“As we approach the 21st Century the pace and scale of change demanded by the organisations and those who work within them are enormous. Global competition and the advent of the information age, where knowledge is the key resource, have thrown the world of work into disarray. Just as we had to shed the processes, skills and systems of the agricultural era to meet the demands of the industrial era, so we are now having to shed ways of working honed for the industrial era to take advantage of the opportunities offered by the information age. Organisations are attempting to recreate themselves and move from the traditional structure to a dynamic new model where people can contribute their creativity, energy and foresight in return for being nurtured, developed and enthused.” (Glensor, 2010)
It is evident today that organisations are trying to survive in an environment of unprecedented uncertainty and chaos, and nothing short of a management revolution will save them. Van Tonder (2006) argues that the subject of organisational change has received much attention largely because of the fact that more organisational change initiatives and or practices turn out to be unsuccessful; he reminds us of recent historical corporate events such as the demise of Barings Bank, Enron, and WorldCom where the very concept of “change gone wrong” bears testimony to the limited value of the available change knowledge.
Prior to the outbreak of Covid-19, three major trends were shaping change in Organisations: globalization, information technology, and managerial innovation.
- First, globalization is changing the markets and environments in which Organisations operate as well as the way they function. New governments, new leadership, new markets, and new countries are emerging and creating a new global economy with both opportunities and threats.
- Second, information technology is redefining the traditional business model by changing how work is performed, how knowledge is used, and how the cost of doing business is calculated. The way an organisation collects, stores, manipulates, uses, and transmits information can lower costs or increase the value and quality of products and services. Information technology, for example, is at the heart of emerging e-commerce strategies and organisations. Amazon.com, Yahoo!, and eBay are among the survivors of a busted dot-com bubble, Google has emerged as a major competitor to Microsoft, and the amount of business being conducted on the Internet is projected to grow at double-digit rates. Moreover, the underlying rate of innovation is not expected to decline. Electronic data interchange—a state-of-the-art technology application a few years ago—is now considered routine business practice. The ability to move information easily and inexpensively throughout and among organisations has fuelled the downsizing, delayering, and restructuring of firms.
- Third, managerial innovation has responded to the globalization and information technology trends and has accelerated their impact on organisations. New organisational forms, such as networks, strategic alliances, and virtual corporations, provide organisations with new ways of thinking about how to manufacture goods and deliver services. The strategic alliance, for example, has emerged as one of the indispensable tools in strategy implementation. In addition, change innovations, such as downsizing or reengineering, have radically reduced the size of organisations and increased their flexibility.
Managers, Organisational Development (OD) practitioners, and researchers argue that these forces not only are powerful but are interrelated to other factors which many organisations, public and private, large and small, encounter, namely political, economic and legislative influences on how businesses are operated and managed:
- social, demographic and cultural factors that shape internal management behaviours and thinking
- technological developments that may create opportunities (and threats) for managers and employees
- ethical trends and activities that influence employee attitudes and preferences (Cottor, 2019).
In addition to the above, the external realities also need to be considered. The following external drivers have an impact on organisations and the effect that they have on how people are managed in the organisation:
- economic and regulatory issues
- workforce demographics
- the international context
- national institutional and structural differences
- sectoral differences
- size differences
There is no question that these forces are profoundly affecting Organisations, and these came to the fore during the Covid-19 pandemic period as stark reality. Fortunately, a growing number of Organisations are undertaking the kinds of Organisational changes needed to survive and prosper in today’s environment. They are making themselves more streamlined and nimbler, more responsive to external demands, and more ecologically sustainable. They are involving employees in key decisions and paying for performance rather than for time. They are taking the initiative in innovating and managing change, rather than simply responding to what has already happened.
Organisational development plays a key role in helping organisations change them- selves by enabling how organisations assess themselves and their environments and revitalize and rebuild their strategies, structures, and processes. OD guides organisations to go beyond surface changes to transform the underlying assumptions and values governing their behaviours. In the words of Charles Cotter (2019), “At no other time has OD been more responsive and practically relevant to Organisations’ needs to operate effectively in a highly complex and changing world.
When planning to bring about change, the target is the whole organic system (not just parts of it) and its core capability to adapt and prosper. Creating an adaptive, learning organisation is a key capability for surviving in today’s fast-changing environment. An adaptive learning organisation consists of three interacting core components:
1) Purpose, including the principles or values of the organisation;
Successful organisations are driven by clear, inspiring and shared meaning as to its basic purpose, mission and values. The component of Purpose refers not only to written documents on vision, mission and core values which many companies post on their walls but more importantly to a shared mindset of every member of the organisation on its strategic directions. Processes are the execution enablers translating the strategic directions towards sustained and consistent results. The third core component, People, is the key to making the two components work. The power of the people component lies on the quality and commitment of employees of the firm, energized by its leadership and people policies.
In order to change the whole, the parts must be aligned and moving in the same direction as well. Brown’s approach as illustrated below, follows a similar logic to the three P’s approach, where the focus is on not only changing or aligning the strategy to the external and internal environment, but very importantly aligning the people and technology as well.
Integrating these approaches in a way that invites commitment and embeds these changes into the overall competence of the organisation is the challenge of the OD practice. Organisational readiness to change is similar to Lewin’s unfreezing concept (Cummings, Bridgman, & Brown, 2016) which is a “process by which organisational members’ beliefs and attitudes about a pending change are altered so that members perceive the change as both necessary and likely to be successful. As Lewin pointed out, unfreezing is necessary to prepare the organisation and its members for the change initiative, therefore, creating organisational readiness for change is a critical initial step in the change process Indicators of the adoption of change programs include leader and staff perceptions of problems at the beginning of change and their attitudes toward it. Member buy-in to the change process is critical as attitudes toward change impact the efficacy of OD interventions.
