By Kudray, Lisa M.; Kleiner, Brian H.
Industrial Management , Vol. 39, No. 3
Managing change is one of the most difficult challenges that business organizations face today. Change is everywhere, it is inevitable, and dealing successfully with it is critical to an organization's success.
Change management is defined as the continuous process of aligning an organization with its marketplace-and doing it more responsively and effectively than competitors. For an organization to be aligned, the key management leversstrategy, operations, culture, and rewardmust be synchronized continuously. Since change is an inevitable, ongoing process, these management levers must be constantly altered also.
Managing change includes identifying the destabilizing forces, determining your alignment in the market, electing the appropriate methods to use, creating the most effective change strategy, and applying them with the most accurate maneuvers. Managers, including managers of change, need to remember that they are changing, manipulating, and rearranging a variety of both human and non-human elements. Because change must be done thoughtfully and carefully, the preparation of a specific change management process can instruct an organization in the proper execution of change.
How change begins-external and internal sources
In preparation for change, an organization must identify the source of the destabilizing force (i.e., the change "trigger") as external or internal. Ask yourself whether the destabilizing force originates from outside or inside the organization.
Change can be stimulated by three specific sources external to the organization. These sources are:
* Society-Beliefs, values, attitudes, opinions, and lifestyles shift in society. For example, companies are geared toward making yearly, seasonal, or monthly changes in products or packaging to meet what they interpret as society's everchanging desires and preferences.
* Political/legal environment-Government's swing between conservative and liberal policies can serve as a potent source for change.
* Technological developments-Improved communications or transportation can force an organization to change with waves of the future. For example, IBM was destabilized because it stayed with massive mainframes at a time when technology was allowing construction of smaller computers with the same processing power.
There are also three important internal sources of change:
* Membership in professional associations-Through membership, a company can gain knowledge from professionals outside the organization and apply it internally
* New organizational goals-When new goals are established, previous goals must be changed to meet the new standards.
* Excess organizational resourcesThese can foster additional changes within the organization. For example, if a company is operating smoothly and successfully, managers often have more time on their hands to search for new ideas to use in business practices. Change at PQ Corp., was driven by its evolution from a small specialty chemical company to a $400 million multiproduct company in 20 years. Although internal and external sources are divided, they can work together also. Wayne Smith, former chief executive at Airco, says his company's changes "resulted principally from a desire to get more out of a very large retail network in its merchant gases operation, which had been sharply expanded by 23 acquisitions."
Regardless of where the trigger comes from, it must be recognized as a potential destabilizing agent. If an organization chooses to ignore the destabilizing force, setbacks such as loss of sales or customers, impairment of existing products, and reduced pricing and margins can occur. Proof of destabilization is usually recognized when the company begins to suffer and is forced to assess its alignment in the market.
To recognize the impact of change triggers early, every organization should have change agents. …