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Change Management

Role of the CEO in Change Management

A change initiative involves a concerted, consistent effort at various levels. The Top Management and Board of Directors are as important to the process as is the change agent, the sponsors, the steering committee and the people at large.

The various key roles in an organizational change process include the following:

The Initiator of Change

Organisations often understand the need for change only when they’ve been stung by some deep loss. The loss could be in terms of a dipping sales figure, the departure of key people, a fall in the market share or the loss of an important client to a competitor etc. Often, a change is initiated when someone within the organization reacts to such events and signals the need for a change.

The Change Agent

The change agent is one who is responsible for driving and implementing change across the organisation. The change agent can either be an external consultant or an internal consultant. In fact, at different stages in the change process, different individuals or teams may come to occupy this role. For instance, if change management task is outsourced to an external consultant, he serves as the initial change agent. However, when the project team starts actual work on the recommendations of the consultant, the team leaders become the change agents. Basically, change agents at various stages push change by reinforcing the need to change, and championing the cause of change.

The Official Sponsor Team

Usually, the organisation will identify a team or a department to officially coordinate the change process. In larger organisations, the sponsors may be the HR Department or the IT department. In smaller organisations, a team of senior leaders can play this role.

Finally, while change efforts are undertaken at the ground level, they need to be steered by the top management. The role of the top management is paramount in ensuring that the initiative does not lose focus or get stranded due to operational or motivational issues.

The role of top management

Change can either “make or break” an organisation. Change never takes care of itself. Change is initially difficult but ultimately stabilizes. These are the three basic facts of an organizational change.

Although after an initial denial phase, people will finally adapt to change, the transition phase is difficult. And this is where Top Management can help. As we saw, change is initiated by one deeply affected by some crisis in the organisation and carried forward by agents and sponsors. However, the success of the change efforts ultimately rests in the hands of top management. Depending upon the structure of the organisation, the work is delegated to different levels of employee participation depending upon the complexities involved. Thus, the Board of Directors may supervise the CEO, the CEO supervises the Executive Assistants, who in turn delegate work to the middle management, until it trickles down to the entry level supervisors.

The Top Management is instrumental, rather vital in setting the mood for change. Not only does it play a key role in communicating the vision and the concomitant goals, it also plays a major part in objectively setting targets and defining results to accomplish the change. People are most deeply influenced by the actions of their supervisors. Hence, leaders themselves need to imbibe the expected behavior that the change warrants, so as to ensure that they induce such behavior in others.

Top Management Teams can reinforce the agenda for change by using their power positions or external links, even pushing it through the media, but ultimately, actual progress comes only in collaboration with workers. Again, it is important for top management to generate a sense of collective responsibility. A key to inculcating this attitude lies in genuinely valuing workers and their role in the whole process. There can be nothing more motivating than to know that your labors are acknowledged and appreciated by the company. Adopting a culture that cuts across the hierarchy and treats all people as equals, giving organisational goals priority over personal goals etc. are all perceived as symbolic acts to signify the need for change and the value that is assigned to it. Thus, a lot lies within the capacity of the top management in terms of sending out the correct signals that will propel change.

Off late, I noticed that a certain brand of shampoo, has its product (read: the bottle) carry the signature and a small picture of the hair expert they collaborated with to create the product. What are they doing? In my view, they are trying to increase the credibility of the product, so that more people come to trust the brand. Similarly, “selling” a change to your people requires what I term “credibility management”. And that is a major responsibility of the Top Management Team. The top management not only needs to communicate the vision for change, but also needs to tie the vision to business needs and show how the change will impact profits, productivity or quality of work life. Equally important is the management’s ability to realistically address the existing gap between the current situation and the envisioned situation, and present to the people a powerful, reasonable and well planned strategy – a blueprint for success. Next, driving speedy implementation is extremely important. Once people are convinced of the strategy, the top management needs to quickly put them to “act” upon it. The faster your strategies are put to action, the earlier they are likely to succeed. It’s like a “buzzer-round-quiz-game”, the faster you hit the buzzer, the more your chances of winning. On the other hand, you may well know the perfect answer, but if you don’t hit the buzzer on time, it really doesn’t work! Even with a perfect strategy, immediate action becomes the buzzword. With every success you move closer to your vision and increase your credibility, so eventually people will volunteer to follow you.

Another important observation is that during organizational change, resistance from people is directly proportional to the perceived threat from change. Change challenges the status quo and demands that people venture out of their comfort zones. It means abandoning the “way things are done” and embracing a new set of potentially better conditions. But despite the potential benefits of change, it is always initially abominable. It comes with fears of a job loss, a change in role, a change in reporting, and so on and so forth till people are so consumed with anxiety and doubt that they have little left to think of it constructively. To maximize benefits from change, top management must minimize the perceived threats from change. Many times a lot of the apprehensions may actually be baseless, hence addressing them at the top level means credibly putting unwarranted fears to rest, thereby averting precious loss due to stress and mental anxiety.

So, we spoke of the top management’s responsibility in vision sharing, developing collective responsibility, managing credibility, erasing out meaningless apprehensions, setting goals, defining targets and leading by example, but there’s still something we haven’t spoken about. Listen, because this is important….

Now consider: How fast did you dismiss the last four words in the preceding paragraph, expecting to stumble upon a great management secret in the next?

