Sunday, August 9, 2009

The Effects of Organizational Development and Change

has been said that organizational development and change is inevitable in today’s competitive business climate. However, only selectively is change received with welcome arms by those most closely affected by it. So if organizational alteration is inescapable, how then can it be accomplished with the least collateral damage to those most closely involved? That is a question leaders and managers all too seldom seriously consider and plan for, but desperately need to understand and prepare for.

A number of years ago I found myself in a position in an organization that underwent frequent acquisitions and reorganizations. It seemed to those of us experiencing the changes that the frequency of change was weekly, but realistically it was annually. Therein lies an interesting fact: even to a psychologist who ought to know and understand change and its impact on people, when it happens close to home the frequency seems to be exaggerated. That is because change is often a traumatic event that can distort a person’s perception of reality. It’s also because change is typically viewed from an egocentric perspective: how will this new change impact my work situation and me?

Before we explore how organizational development and change impacts and is received by its participants, let’s be clear about the necessity of changing things in the first place. Although the status quo is comfortable and appears desirable from a personal perspective, it is in the vast majority of situations unrealistic to expect for any extended period of time. Speaking on this subject, Dr. George Odiorne once said, "That which does not change tends to stand still and soon becomes obsolete." In other words, the failure of an organization to effect strategic change could make the organization obsolete: that means out of business! Franz Kufka said the same thing another way, "In a fight between you and the world, bet on the world."

Organizational change could be as straightforward as changing the day people receive their paychecks, or it could be a major restructuring involving merging, divesting, or downsizing. There are small changes and there are big changes and the planning and executing of each requires understanding, wisdom, preparation and careful execution.

Organizational Development and Change Model

Models have been created to explain both how and why people affected by change behave as they do. While most models describe the effects of organizational change, the one described here is different because I, as an organizational psychologist, developed it while working for a company that was experiencing frequent change. Perhaps the insights of seeing the effects of change first hand, gives this model a different perspective than other models of the same type.

Although the six stages of reaction described in my model don’t occur every time and with every person, it’s amazing how accurately this model can predict how people behave when faced with organizational change. Many times in my consulting practice clients have said how this model explained behavior better than any other system they have seen.

Stage 1: When significant organizational change is first realized it is common for those affected to feel shock. It’s not uncommon, for example, to physically see the effects of shock in the faces and body language of those persons. The reason for the shock is a personal fear of how the change might impact the status quo. It’s important for leaders and managers implementing change to be aware that initial fear of the event is common, because it is a natural reaction. A person demonstrating shock from a personal fear should not be considered a problem. Rather, it is a reaction that usually dissipates in most people.

Stage 2: Soon after the Shock Stage sets in its common for people to go into denial. You can usually hear this stage more than see it, as in Stage 1. You’ll recognize Stage 2 by hearing comments like, "They’ll never go through with this!" Or, "I can’t believe this is going to happen!" Or, "Watch, they’ll change their mind before this ever gets off the ground." Or, "If we ignore this long enough, it will just go away." The reason people experience denial comes from their disbelief or even anger over what they think is about to happen. Whether it’s real or not, disbelief can trigger feelings, and expressions, of denial.

Stage 3: After experiencing shock and then denial, a person can make a conscious or unconscious decision that the impending change will be bad. This rejection of the change usually comes as a result of the person trying to preserve the status quo and/or a zone of personal comfort. Rejection of change can result in either a "fight or flight" reaction from persons affected by it. This is why it’s not uncommon for turnover to increase after changes are announced. People can believe that the possibility of comfort elsewhere is more probable than the uncertainty of change where they are.

Stage 4: The people who choose to stay, but who have not accepted or embraced the change, typically shift to a mode of tolerance. They may appear to be on-board, but in actuality the tolerance is only masking either overt or covert resistance. It is easier to deal with overt resistance than covert resistance. Overt behaviors are in the open and can be seen and diffused, whereas covert behaviors are difficult to recognize, let alone deal with.

Stage 5: When people who have been subjected to organizational change become involved in aspects of the changes, there is a possibility of strategic understanding. Involvement could be membership on a team, being asked for an opinion or suggestion, or participating in some way in the evolving organization. Without deliberate involvement, many people will take a "wait and see" attitude. The key to move people to ultimate embracing is maximum involvement of as many people as possible.

Stage 6: After a person has been involved in the planning and/or mechanics of the changes, and then has developed a strategic understanding, feelings of commitment can grow. While a few people can indeed gain commitment without moving through the five preparatory stages, most people will progress through the stages until they gain a sense of commitment or buy-in. People in the commitment stage tend to give advice to others about how the impending changes could be in the organization’s best interest. They also volunteer for assignments and are quick to give positive suggestions.

Rumination Loop. Many people who don’t become involved in the change process revert back to Stage 1 through a Rumination Loop. While experiencing resistance to the change, people can cycle back to the Shock Stage through the loop. In fact, it’s not uncommon for people to cycle through the Rumination Loop several times and even over several years. The key to moving people out of the loop is involvement.

Key Action Steps: When planning either a minor or significant change within an organization, consider these action steps to achieve maximum commitment from as many people as possible.

1. Describe what is going to happen.

2. Explain why the change is necessary.

3. Ask for reactions; listen to comments and feelings.

4. Acknowledge comments or objections and check for misunderstandings.

5. Ask for suggestions.

6. Ask for support.

7. Involve as many people in any way possible.

8. Follow through and monitor reactions.

Summary: In today’s business climate organizational development and change is a regular occurrence. While it’s true that many years ago change happened as at a snail’s pace, today it seems to be on a daily menu. Leaders and managers clearly need to be sensitive to the impact of change on their human capital. But at the same time they must weigh the benefits of what the change might do for the overall organization against what the change might do to those affected by it.

No comments: