CHANGE MANAGEMENT ROLES IN REORGANIZATION

13 May 2011 Leave a Comment

by rahmawatibagaslokardatika in article

This article is my assignment for Knowledge and Innovation course.

Some supporting materials were taken from several source (below)

Futurulog Dr Alvin Toffler in his book The Adaptive Corporation said that “ Change is not merely necessary for life, it is life”. In today’s competitive world, nobody or no organization is resistance with change because there are only two option, change or die. Change management is is not simply a collection of processes and tools applied by a change manager or a change management team. Change management is the implementation of processes and tools that are applied by key players in the organization

As we know in 2009, one of Indonesia’s state-owned company, PT Telkom Indonesia held their transformation launched at October 23rd 2010. Transformation in PT Telkom is a must to be exsit in Telecommunication industry. In Product and Company life cycle, Telkom already reach mature phase and thats mean Telkom need something new to make them keep growing and able to expand their business and fight to win the competition. Competition in Telecommunication business is no jokes, the competition is severe.

 In its cycle of life, PT Telkom had been gone through several transformation process, but today’s trasformation is the most radical in PT Telkom history. The transformation is including 4 company basic aspects; business transformation, insfrastructure, system and operation model, and also human resource transformation.

 Telkom’s CEO, Rinaldi Firmansyah, said that “ Telkom new business portofolio is in line with our new positioning, which is Life confident with new tagline ‘The World in Your Hand’. Telkom transform from separate providers into single providers”.

Since 153 years ago until today, PT Telkom is very dynamic in terms of re-organization. There are three big transformation process that been written in Telkom history; Transformation in Cacuk sudaryanto’s era, Kristiono’s era and Renaldi firmansyah’s era.

Frequent reorganizations “are like doctors treating patients with antibiotics,” says Peter Cappelli, director of Wharton’s Center for Human Resources. The medication might work short-term, but “long-term it can be harmful. The constant churning caused by these reorganizations generates costs and develops long-term cynicism about why they are done and what they mean.”

No one, of course, would argue against the need for organizational restructuring, especially as companies become more global and expand into new products and markets. And few would argue against the long-held belief that corporate strategy and structure must be aligned in a way that allows the company to manage change efficiently.

The problems arise when reorganizations are undertaken for the wrong reason, poorly implemented or fail to understand particular constraints of either the company or the market in which it operates.

“Deciding on the right strategy for the company is key,” says John Paul MacDuffie, co-director of Wharton’s Jones Center for Management Policy, Strategy and Organization. “Strategy-making processes done hastily and based on the wrong assumptions can mean moving the boxes around on the org chart without thinking through all the consequences.”

How you get to the right place depends on your perspective. “The resource capabilities view of strategy says it ought to grow organically out of a clear-eyed perception of what the company’s capabilities are and how readily they can be developed,” MacDuffie says, “as opposed to strategy-making occurring in a vacuum or from an externally focused competitive analysis that is naïve about how malleable the organization is” to change.

Whatever approach reorganizations take, they need to be more than symbolic, says Cappelli. “Changing company structure won’t accomplish much and can be very disruptive. A reorganization has to aim for something bigger – such as changing the culture, incentives and values of the organization – and trying to get people to behave differently. This could mean creating new compensation and promotion systems, developing different competencies among employees, committing to more retraining, and so forth. The usual model of work restructuring is that there are many different levers you can pull. But if all you are changing is just one lever, it won’t be very effective.”

Culture Changing

Reorganizations are frequently difficult in part because of cultural attitudes in the company that are hard to change. One way to make progress is to “reach into employees’ hearts. Another is to take a thousand small tactical steps – hiring people with a commitment to the new model or design, firing a few key people who are standing in the way, repeating over and over again why and how things are now different. After six months employees begin to realize that the company is serious about these changes.

 “Organizations have to be dynamic and people’s roles are always going to shift,”.

 “The challenge is to be thoughtful about how and why you reorganize. Done well, it’s a process of ongoing dynamic alignment.”

