UNIT II

CHANGE MANAGEMENT MODELS AND RESISTANCE TO CHANGE

Kotter's 8-Step Change Model

John Kotter (1996), a Harvard Business School Professor and a renowned change expert, in his
book ―Leading Change‖, introduced 8 Step Model of Change which he developed on the basis
of research of 100 organizations which were going through a process of change.

The 8 steps in the process of change include: creating a sense of urgency, forming powerful
guiding coalitions, developing a vision and a strategy, communicating the vision, removing
obstacles and empowering employees for action, creating short-term wins, consolidating gains
and strengthening change by anchoring change in the culture. Kotter‘s 8 step model can be
explained with the help of the illustration given below:

Step 1: Create Urgency

For change to happen, it helps if the whole company really wants it. Develop a sense of urgency
around the need for change. This may help you spark the initial motivation to get things
moving.

This isn't simply a matter of showing people poor sales statistics or talking about increased
competition. Open an honest and convincing dialogue about what's happening in the
marketplace and with your competition. If many people start talking about the change you
propose, the urgency can build and feed on itself.

It can be done in the following ways:

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 a. Identify potential threats , and develop scenarios showing what could happen in the
future.
b. Examine opportunities that should be, or could be, exploited.
c. Start honest discussions, and give dynamic and convincing reasons to get people talking
and thinking.
d. Request support from customers, outside stakeholders and industry people to strengthen
your argument.

Kotter suggests that for change to be successful, 75 percent of a company's management needs
to "buy into" the change. In other words, you have to work really hard on Step 1, and spend
significant time and energy building urgency, before moving onto the next steps. Don't panic
and jump in too fast because you don't want to risk further short-term losses – if you act without
proper preparation, you could be in for a very bumpy ride.

Step 2: Form a Powerful Coalition/Build a guiding team

Convince people that change is necessary. This often takes strong leadership and visible support
from key people within your organization. Managing change isn't enough – you have to lead it.

You can find effective change leaders throughout your organization – they don't necessarily
follow the traditional company hierarchy. To lead change, you need to bring together a
coalition, or team, of influential people whose power comes from a variety of sources, including
job title, status, expertise, and political importance.

Once formed, your "change coalition" needs to work as a team, continuing to build urgency and
momentum around the need for change.

It can be achieved through:

a. Identify the true leaders in your organization, as well as your key stakeholders.
b. Ask for an emotional commitment from these key people.
c. Work on team building within your change coalition.
d. Check your team for weak areas, and ensure that you have a good mix of people from
different departments and different levels within your company.

Step 3: Create a Vision for Change

When you first start thinking about change, there will probably be many great ideas and
solutions floating around. Link these concepts to an overall vision that people can grasp easily
and remember.

A clear vision can help everyone understand why you're asking them to do something. When
people see for themselves what you're trying to achieve, then the directives they're given tend to
make more sense.

It can be achieved through:

a. Determine the values that are central to the change.

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 b. Develop a short summary (one or two sentences) that captures what you "see" as the
future of your organization.
c. Create a strategy to execute that vision.
d. Ensure that your change coalition can describe the vision in five minutes or less.
e. Practice your "vision speech" often.

Step 4: Communicate the Vision

What you do with your vision after you create it will determine your success. Your message
will probably have strong competition from other day-to-day communications within the
company, so you need to communicate it frequently and powerfully, and embed it within
everything that you do.

Don't just call special meetings to communicate your vision. Instead, talk about it every chance
you get. Use the vision daily to make decisions and solve problems. When you keep it fresh on
everyone's minds, they'll remember it and respond to it.

It's also important to "walk the talk." What you do is far more important – and believable – than
what you say. Demonstrate the kind of behavior that you want from others.

It can be achieved through:

a. Talk often about your change vision.

b. Address peoples' concerns and anxieties, openly and honestly.
c. Apply your vision to all aspects of operations – from training to performance reviews.
Tie everything back to the vision.

Step 5: Remove Obstacles

If you follow these steps and reach this point in the change process, you've been talking about
your vision and building buy-in from all levels of the organization. Hopefully, your staff wants
to get busy and achieve the benefits that you've been promoting.

But is anyone resisting the change? And are there processes or structures that are getting in its
way?

Put in place the structure for change, and continually check for barriers to it. Removing
obstacles can empower the people you need to execute your vision, and it can help the change
move forward.

It can be achieved through:

a. Identify, or hire, change leaders whose main roles are to deliver the change.
b. Look at your organizational structure, job descriptions, and performance and
compensation systems to ensure they're in line with your vision.
c. Recognize and reward people for making change happen.
d. Identify people who are resisting the change, and help them see what's needed.
e. Take action to quickly remove barriers (human or otherwise).

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Step 6: Create Short-Term Wins

Nothing motivates more than success. Give your company a taste of victory early in the change
process. Within a short time frame (this could be a month or a year, depending on the type of
change), you'll want to have some "quick wins " that your staff can see. Without this, critics and
negative thinkers might hurt your progress.

Create short-term targets – not just one long-term goal. You want each smaller target to be
achievable, with little room for failure. Your change team may have to work very hard to come
up with these targets, but each "win" that you produce can further motivate the entire staff.

It can be achieved through:

a. Look for sure-fire projects that you can implement without help from any strong critics
of the change.
b. Don't choose early targets that are expensive. You want to be able to justify the
investment in each project.
c. Thoroughly analyze the potential pros and cons of your targets. If you don't succeed
with an early goal, it can hurt your entire change initiative.
d. Reward the people who help you meet the targets.