The reason is that resistance to change is a common reaction and this resistance must be overcome in order to achieve any change. The lack of organisational readiness can be a precursor to resistance to change and, therefore, it is critical to understand employee perceptions of organisational readiness both to comprehend and prevent resistance to change and as a step-in successful implementation of change.
The creation of organisational readiness to change, then, is a necessary component of the unfreezing process. Only after organisational readiness to change is established, will the change program have an opportunity to be successful. The question is how to create this readiness to change. Richards (2004) refers to Rashford and Coghlan (1994) who stated that effective unfreezing requires three elements: disconfirmation of the present state of organisational functioning (or dissatisfaction with the status quo), a need to arouse anxiety to levels that are sufficient to motivate people toward new behaviour, and the provision of support and direction to help members change attitudes and behaviour.
Others emphasize the first element, a need to create cognitive dissonance between the present and desired state of the organisation, or dissatisfaction with the way things are done in the early stages of change so that organisational members are not satisfied with what they know, which will cause discomfort and provide a motivation to learn new behaviours or approaches. It has been proven that a primary mechanism for creating readiness is creating dissatisfaction with the status quo. The change agents must sell a message to members that illustrates the discrepancy between the present and desired states of the organisation as well as bolster the collective efficacy for change. In fact, a study conducted showed that proactive, frank discussions about the need for readiness to change were necessary to help change the attitudes and behaviours of organisational members. Employees must understand the need for change within the organisation and the consequences for continuing to do business in the normal way before dissatisfaction will arise. Otherwise, organisational members will have no incentive for expending energy and risking personal loss in changing the way they accomplish their work.
All of these strategies to create readiness for change point to a program that presents members with information regarding how the current functioning of the organisation is not achieving its maximum, the logic and rationale for the change, why and how this change will result in improved functioning, discussions as to the benefits to groups and individuals within the organisation (and consequently, how their personal risks will be rewarded) and the need for being prepared to deal with the changes. In fact, there is empirical support that shows after employees have been trained and shown how the change effort will impact them, they demonstrated more understanding and support for the change effort.
In turn, this increases the chances that subsequent change efforts will be successful because it leads to improved self-efficacy among members, and thus make expectancy of success at later stages more likely. Further, when efforts were made to clarify specific goals regarding the change efforts, employees exhibited more positive attitudes, which led to conclude that goal clarity may be one key to creating organisational readiness to change.
In addition to the above characteristics, experiencing a sense of urgency is also useful to creating organisational readiness and would have differing effects on change conditions, as well as the nature of the readiness program.
Predicting the future has become irrelevant in a rapidly changing and chaotic environment. Instead, pre-paring the organisation to be able to adapt and respond to unpredictable and random events is the key to survival and sustainable growth. Preparing the organisation for an uncertain future entail making decisions today for consequences of unforeseeable events. Organisations, therefore, need to be constantly self-transforming, even to the extent of creating new rules for effectiveness and success.
How ready is your organisation, its employees, its processes, its values to change and adapt to our upside-down world? How ready are you?
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Dr Cornel Malan BA (Political Science) Advanced Diploma (Labour Law) B-Hons (Public Administration) MPA (Public Administration) PhD (Public Governance and Management) Dr Cornel Malan has 30 years’ experience in both the public and private sector in policy and process design, human resource management, statistical research, strategic planning and corporate governance. Cornel specialises in transformation, strategy and organisational design and restructuring as well as business rescue projects. As such she has been involved in SLP, BBBEE and other organisational alignment projects in the military, mining and public entity environment. Dr Malan has been responsible for ground-breaking work in several research projects, has been instrumental in establishing academic relationships with various leading universities. She holds a PhD (D Litt) in Public Management and Governance from the University of Johannesburg, as well as other qualifications in Labour Law, Political Science and Public Administration. Cornel is a qualified SAP HR consultant and has additional training in education technology & design, OD, mentoring and coaching and leadership. She was registered as a General HR practitioner by the SA Board for People Practitioners (SABPP) in 2010 and served on the Women In Mining Board for the period 2011 to 2014. Cornel also serves as a Board member for the OLDN. At present, Dr Malan is a part-time lecturer at the University of Pretoria Engineering Faculty (EBIT) as well in the UP Faculty for Economics and Management Services. In addition, she has been appointed in 2017 as Associate Lecturer on the Railway Operations Management suite of programmes delivered as a partnership with Transnet Freight Rail, University of Johannesburg and Glasgow Caledonian University (GCU) School for Work Based Education. In 2019, Dr Malan was appointed as an external supervisor on the Vega Schools Master of Arts in Creative Brand Leadership (MACBL). During 2020 Cornel has been appointed as Associate researcher by the UJ department of Supply Chain and Logistics Management. In addition, UNISA (Public Administration Department) confirmed her appointment as supervisor for a PhD and 2 x master’s degree students. Previously, Dr Malan was a supervisor at GIBS for DBA students, specifically with a focus on equity and transformation as well as an MBA supervisor an NMU. More recently, Cornel has been facilitating several international Strategic HR-and related courses to students from across Africa. Courses include Strategic HR, Training and Learning, HR Auditing, Organisational design & restructuring, mentoring and coaching, Multi-generational Talent Management and HR Risk Management. Cornel has been involved in the design and facilitation of customer-focused training solutions at institutions across South Africa. Dr Malan has prepared and presented various research papers at various local and international conferences regarding mining, leadership, railway safety and more recently, on HR Management.