Implementing Change at “Alpha Company”

The Situation

The Client Services Division of Alpha Company (a pseudonym) was in a tailspin less than a year after a major restructuring. Employee absenteeism and turnover had risen to unprecedented levels in a division that was noted for its productivity and stability.

Senior management sought help in turning employee morale around, and in assuring success of the change initiative. Initially, the request for assistance was framed in terms of employee training in change adjustment techniques. However, management was agreeable to an exploratory needs analysis to assure accurate problem diagnosis.

Background

Alpha had hired a firm of business process consultants to review its administrative systems and survey customer satisfaction levels. Redesign of the Client Services Division was one of several recommendations the consultants made. The recommendation involved merging the three division functions–billing, accounting, and records–into a single streamlined unit for “one-stop” counter and call service.

The consultants’ engagement was for evaluation and recommendation only. Alpha assumed responsibility for implementing proposed modifications.

Due to the highly technical nature of integrating three information systems, senior management selected the records manager, an information technology specialist, to direct the reorganized division. Formerly, each function had its own manager who reported directly to the vice president of operations. Within a few months, the former billing manager, a popular supervisor and long-time employee of the company, quit.

BPC was engaged to help ‘s management deal with unexpected consequences of their change program, specifically the departure of key talent, poor morale, and incomplete integration of information systems.

Our Impressions

Not surprisingly, interviews revealed that company members had very different perceptions and interpretations of the problems based on their position and job rank. Alpha’s upper management tended to view the morale and retention problems in terms of employee resistance to change.

By contrast, employees in the affected division cited poor implementation–not the reorganization itself–as the root problem. Their complaints focused on an unrealistic timetable, inadequate cross-training, and the new director’s lack of management skills. Furthermore, the director’s command-and-control style made it impossible for division employees to convey their concerns up the line without fear of reprisal.

Employees reported feeling de-skilled and unable to influence their work environment positively. There was a collective sense of loss associated with:

Job competence, as they struggled to cross-learn each other’s jobs while attempting to meet customer needs.

The unexpected departure of a popular manager. They viewed the new division manager as someone detached and unresponsive, and assumed that his demeanor reflected that of management in general.

Our Recommendations

Accelerated cross-training was essential both to the success of the “one-stop” customer service initiative and to improving employee morale. Management acted quickly in this area, and involved the affected workers in identifying exactly what needed to be done and how. These actions helped restore trust levels within Alpha, which had been badly eroded.

A second recommendation involved replacing the division manager. This proved to be a positive action all around, since the manager himself was relieved to return to the “back room” technical responsibilities he knew and enjoyed.

Obstacles to Peak Performance

Alpha’s difficulties in restructuring the division began with poor execution. Additionally, employee skills and traits were not aligned properly with the change initiative. The result was an invalidating work environment where employees felt unheard and unsupported by management.

Alpha succeeded in merging the three client service units without further loss of personnel. Additionally, by involving employees actively in the initiative, further improvements in information systems integration and customer service were achieved.

Concluding Observations

When organizational change initiatives are less than successful, it is all too easy to blame the difficulties on “resistance.” Employee resistance, customer resistance, management resistance, supplier resistance. Some group or person becomes the designated problem, and the inclination to “fix” the designated problem can be very strong. However, such an approach can be overly simplistic and counterproductive.

Change typically occurs within a system. It is important to appreciate the tendency for systems to maintain equilibrium. “Resistance” is better viewed as a normal–and predictable–response to disequilibrium. To maximize successful execution of change programs, careful attention needs to be paid to the transition phase, and to the natural responses that change can produce. Anticipating and managing these responses properly is integral to short and long-term success.

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About the Author

Susan Battley

An advisor to Fortune 100 executives and world-class institutions for more than twenty years, Dr. Susan Battley is an internationally recognized expert on CEO and leadership effectiveness. Her clients include Fortune 500 companies, professional service firms, and elite research institutions. She has worked with chief executives, university presidents, Nobel laureates, and prominent scientists, diplomats, and educators. A respected media source for analyzing leadership in the context of news-breaking events and key trends, Battley has been featured in outlets worldwide including CNN, CNBC, Fox, Bloomberg, and National Public Radio, and in The Wall Street Journal, The New York Times, The Washington Post, Chief Executive, Business Week, United Press International, Harvard Management Update, Entrepreneur, Science, Leader to Leader, Investments, and Worth. She is the founder and CEO of Battley Performance Consulting, a leadership strategy and organization effectiveness consultancy.