Step7: Build on the Change

Kotter argues that many change projects fail because victory is declared too early. Real change
runs deep. Quick wins are only the beginning of what needs to be done to achieve long-term
change.

Launching one new product using a new system is great. But if you can launch 10 products, that
means the new system is working. To reach that 10th success, you need to keep looking for
improvements.

Each success provides an opportunity to build on what went right and identify what you can
improve.

It can be done through:

a. After every win, analyze what went right, and what needs improving.
b. Set goals to continue building on the momentum you've achieved.
c. Learn about kaizen , the idea of continuous improvement.
d. Keep ideas fresh by bringing in new change agents and leaders for your change
coalition.

Step 8: Anchor the Changes in Corporate Culture

Finally, to make any change stick, it should become part of the core of your organization. Your
corporate culture often determines what gets done, so the values behind your vision must show
in day-to-day work.

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Make continuous efforts to ensure that the change is seen in every aspect of your organization.
This will help give that change a solid place in your organization's culture.

It's also important that your company's leaders continue to support the change. This includes
existing staff and new leaders who are brought in. If you lose the support of these people, you
might end up back where you started.

It can be achieved through:

a. Talk about progress every chance you get. Tell success stories about the change process,
and repeat other stories that you hear.
b. Include the change ideals and values when hiring and training new staff.
c. Publicly recognize key members of your original change coalition, and make sure the
rest of the staff – new and old – remembers their contributions.
d. Create plans to replace key leaders of change as they move on. This will help ensure that
their legacy is not lost or forgotten.

Advantages of Kotter’s Model

a. It is an easy step by step model which provides a clear description and guidance on the
entire process of change and is relatively easy for being implemented.
b. Emphasis is on the involvement and acceptability of the employees for the success in
the overall process.
c. Major emphasis is on preparing and building acceptability for change instead of the
actual change process.

Disadvantages of Kotter’s Model

a. Since it is a step by step model, skipping even a single step might result in serious
problems.
b. The process is quite time consuming.
c. The model is essentially top-down and discourages any scope for participation or co-
creation.
d. Can build frustration and dissatisfaction among the employees if the individual
requirements are given due attention

McKinsey’s 7-S Change Management Model

McKinsey‘s 7-S Change Management Model, also commonly referred to as the McKinsey 7-S
Framework, is a popular change management model that was developed in the 1980s by
McKinsey consultants James L. Heskett, John P. Kotter, and Leonard A. Schlesinger while
working with the executives of the companies facing various difficulties from struggling sales
to new product development problems.

They found that when successful companies are in trouble, they are able to quickly diagnose
and tackle the root of the problem, using a common framework that involves all seven parts of
an organization working together towards a common goal.
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McKinsey & Co. is a global consulting and accounting firm founded by University of Chicago
management professor James O. McKinsey in 1926. The firm specializes in management
consulting for a wide range of corporations, governments, and other organizations.

The McKinsey 7-S Model identifies seven components of an organization that must work
together for effective change management: Structure, Strategy, Staff, Style, Systems, Shared
Values, and Skills.

The McKinsey 7-S Model is a useful framework for people performing various roles within an
organization because it acknowledges that there are aspects of organizational change that affect
each component of the organization differently. If you work as a Human Resources Director,
your role might involve making sure that the organizational changes do not affect staff in an
adverse way and that they feel supported through the process of change. If you work as a CEO,
your focus might be on making structural changes to ensure that the organization is best
positioned for growth while simultaneously trying to maintain current levels of productivity.

For example, human resources departments often use this model as a way to facilitate a
productive process of recruiting new staff members to the organization. Marketing teams also
use it as a way of developing effective strategies for new product development, while a banking
institution might use the model to design the ways of implementing changes that will increase
overall levels of customer satisfaction.

The 7-S Model is commonly used by companies that deal with operational problems, whether
it‘s due to a company‘s current structure, or because they‘ve lost sight of their organization‘s
vision and strategy.

By identifying the areas of opportunity using this model, an organization can develop a plan
for change management and then work on implementing that plan effectively.

The McKinsey 7S Model is a framework for organizational effectiveness that postulates that
there are seven internal factors of an organization that need to be aligned and reinforced in order
for it to be successful.

Understanding McKinsey 7S Model

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The 7S Model specifies seven factors that are classified as "hard" and "soft" elements. Hard
elements are easily identified and influenced by management, while soft elements are fuzzier,
more intangible, and influenced by corporate culture.

The hard elements are Strategy, Structure and Systems

The soft elements are Shared values, Skills, Style and Staff

Hard Elements

Strategy

The strategy is the plan deployed by an organization in order to remain competitive in its
industry and market. An ideal approach is to establish a long-term strategy that aligns with the
other elements of the model and clearly communicates what the organization‘s objective and
goals are. An effective strategy provides a solid foundation for your organization‘s change
management plan. Without a clear organizational strategy, it can be difficult to convince your
employees or stakeholders that changes, in general, are absolutely necessary.

If you clearly define what your business stands for and how you want it to grow in the
future, people will be better able to cope and understand why changes are needed for keeping
the business moving forward.

structure

The structure of your organization refers to the different types of departments, divisions, and
roles that make up your company.

It also includes the reporting structure (who reports to whom) and how different departments
interact with one another.

Structure is important because it helps to define the roles which employees play within an
organization such as their level of authority and what they are responsible for.

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If a change being implemented affects many people‘s roles, it can be difficult to push through
the plan if the structure of an organization is not devised to support it.

Systems

Systems of the company refer to the daily procedures, workflow, and decisions that make up
the standard operations within the organization. An organizational system is about getting the
job done on a daily basis.

This includes specific procedures and protocols which people follow when completing their
tasks.

When thinking about changing your organization‘s systems, it might be necessary to assess the
different types of project management and workflows which are currently in place.

Each of these systems can have a different impact on the overall functionality of your
organization.

Soft Elements
Shared values

Shared values are the commonly accepted standards and norms within the company that both
influence and temper the behavior of the entire staff and management. This may be detailed in
company guidelines presented to the staff. In practice, shared values relate to the actual
accepted behavior within the workplace.

Skills comprise the talents and capabilities of the organization‘s staff and management, which
can determine the types of achievements and work the company can accomplish. There may
come a time when a company assesses its available skills and decides it must make changes in
order to achieve the goals set forth in its strategy.

Style

This S represents the style of leadership and decision-making that is currently in place within
your organization. When dealing with style, you want to assess whether or not there is a need
for any changes within departments.

For example, some organizations might follow a very top-down management structure while
others take a more team-oriented approach.

Staff

This element is all about the people within your organization. Staff refers to the personnel of the
company, how large the workforce is, where their motivations reside, as well as how they are
trained and prepared to accomplish the tasks set before them.

You might want to ask questions like:

 Are all the positions in your company held by the right people?

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  Are there any problems regarding your employees, such as low morale or burnout?
 What positions do you have filled? What are the gaps in the organization?
 What is the attrition level? What is the level of diversity?
 What is your Workforce Strategy?

The answers to these questions will help you better understand where you might encounter
problems that need to be addressed.

Skills

This S is related to the skills of your employees.

Part of this is about assessing what employees are currently bringing to the table and what
competencies they have or need to acquire.

Part of this assessment also involves understanding whether or not employees are up-to-date
with current industry knowledge and skills.

For example, if your organization is working in an industry that is rapidly changing, you must
surely find ways to ensure your employees are learning new things to help them remain
competitive.

Shared values

Shared values are all about the culture of your business.

It refers to how employees interact with one another and what values they share. For example,
an organization that is filled with workaholics might foster a work hard – play hard
culture where employees make a special effort and then go out to have fun together.

On the other hand, an organization filled with people who value work-life balance should
introduce a different initiative that lets their employees use flexible schedules to take extra time
off for personal projects.

This S also has to do with your company‘s mission and vision.

The shared values of your employees should reflect the mission and vision of the company. If
you find that there is a disconnection here, it might be time to reassess what the company values
are.

In addition to assessing the current state of your organization in each of these Ss, you should
also consider your goals and the possible impact that the change initiative will have.

For example, if your company is trying to pivot towards a new industry or it‘s addressing some
internal flow problems that hinder productivity, this might have an impact on which S you want
to target and which will likely need the most work.

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When assessing each of these elements, remember that it‘s very important to consult with senior
leaders within your organization to get their input on the possible changes that are likely to
occur.

The McKinsey 7-S Model is applicable in a wide variety of situations where it's useful to
understand how the various parts of an organization work together. It can be used as a tool to
make decisions on future corporate strategy.

The framework can also be used to examine the likely effects of future changes in the
organization or to align departments and processes during a merger or acquisition. Elements of
the McKinsey Model 7s can also be used with individual teams or projects.

These 7 factors are used by management to identify where a company excels and where it needs
more work, in terms of creating an optimal and efficient workforce. It is also used to evaluate
performance following a merger or other restructuring to identify areas that need improvement.

The Benefits of McKinsey 7-S Model

The McKinsey 7-S Model is an effective framework for change management because:

a. It helps both individual employees and upper-level executives to understand various

components of organizational change that affect the entire organization.
b. It helps individuals to better understand their roles in the process of organizational
change, as well as how much they can contribute toward effective implementation.
c. For upper-level executives, this model provides a comprehensive framework for
understanding the ways that organizational change affects all areas of the organization
so that it makes it possible to develop and implement a plan that will have the most
effective results possible.
d. People who use this model typically report that it helps them motivate their staff
members and that it‘s an excellent way to align the entire organization around a
common goal.
e. The model can also help to promote greater trust between different levels of
management within an organization, especially if it‘s used for ‗bottom-up‘ change
efforts focused on involving employees in the design and implementation process of
organizational change.
f. The model suggests that the risk of resistance to change can be greatly lessened by
including all seven components from the very beginning, which is a helpful way to think
about organizational change and planning for effective implementation.
g. Finally, using this model ensures that your organization‘s culture is not negatively
affected by implementing necessary changes.

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Burke Litwin Model of Organisational Change

The Burke Litwin Model of Organisational Change is all about defining and establishing a
cause-and-effect relationship. The model assumes 12 organisational elements that determine a
change within an organisation.

The model derives its name from two organisational change consultants and was developed in
the 60‘s by W. Warner Burke and George H. Litwin.

It is a useful change management tool to better understand all aspects of an organisation and to
view them from a perspective of change.

In many cases, the various facets are taken too little into account, as a result of which a change
can have negative consequences for both the organisation and employees.

