. For these employees, there are three critical elements to consider, perception, the impact of the change, and response to the change. In terms of perception, an employee perceives a change in terms of what it means to him or her.  If the ones initiating the change do not provide sufficient information, then perceptions can encompass a wide spectrum of meanings including fear of job loss.  Another element to perception is the degree of control that this group may or may not have over the change.  For example, will the change affect the way the employee performs the job? The third and last element to perception is the degree of trust employees have in the members mandating the change. These members are either the executive team, the manager or both.

The next critical item is the impact of the change.  Employees will form an assessment of the change and this assessment can run along a spectrum from negative to positive or any point in between.  Looking at perception, if there is a lack of control, a lack of information, and a low trust level, the assessment of the change is likely to be a negative one. Stakeholders, especially managers, are often better at creating anxiety than they are at creating a level of psychological safety for their employees during change.

A case in point is a change a recent client implemented. The client’s business has been growing and the board decided it was time to hire a CFO.  The new position was communicated. However, the CFO’s position description was also circulated containing several duties of three key people. One of these key people is not located in the main office. Imagine the thoughts racing through this manager’s mind when upon reading the position description, she read several of her own job duties! Others, even less connected to the executive board, knowing that the current CEO typically performs the duties of a  CFO wondered if the current CEO was leaving. The rumor mill was greased, off and running.

The third critical element is response to the change.  This component too has a range running from actively involved and positive to open rebellion.  The other critical factors play a part in this as well.  An absence of information, for example facilitates a lack of involvement, creates uncertainty, increases hesitation, fuels resistance and, as in the case above, can foster panic.

Lastly, what effect does this resistance have on the overall success of the intervention? A case in point is the purchase of Compushop, a small computer sales firm, by Bell Atlantic.  Bell Atlantic wanted to accomplish three changes to which Compushop had strong resistance. First Compushop controlled its own finances.  Bell Atlantic wanted all financials done in a uniform manner according to the Bell Atlantic procedures already in place.  Compushop’s computers could not accommodate the software to accomplish this.  Secondly, Compushop employed few females and minorities, while Bell Atlantic’s policy had its focus on diversity.  Lastly, Compushop and Bell Atlantic held widely differing views on paying sales commissions.  Compushop felt a loss of control, a lack of trust developed, and survival anxiety set in as described above.  The acquisition failed and Bell Atlantic divested Compushop.

What does it take to address this issue?

In reality, the knowledge of contingencies as they apply to organizational change are scarce.  However, there are broad contingencies that can be addressed.

If the organization is not ready for change, there can be disastrous results.  Before the change takes place it is best to know if those affected are dissatisfied with the status quo, if the organization has the resources to support the change, and if there will be commitment for the change.  When this information is in place using surveys and interviews, for example, interventions can then be designed around the needs of the organization. Consultants must be able to lead the change, be able to garner support for the change especially from key stakeholders, and be able to sustain the change as it moves forward. Therefore, the consultant plays a key role in the success of change initiatives.  Secondly, the organization must have the infrastructure in place to sustain the change.  There must be facilities and personnel in place to handle each intervention.  Finally, if the organization has had no experience with change, then information about change, how it affects people, process, and profits must be delivered throughout the organization.

Cultural sensitivity must be addressed before any interventions are designed.  Interventions that work in one part of the company’s facilities might not work in another.  This cultural consideration could be New York and the China facility, or the Mississippi and Oregon offices, or even an office as close as Atlanta, and Macon

The capabilities of the change agent can be a call for collaboration not only with the client but also when the change agent lacks skills necessary for a particularly change.  If an OD consultant lacks skills for a particular change project, he or she can collaborate with another OD consultant who does have those skills.  If an OD consultant tries to bluff his or her way into a project, the organization will lose its direction and the OD consultant will lose his or her credibility.