Telkom implementing new company culture, from 135 culture into 5C culture. This action is related to corporate identity and new positioning: Life Confident. There are five culture or values that are internalized Telkom’s brand-new to all employees; Expertise (skills), with a circle symbol indicates the completeness of product and services portofolio of new business in Telkom; Empowering (empowerment), symbolized by the hands that reach out, reflect the growth and expansion out; Assured (guarantees), symbolized by the hand fingers, reflects the rigor, attention, and trust, and also close relationship; Progressive (progress), illustrated with a combination of hands and circle like the sun rises a significant change and new beginnings; Heart (heart of life), is realized by symbol of hand, which reflects the life to reach the future.

In order to implement the new culture, Telkom’s management had run several socilatization about their new culture to the employees since 2008. Telkom knew very well that employee readiness is important to accept the transformation. Top level management keep repeating about the new culture and use the culture component in every speech to the employee. HR people also held several assesment related to the corporate new startegic business and the new culture. Employee is the key of the successfull transformation at Telkom because without its employee Telkom unable to run the transformation smoothly even in the first time all employee should  “run” to keep up with the new culture, new business, new division to satisfy the consumen and the company.

Another big transformation was happened at the biggest internet company, Google. As we know, since January 20th 2011 Google CEO was given to Larry Page from Eric Smidth. CEO postion which had been carried by Eric Scmidth officilay handed back to Larry Page on Monday(4/4/2011). At that occasion, Eric Schmidt said that Larry Page is ready to lead back the company he founded. He felt that he already give enough direct assistance or so-called adult supervision to Larry Page.

            “I’m very proud to be a CEO in the last decade and I’m sure the next 10 years the company will be better under Larry Page leadership. Larry, In my opinion,  is ready to lead” Said Eric Schmidt.

Larry’s return to Google is expected to make Google running more dynamic. On his first move, Larry Page re-organize Google structure. This re-organization is the massive reorganization that never existed in Google history. Google’s philosophy began to be changed by Larry Page with emphasis on the division of tasks and authority or decentralization.

 Here’s a new position which is under the Page after the re-organization was carried out.
1. Local and Commerce occupied by Jeff Huber
2. Search occupied by Alan Eustace
3. Advertising is occupied by Susan Wojcicki
4. Android occupied by Andy Rubin
5. Youtube occupied by Salar Kamangar
6. Social occupied by Vic Gundotra
7. Chrome occupied by Sundar Pinchai.

This time it seems Google’s re-organization is an important step that will determine their fate in the future, especially in the context of competition with Facebook. Larry Page seems to emphasize the engineer to occupy key position on Google, not to those who come from the field of management. Larry wanted decentralized organization, like practiced by Steve Jobs at Apple and Jeff Bezos at Amazon. The re-organization and decentralization has received good feedback from Google employees in Mountain View, California, United States.

Change must be realistic, achievable and measurable. These aspects are especially relevant to managing personal change. Before starting organizational change, the company should ask it self: What do we want to achieve with this change, why, and how will we know that the change has been achieved? Who is affected by this change, and how will they react to it? How much of this change can we achieve ourselves, and what parts of the change do we need help with? These aspects also relate strongly to the management of personal as well as organizational change.

In transformation process, company shouldn’t forget about its employees because they will suffer in terms of re-organization. Check that people affected by the change agree with, or at least understand, the need for change, and have a chance to decide how the change will be managed, and to be involved in the planning and implementation of the change. Encourage the managers to communicate face-to-face with their people too if they are helping you manage an organizational change.

Leader cannot impose change, people and teams need to be empowered to find their own solutions and responses, with facilitation and support from managers, and tolerance and compassion from the leaders and executives. Management and leadership style and behaviour are more and employees need to be able to trust the organization.