In addition, the change model shows that the different elements are interconnected and
influence each other. It is an ‗open system theory‘ that assumes changes come from external
influences.

The Burke Litwin Model as a framework

The Burke Litwin Model of Organisational Change establishes a framework in which four
element groups within organisations are distinguished and presented in columns. The middle
column is often referred to as the backbone of the model.

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Burke Litwin Model: 12 elements

The 12 elements are grouped according to the element groups and are connected to each other.
Due to them being connected, the 12 elements can also influence each other.

Below is a brief summary of all 12 dimensions from the Burke Litwin model:

1. External Environment

According to the model, it is especially external influences that are important for organisational
changes. Think of the economy, competition, customer behaviour and politics and legislation.

When the influences from the external environment can be identified, this helps organisations to
better understand the direct or indirect impact and act accordingly. An organisation has no
control over external influences.

2. Mission and Strategy

This describes the organisation‘s goal and the processes that ensure the goal and course can be
realised. The vision, mission and accompanying strategy are defined by the highest level of
management.
It is recommended that the organisation always checks whether these suit the position of the
employees.

3. Leadership

This concerns the responsible positions that give direction to the rest of the organisation.
Managers are responsible for developing a vision and motivating employees.

By having insight into key positions, this can be addressed in the event of a change.

4. Organisational Culture

Every organisations has its own values. This is less formal than the Mission and Strategy
element, but is present across the entire organisation.

An organisation‘s culture includes both explicit and implicit rules, including regulations,
practices, principles and manners.
5. Structure

This concerns the hierarchical structure of the organisation, recognisable departments and
formal communication channels. It also includes the position-oriented structure, such as
responsibilities, authority, communication, decision-making and control.
6. Systems

This is about policy and procedures; mechanisms that are in place to help and support
employees. Think of IT services, facility departments and internal customer support. It covers
both employees and the organisation‘s activities.

7. Management Practice
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This is about the behaviour and activities of managers, which are generally aimed at
implementing the overall strategy. How well do managers comply with the strategy and how do
they deal with the resources at their disposal? How is their relationship with the employees?
These are all questions that arise when discussing management practice.

8. Working Climate

This relates to employees‘ experiences when it comes to the work environment. How do they
experience mutual cooperation, how comfortable do they feel, and do they feel sufficiently
rewarded for their effort?

The mutual relationship with colleagues and the extent to which an organisation makes
employees happy are very important when discussing the working climate.

9. Tasks and skills

This is about the (individual) task requirements and the alignment of the job description with
employees‘ expertise. What are the requirements of a specific job, and does this fit with the
skills and knowledge of an individual employee? It is all about linking the right positions to the
right employees.

10. Individual values and needs

This relates to the demands and expectations that employees have, including their remuneration,
work-life balance, their role within the organisation and their responsibilities.

It is about the opinion employees have about the quality of their work and aims to discover their
needs. In some cases, this may result in task expansion or even job enrichment, meaning the
employee is given more responsibility.

11. Motivational Level

Motivation is about setting goals and inspiring and stimulating employees. The more motivated
employees are, the more willing they are to dedicate themselves to the organisation.
12. Individual and General Performance

This dimension considers the performance level of both the individual employee and on a
departmental and organisational level. As mentioned earlier, this can be measured on the basis
of turnover, productivity, quality requirements, efficiency and customer satisfaction.

Application of the change management model

The Burke Litwin Model of Organisational Change is based on assessing organisational and
environmental factors, which may be adapted to ensure a successful change.

The most dominant factor that causes organisational change is often the external environment.
As a result, this requires organisations to adjust and change their mission and strategy, as well
as the organisational culture and structure.

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The Burke Litwin Model of Organisational Change provides and effective strategy for
managing organisational change. However, its effectiveness depends on how well each of the
12 dimensions can be identified. Problems within organisations must first be diagnosed, after
which an action plan can be created.This requires the identification of the element group that
causes the change. Subsequently, the specific element within that element group must be
identified and analysed.

Porras & Robertson Change Model

Porras & Robertson (1992) outline four types of organizational changes based on the category
of change (planned or unplanned) and its order (first or second).

Planned change originates with a decision made by the organization itself with the deliberate
purpose of improving its functioning. It is also common to engage an outside resource to help in
the processes of making these improvements. Planned change is typically initiated to respond to
new external demands imposed upon the organization. Planned change will often affect many
unforeseen segments of the organization. Unplanned change is change that originates outside of
the organizational system and to which the organization must respond. This adaptive response
is often focused on the alteration of relatively clearly defined and narrow segments of the
organization. It is spontaneous, evolutionary, fortuitous, or accidental.

Figure: Types of organizational change (Porras & Robertson, 1992).

First-order change, linear and continuous in nature, involves alterations in system

characteristics without any shift in either fundamental assumptions about key organizational
cause-and-effect relationships or in the basic paradigm used by the system to guide its
functioning. Second-order change is a multi-dimensional, multi-level, qualitative,
discontinuous, radical organizational change involving a paradigmatic shift. The complexity of
the factors involved in an organizational setting (Porras & Robertson, 1992) can be illustrated
as in Figure 50.