Doused expectations apart, the simplest fact that the top management needs to understand about communicating change is that it is IMPORTANT to LISTEN. Just like most of us would miss the message in those four words, hoping for something greater to follow, the management often skips attention to employee concerns, preferring to advocate rather than to listen. Often, employee concerns can raise relevant issues, which need inclusion in your change Management Plan. Top Management Teams need to take care, that communication between them and the organisation is held as interactive sessions, rather than imposing one-way talks. Do not rush to explain how great the change is going to be or offer examples of how people survived earlier changes and how they were expected to do the same again. Rather, acknowledge that change is difficult and that every concern is worthy of attention. Be firm on the agenda, but sensitive to the concerns. From there, the secret of effective communication lies in attentive listening, for only when you listen can you respond appropriately. Only when you respond appropriately can you address your people’s concerns effectively, and only by doing that can you minimize perceived threats from change, and maximize productive efforts towards change. So, take time out, listen and attend to the employees’ individual, special needs or issues, while handling change.

Rather than advocating that a certain “new system of working” is better than the “old system of working”, Top Management could try the “thesis-antithesis-synthesis” method to communicate change. “Thesis-Antithesis-Synthesis” is a philosophy, commonly associated with the 19th-century German thinker, G.W.F. Hegel, who contended that historical evolution is the outcome of conflicting opposites. Simply put, a thesis is a statement. Antithesis is the counter statement. Obviously the thesis and the antithesis are contradictory or opposed to each other. The synthesis implies resolving this conflict by offering a solution at a higher level, by combining the positive elements of both the thesis and the antithesis. The synthesis then forms a new thesis, which, in time, encounters an antithesis, and is resolved at the next higher level through another synthesis. This philosophy is often used to explain Hegel’s dialectic on the process of historical evolution.

How can it be applied to organizational change? In our context, let us take the current situation as the thesis. So, the new system or the ideal situation is the antithesis. Now, if you try to impose that the new system is better than the old because of a, b, c, d, e reasons, you pose a challenge that is most likely to be resisted. No one wants to think that they are operating in a sham system, which is no longer capable of working. Instead, try striking a “synthesis” between the current and the ideal situation. Communicate the positives in the current system and the desirables from the ideal system. Suggest that the change will bring about a synthesis between the two, for better functioning. This way, you promote the change, without devaluing the current way of working. Psychologically, this has a positive impact on the way people react to the idea of change.

Moving ahead, the top management needs also ensure that work processes, performance systems, training programs, job descriptions etc. that form or support the framework within which employees work, are aligned to the change objective and complement each other.

While, in general, change calls upon identifying the different business units involved and delegating work to them, through able team leaders, the top management needs to chart out a macro plan. Having identified the tasks involved in achieving change and the time frame available to complete those tasks, top management must map a critical path of all tasks, wherein they have a clear picture of which task has to be completed by when, which task follows which, and how are different task areas tied to each other. This helps achieve synchronization of work efforts, without which the desired change can never be achieved. From there, the team leaders can take on the responsibility of guiding their respective teams to achieve the set targets within the defined time to accomplish change.

Various studies in the area have shown that it is a better approach for top management to work its way through the existing culture than trying to change it, all of a sudden. This can be done through a shared vision and a buy-in of managers operating at the lower levels of hierarchy. Generating interest among them and the employees they supervise means pulling in precious energy for your project. For, the real work needed to implement your plans happens here. Once they are committed to their roles in achieving Change, the project can pick up considerable speed. However, while the management adopts such an employee-oriented approach, it must also ensure that those not committed to their roles be mentored or shown the door.

Research has shown that many companies, for instance, Navistar International Corporation, who spectacularly accomplished change, did so, not by engaging external consultants, but by having their top management study the organisational context, company history, standard operating procedures and then building improvement teams to drive change wherever required. Thus, these results sufficiently testify to the importance of the Top Management Teams’ role in handling organizational change.

Managing change successfully – How can CEOs achieve this?

In a survey conducted by the American Productivity and Quality Centre, researchers indicated that since change is almost always met by resistance, there arises the need for a champion to drive change across the organisation. Further, the more powerful and visible the champion is, the more successful the change project tends to be. In this direction, the researchers concluded that the leader of the organisation, most often the CEO is often the most effective communicator of the vision and the necessity of change across the organisation. In fact, change projects in most of the best practice organisations were found to be spearheaded, planned and managed by the CEO of the Company. Often, it is not enough for the CEO to just communicate the vision to the workforce. In order to ensure that vision successfully translates into reality, the CEO must also play a major role in planning and implementing the change process. The active involvement of the CEO in the project underlines the significance of the same, thus ensuring organisation-wide support and commitment.

The CEO perspective Often times, change is viewed as an objectively measurable output. It could be a surge in sales figures, a new business unit or a process reengineering. However, what some CEO’s may miss is the transition phase. Till the output becomes visible and operating, the impression could be that the change effort has been unsuccessful or worst not achieved. Fact is the transition phase, which precedes the phase where change results become visible is not only the toughest phase but is also the phase where the maximum change effort is required. This is a time, when people are adapting to the new situation, adjusting themselves into newfound responsibilities, and sometimes operating both old and new systems simultaneously. While this phase may not show any visible output, this is the phase where the maximum change is actually taking place. The CEO needs to empathize with his employees during this phase rather than worry about the observable result. The only hurdle that they may face is there are no limits to how long a transition phase will last before the change finally sets in and becomes visible.

Another hurdle for the CEO is to effectively handle pressure situations, wherein the Board may want to see how the change has affected a return on investment too soon. This disregards the fact that a change is always gradual and can eventually lead to a regression.

A third challenge, which is quite inconspicuous, is that the CEO often runs a shorter transition cycle than the middle management, and hence is actually not as “connected” to the middle management as he may feel. The reason is that, for him, the change is often signified by the accomplishment of a strategic objective, whereas for the middle management, the actual change impact sets in after the objective has been achieved and a new set of circumstances established. For it is the middle management that has to deal with this change on a daily basis, slowly regularising the change to make it a part of the system. That requires time. Hence, a longer transition phase. This disconnect, between the CEO and the middle management in a change scenario, can pose a challenge to the CEO.

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