Employee does not have a responsibility to manage change – the employee’s responsibility is no other than to do their best, which is different for every person and depends on a wide variety of factors (health, maturity, stability, experience, personality, motivation, etc). Responsibility for managing change is with management and executives of the organisation – they must manage the change in a way that employees can cope with it. The manager has a responsibility to facilitate andenable change, and all that is implied within that statement, especially to understand the situation from an objective standpoint (to ‘step back’, and be non-judgemental), and then to help people understand reasons, aims, and ways of responding positively according to employees’ own situations and capabilities. Increasingly the manager’s role is to interpret, communicate and enable – not to instruct and impose, which nobody really responds to well.

The leader must agree and work with these ideas, or change is likely to be very painful, and the best people will be lost in the process.

change management principles

1. At all times involve and agree support from people within system (system = environment, processes, culture, relationships, behaviours, etc., whether personal or organisational).
2. Understand where you/the organisation is at the moment.
3. Understand where you want to be, when, why, and what the measures will be for having got there.
4. Plan development towards above No.3 in appropriate achievable measurable stages.
5. Communicate, involve, enable and facilitate involvement from people, as early and openly and as fully as is possible.

JOHN P KOTTER’S ‘EIGHT STEPS TO SUCCESSFUL CHANGE’

American John P Kotter (b 1947) is a Harvard Business School professor and leading thinker and author on organizational change management. Kotter’s highly regarded books ‘Leading Change’ (1995) and the follow-up ‘The Heart Of Change’ (2002) describe a helpful model for understanding and managing change. Each stage acknowledges a key principle identified by Kotter relating to people’s response and approach to change, in which people see, feel and then change.

Kotter’s eight step change model can be summarised as:

1. Increase urgency - inspire people to move, make objectives real and relevant.
2. Build the guiding team - get the right people in place with the right emotional commitment, and the right mix of skills and levels.
3. Get the vision right - get the team to establish a simple vision and strategy, focus on emotional and creative aspects necessary to drive service and efficiency.
4. Communicate for buy-in - Involve as many people as possible, communicate the essentials, simply, and to appeal and respond to people’s needs. De-clutter communications – make technology work for you rather than against.
5. Empower action - Remove obstacles, enable constructive feedback and lots of support from leaders – reward and recognise progress and achievements.
6. Create short-term wins - Set aims that are easy to achieve – in bite-size chunks. Manageable numbers of initiatives. Finish current stages before starting new ones.
7. Don’t let up - Foster and encourage determination and persistence – ongoing change – encourage ongoing progress reporting – highlight achieved and future milestones.
8. Make change stick - Reinforce the value of successful change via recruitment, promotion, new change leaders. Weave change into culture.

“Change must involve the people – change must not be imposed upon the people”

Conclusion

The perspective on change management does not diminish the role of the change management team, but it does help clarify that managing change involves both training of your change management team and enabling the key players  (executives, managers, supervisors, employees) to play their role in managing change. Both, Telkom and Google, surely has this change management team to make all the process run smoothly and all stakeholder has the same perception about the “new face” of the organization. The top level managment or the change management team should be able to give understanding to all employee about why the transformation should happened, how it’ll be transformed, what the employees role at the transformation. If the employee couldn’t understand all that question, the transformation wouldn’t run smoothly and success.  Preparation, implementation, and evaluation will be done by this management team in order to secure all risky aspect which has significant impact to the corporate business and environment.

Change management as  effective application of change processes and tools at each level in the organization should has special portion and attention. Every organization and company cannot avoid/resistance with changes, so that’s why the change management team should be formed by top level management to secure organization/company business or environment. Based on Prosci and the Change Management Learning Center tutorial, the primary task of the change management team in this environment is to:

• assess the organization’s change readiness
• develop a change management strategy
• identify and prepare the change management resources
• assess and prepare executive sponsors
• create and manage the change management plans
• audit compliance and design methods to reinforce the change in the organization including activities to celebrate success
• transition the change management activities to day-to-day business managers.

Source:

1. http://www.change-management.com/tutorial-cm-basics-who.htm
2. http://www.businessballs.com/changemanagement.htm