Factors influencing an organizational setting

The main research results presented in this thesis are based on the concept of configurable
components (see section 5.4). This concept of configurable components was implemented in a
commercially available product data management (PDM) system. The concept and system
support were then introduced in the operational development of a new car program as the core
product description and release system. All the cars in the program are developed as derivate
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products based on a common platform. Using the terminology for change interventions
presented above, the introduction of a new core product description and release system is a
planned second-order change. Such a change intervention is not limited to a certain group of
people or a certain set of tasks, but rather has different kinds of impacts on most aspects of a
company that relate to the product development process. The prescription (the concept of
configurable components) is thus introduced to the organizational setting as one piece of a
larger change intervention (the introduction of a new core product description and release
system). The implications of this are that a second-order planned change will influence and be
influenced by a whole range of factors and aspects governing the organizational behavior. As a
consequence it will be difficult to control all the factors necessary for a successful
implementation of the new concept. Some important factors can be controlled while others will
be out of the sphere of control and will thus in some cases lead to a direction that is less
favorable for a successful implementation of the new concept. Another effect is that it is hard to
attribute a certain effect to the specific concept introduced. The observed effect could just as
well be driven by a number of other factors that were triggered in the course of the larger
change process.

Greiner’s model of organizational Change

Organizations are always under way and according to the American organizational expert Larry
Greiner, comparisons can be made with living organisms that go through several growth phases.
In 1972 he described an organizational growth model for enterprises, in which he initially
proposed five stages. The growth towards a next stage is accompanied by resistance, which is
also referred to as growing pains. Greiners Model of Growth, Greiner’s model of
organizational growth or the Greiner Business Growth Model is a popular strategic

15
management tool which is very often used in today‘s modern businesses to make the right
strategic decisions.
The only variable in the Greiner Growth Model is the time factor. The Greiner growth model is
a descriptive framework in which the age of the organization is marked out against the size of
an organization.

Larry Greiner assumes that an organization grows and expands throughout the years. The
Greiner Growth Model makes it easier to understand why management styles, organizational
structures, coordination mechanisms work and why they do not work at certain phases in the
development phase of an organization. Every phase requires different competences of the
entrepreneur, as a result of which the Greiner Growth Model orients towards strategic policy.

What is the Greiner Curve/ Greiner Growth Model?

The "Greiner Curve" is a useful way of thinking about the crises that organizations experience
as they grow.

The Greiner Curve describes the different phases that organizations go through as they grow.
All kinds of organizations – from design shops to manufacturers, construction companies to
professional service firms – experience these.

Each growth phase is made up of a period of relatively stable growth, followed by a "crisis"
when major organizational change is needed if the company is to carry on growing. Although
the word "crisis" is often linked to a state of panic, it can also mean "turning point." While
companies certainly have to change at each of these points, if they properly plan ahead, there is
no need for panic, and so we will call them "transitions."

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Phases of the Greiner Growth Model

Larry Greiner originally described five phases of growth in his Greiner Growth Model to which
he later added a sixth phase. Each phase ends with a short crisis/ growing pains after which the
next phase begins.

1. Growth through creativity

In this pioneering phase of the Greiner Growth Model, the company is young and relatively
small. The organization is informal and the employees are very loyal. There is a flat
organizational structure and the entrepreneur is externally oriented; he invests in new clients.

Growing pains/ Crisis

Because the organization is growing (too fast) and is becoming more complex, the entrepreneur
is no longer able to take stock of the situation and a leadership crisis arises. Coordination and
internal control can no longer be carried out by one person. There is a need for an improved
structure.
2. Growth through direction

In this management phase of the Greiner Growth Model, functional managers are appointed as a
result of which a middle management is created that controls the primary processes. Rules,
procedures and business are formalized and standardized. The central coordination remains in
the hands of the entrepreneur.

Growing pains
Because of further growth, the coordination problems may become too big for the entrepreneur.
In addition, middle managers need more autonomy. The autonomy crisis is born.

3. Growth through delegation

In this phase of decentralization, the entrepreneur delegates important tasks to his middle
management. Results are aimed for and the middle managers are responsible for achieving
tactical and operational objectives. Management moves at a strategic level and rarely
intervenes. A division structure is created with separate product groups and individual
managers.

Growing pains
The more divisional managers, the more difficult it will become for the management board to
coordinate all the divisions that operate independently. There is a risk of a management crisis.
There is a good chance that the divisional managers plot their own course too much as a
consequence of which the company could break up.

4. Growth through coordination and control

In the standardization phase of the Greiner Growth Model, more emphasis is put on the
coordination between the various units. In large diversified organizations the various staff
departments take up a strong position from the headquarters from which the divisional
managers are managed.

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Growing pains
When the staff departments have too much power and when there is too little scope for the
divisional managers, a red tape crisis arises. The rules have made the company too inflexible
and rigid.

5. Growth through cooperation

In the cooperation phase of the Greiner Growth Model, cooperation between line and staff
departments is aimed at and this creates a break-up of the hierarchical coordination forms such
as a matrix structure or a project organization. This phase is characterized by much mutual
contact between employees via all kinds of consultation groups. There is little formalization and
standardization.

Growing pains
The frequent consultations constitute a pitfall, as a result of which a consultation crisis may
arise. There is every chance that supervision and control decline sharply. This could mean the
end for organizations, unless they develop through external alliances.

6. Growth through alliances

In this ‘growth through undertaking phase’ the organization only requires good external
contacts and alliances. These can be found in mergers, alliances and extensive networks.

Growing pains
Because an organization is more focused on alliances than its own core-business, there is a
good chance that an identity crisis will present itself. The organization is taken over completely
by other businesses and the ‘old’ situation will disappear completely.

Using the Greiner Growth model

By providing an insight into the growth phases, the Greiner Growth Model can be a tool for
organizations to tackle the subsequent growing pains. Organizations will be prepared for any
possible growing pains, so they can anticipate them. However, they cannot determine the exact
moment growing pains present themselves as it is not possible to determine the duration of a
growth phase in advance.

Growing pains can also have a positive effect on a company. These growing pains are
experienced as something negative by the parties involved, but essentially they are an excellent
means to shake up the organization and make everyone aware that it is necessary for them to
embark on a new course. Look here for your template.

Resistance to Change

Change is constant and unavoidable. However, human behaviour has repeatedly shown a
resistance to change in the existing methods and ways of doing work. Organizations, for the
18
advancement of business processes, require constant adaptation to changes. However,
organizational resistance to change acts as a major hindrance in the path of development and
success of an organization. Such resistance to organizational change brings in the need for
defined change management.

Resistance to change is the act of opposing or struggling with modifications or transformations

that alter the status quo. This resistance can manifest itself in one employee, or in the workplace
as a whole.

Resistance to change is the unwillingness to adapt to altered circumstances. It can be organized,

or individual. Employees may realize they don't like or want a change and resist publicly, and
that can be very disruptive.

Employees can also feel uncomfortable with the changes introduced and resist, sometimes
unknowingly, through their actions, their language, and in the stories and conversations, they
share in the workplace.

In a worst-case scenario, employees can be forceful in their refusal to adopt any changes,
bringing confrontation and conflict to your organization.

How Resistance to Change Works

Resistance to change is evident in actions such as:

 Criticism
 Nitpicking
 Snide comments or sarcastic remarks
 Missed meetings
 Failed commitments
 Endless arguments
 Sabotage

When employees are poorly introduced to changes that affect how they work, especially when
they don't see the need for the changes, they may be resistant. They may also experience
resistance when they haven't been involved in the decision-making process.

Resistance to change can intensify if employees feel they have been involved in a series of
changes that have had insufficient support to gain the anticipated results. They also become
weary when changes happen too frequently, becoming a flavor-of-the-month instead of strategic
action.

Whatever causes the resistance to change can be a big threat to the success of your business and
can affect the speed at which your organization adopts an innovation. It affects the feelings and
opinions of employees at all stages of the adoption process. Employee resistance also affects
productivity, quality, interpersonal communication, employee commitment to contribute, and
the relationships in your workplace.

Resistance to Change Meaning in Organizational Context

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The resistance to change meaning can be defined as a major obstacle in the way of development
with new technology and methodologies. Change in the techniques and organizational structure
comes at regular intervals. However, with pre-existing methods, individuals become reluctant to
learn and implement the new techniques bringing in a resistance to change. Resistance can be in
the form of protests and strikes by employees, or even in the form of implicit behaviour. The
organization with its managers must take up initiatives in managing resistance to change and in
the process develop a gradual adaptation to change ensuring productivity as well as efficiency at
work.

Reasons for Resistance to change

Fear of change:

One of the most common reasons for resistance is fear of change. This includes fears of not
being able to perform or not being "good enough". People also fear uncertainty and the
unknown. It's a bit like the sailors of old who feared the uncharted oceans.

Poor communication:

It's self evident .When it comes to change management there's no such thing as too much
communication.

Changes to routines:

When we talk about comfort zones we're really referring to routines. We love them. They make
us feel secure and efficient. So there's bound to be resistance whenever change requires us to do
things differently

Low trust:

When people don't believe that they, or the company, can competently manage the change there
is likely to be resistance. This may be related to their experience of change in the past.

Economic Reasons:

Keith Davis, remarks ―people fear technological advances may result in unemployment,
reduced work hours, demotion, reduced wages and reduced incentives and hence resist change.‖

Obsolescence of Skills:

Sometimes, however, introduction of new technology throws people away from doing
important jobs (or demanding works) to less important or dead-end ones where little or no skills
are required to exhibit. More realistically, when people perceive psychological degradation of
the job they are performing they resist such a change.

Preference for Status Quo:

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Perhaps the biggest and the most sound reason for the resistance to change is the preference for
status-quo. People have vested interest in the status quo. Change may pose disturbance to the
existing comforts of status quo.

Fear of the Unknown:

Change presents the unknown things, which cause anxiety. Whenever people do not know
exactly what is likely to happen, they are likely to resist it. The unknown thing poses a constant
threat. Thus people resist change and its consequences.

Social Reasons:

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Economic and personal reasons for the resistance apart, some social reasons may also be
accountable for the possible resistance to change. Social displacements and peer pressure are
among those social reasons that are very important for the manager to consider when dealing
with resistance to change.

Social Displacements:

Introduction of change often results in breaking up of work groups. In the work environment
develop informal relationships. When the friendship with fellow members is interrupted, then
there is a possibility for the employees to experience psychological let down. When the social
relationships develop, as normally is the case, people try to maintain them and fight social
displacement by resisting change.

Peer Pressure:

Situations are not rare where individuals are prepared to accept change at their individual level,
but refuse to accept it for the sake of the group.

Security:

People have to learn new methods of doing things. They are not sure whether they would
become adept in the new method even after training. This fear of retraining the effectiveness
with new methods creates a sense of insecurity in the minds of the people. This is apart from the
economical job security.

Undermining of Status and Authority:

The newer technologies and methods may do away with part of the status and authority that is
vested with a position earlier. For example if the work methods are completely automated, the
supervisor feels that his authority and status are undermined and that he will have no control
over the subordinates and they will not respect or obey him.

Retraining:

Change may require the employee to go for retraining to update his/her skill to work with the
newer machines. But some may

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be scared to interact with the new machines and methods. People prefer the status quo. Most
of the people are comfortable with the existing set up. This may also add to the resistance to
change.

Types of Resistance
The types of resistance to change are stated below:
1. Logical Resistance: Such resistances come in with the time genuinely required in
adaptation and adjustment to changes. For example, with the advent of talkies, the movie
production houses had to shift techniques in the change from silent movies to talkies. This, in
a very logical sense, took time for the sound engineers and even the filmmakers to adapt.

2. Psychological Resistance: Often resistance to change in change management comes with

the psychological factor of fear of embracing the unknown, or even from hatred for the
management and other mental factors like intolerance to changes.

3. Sociological Resistance: Sometimes resistances come not for particular individuals but
from a group of individuals. In such cases, individuals do not allow their acceptance with the
fear of breaking ties with the group.

Strategies to overcome Resistance

Simply put, change can be both daunting and difficult. Most people prefer to maintain their
existing habits and comfort zones versus venturing into unknown territory.

Organizational change comes with a unique share of challenges. Opting to change one‘s
personal life is very different from embracing top-down change in the workplace. Resistance
to organizational change occurs due to employees not having a choice, which triggers
feelings of lost control and uncertainty.

Resistance to change in the workplace can manifest itself in many ways. Absenteeism,
missed deadlines, failed commitments, and a general sense of apathy are all common
indicators that members of an organization are not fully invested.

To combat these problems, organization leaders must identify where resistance is most likely
to occur and devise a game plan to prevent it. In doing so, specific strategies are proven
effective in helping organizations overcome unproductive resistance to change.

1. Listen to Employee Concerns

The first strategy in overcoming resistance to organizational change is rooted in
communication. Communication is critical — which most entrepreneurs and leaders already

23
know. However, try letting the employees of the organization initiate the conversation.
People want their voices to be heard, and allowing them to share their perspectives can help
alleviate frustration and confusion over the situation.

Your employees‘ thoughts, concerns, and suggestions will prove invaluable in steering your
initiative for change and the overarching sentiment behind it. At the very least, firmly
understanding your employees‘ perspectives will help you better understand the premise of
their resistance to change.

2. Define and Communicate Reasons for Change

The next strategy to overcome resistance to change is defining the why, what, and how
behind the change and communicating this to employees. Leaders must develop a
communication strategy that involves more than just telling employees what‘s expected of
them. This strategy should segment and target each department or employee audience,
focusing on what they care about and need to know.

According to employee engagement trends in the U.S., almost one-third of employees don‘t
understand why changes are occurring. This underscores the importance of clearly defining
reasons for change as well as communicating the intention behind it. In doing so, emphasis
should be placed on why change will ultimately benefit employees in the long run.

3. Build Excitement
The way you communicate anticipated change in the workplace has a tremendous impact on
how much resistance will arise. When leaders passionately and wholeheartedly share the need
for change, their conviction can be positively contagious. In turn, the organization can
holistically build excitement and optimistic sentiment for change. Conversely, any
apprehension can undermine and hinder effective change.

4. Prioritize Employees
Change can only occur if your team is on board, so it‘s essential to prioritize your employees‘
interests and incentives. If you‘re implementing a new process or workflow — plan your
project through the perspective of employee adoption rather than overly focusing on the
system itself. Think not just about what the new method can do. Instead, think about what
employees can do with the help of this new workflow. Putting employees first and
establishing alignment is the foundation for trust, which is crucial to organizational change.

5. Delegate Change
A powerful top-down strategy is to fight resistance with culture. Inspirational leaders
establish a company culture that makes overcoming resistance a vital part of change
management and not a separate corporate function. Start by training team members who are

24
natural leaders in the organization. They will serve as influential role models for the rest of
your employees, which can profoundly affect the organization.

6. Leverage Data
While resistance to change in the workplace is typically an emotional response, it can be
helpful to leverage logical facts and data as a supplementary strategy. Encourage your
employees to see the data for themselves. This is an effective way to show transparency and
demonstrate the need for improvement simultaneously.

7. Implement Change in Phases

Any sort of transformation in the workplace doesn‘t occur overnight. There‘s significant
preparation leading up to the change, along with a great deal of anticipation and participation
from employees at all levels. Implementing change in phases can help employees adopt new
ways of working one step at a time.

A longer, more strategic rollout is almost always the best avenue compared to a radical shift
in direction. Not only does gradual rollout allow employees to adapt to the change, but it
gives leaders a chance to answer questions and address any issues well in advance.

Managing Resistance to Change

An organization‘s effort in managing resistance to change should come with proper education
and training of the employees of the changes implemented. For a smooth change to facilitate,
the organization has to take care of the considerations stated below:
 Changes should come in stages. A one-time major change would straightaway put
operations into a stop.
 Changes should not affect the security of workers.
 Leadership qualities in managers with initial adaptations would gradually encourage
employees to do so.
 An opinion must be taken from the employees who will ultimately be subject to the
changes.
 Educating the employees and training them with the new methodology will boost up
their confidence and build their efficiency.
The basic resistance to change theory defines the resistance to change meaning as the
reluctance of people to adapt to the changes and to cling to the pre-existing customs and
methods, mostly due to the fear of facing the unknown and its possible negative effects. The
management of an organization must be well aware of the various aspects of resistance to
organizational change and be trained if the need arises, in methods of managing resistance to
change. This is crucial for a smooth transition and restoration of organizational harmony.

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What is collaborative management?
Collaborative management is the coordination of efforts between managers, supervisors and
employees to attain common objectives. In a collaborative management environment, a team
of managers or supervisors work together with their employees to ensure the success of an
organization, instead of appointing management responsibilities to a single individual.

Collaborative management allows supervisors to work together using a variety of

management techniques to promote unity and teamwork within an organization.
Collaborative management may help organizations improve their functions by allowing
managers to combine their strengths with the strengths of their employees, collectively
overcome challenges as a team and enhance the efficiency and productivity of business
operations.

Characteristics of collaborative management

There are a few key characteristics of collaborative management, including:

1. Active participation

A prominent characteristic of collaborative management is the active participation by all

levels of management and employees. Collaborative management encourages the input and
opinions of each member of an organization and encourages collective participation in
essential organization functions. This could include the planning, implementing and
monitoring of company projects, discussions about important organizational decisions and
meetings about the values and mission of the company.

2. High level of honesty

Collaborative management promotes a high level of honest communication between

managers, supervisors and employees. Because management and employees work together to
achieve mutual objectives, they often engage in open, effective communication to succeed in
their efforts. Honest communication between leadership and staff members is a powerful way
to build trust, promote discussion and maintain positive relationships in the workplace.

3. Mutual decision-making

In a collaborative environment, managers and employees make unified decisions to achieve

their goals and contribute to the success of their organization. This key characteristic of
collaborative management ensures that the opinions of each staff member, from employee to
upper management, have value and influence during important decision-making processes.

4. Team-based solutions

Another key characteristic of collaborative management assists in the overcoming of

challenges or barriers in the workplace. When a collaborative organization encounters a
challenge or setback, the entire team of management and employees contributes to seeking a

26
solution. Not only does this allow for innovative thinking, but it also ensures that the
solutions implemented benefit each member of the organization.

5. Continual feedback

Collaborative leadership often encourages managers and their employees to work closely
with one another daily. This daily collaboration allows for continual feedback, instead of the
traditional model of monthly or annual performance evaluations. Receiving immediate
feedback may help employees and managers perform to the best of their abilities and make
improvements to their processes more quickly than in traditional methods of performance
reviews.

Advantages of collaborative management

There are several benefits and advantages of incorporating collaborative management into
your existing processes because it:

1. Strengthens relationships

Employees may work more frequently as a team under collaborative management styles,
which may present more opportunities for connection and the development of positive
workplace relationships. When members of a team bond with one another, they may be more
productive or successful in their collaborative efforts. These connections may also create high
levels of loyalty and communication within teams and could result in an improvement in
products, services and innovative processes.

2. Integrates new employees

A collaborative work environment may assist in integrating new employees into an

organization. When members of a team support each other and collaborate to complete tasks,
new members of the team may feel welcomed and able to easily adapt to their
responsibilities. This could help shorten the amount of time needed for training and
onboarding, allowing new employees to become productive contributors shortly after joining
the team.

3. Creates shorter delivery times

Collaborative management styles may empower employees to focus on completing tasks that
are best suited to their talents and strengths. This allows the quality of group projects and
initiatives to increase because teams spend less time compensating for weaknesses and spend
more time fostering the strengths of each team member. In turn, this may help to increase
productivity, shorten delivery times and reduce time spent on review and revision. By
delivering high-quality, timely products and services to customers and clients collaborative
management may help increase customer satisfaction.

4. Promotes thoughtful decisions

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Collaborative management is unique because it allows the opinions of each employee to have
value during decision-making processes. This may provide an opportunity for organizations
to make thoughtful decisions that benefit the company and their valued team members.
Thoughtful decision-making that accounts for the well-being and recognition of each
individual is an important part of ensuring employee satisfaction, maintaining positive
company culture and promoting the success of an organization.

5. Improves workplace morale

Often, a collaborative work environment allows team members to learn from each other,
work together to solve problems and build positive relationships. This may contribute to an
inclusive and encouraging workplace and could help to boost employee morale. Satisfied
employees who feel valued and welcome within their organization may result in less
employee turnover, increased productivity and enhanced quality of products and services.

6. Encourages creativity

In a collaborative style of management, employees are able to express their creativity and
innovation in order to better their processes and improve the results of their efforts. New
ideas formed from this valued sense of innovation may provide insight into revolutionary
ways for organizations to improve their existing practices. Allowing employees to explore
their creativity in the workplace is also a great way to maintain positive employee
relationships, improve company morale and promote new methods of success.

7. Creates equal responsibility

Collaborative management may have an important part in creating an equal division of

responsibilities. The process of working as a unit to achieve mutual objectives naturally
divides the workload equally among the participants and allows for support when questions
or barriers arise. Collaborative styles of management may help to ensure that each member of
the team feels comfortable with their amount of responsibility and has access to the resources
needed for success. In turn, this may increase efficiency and productivity and could improve
the quality of products and services.

Collaborative Management by objectives (CMBO)

MBO is a Collaborative Management Approach. Collaborative Management by

objectives (CMBO) is a process of defining objectives to be achieved within an organization
so that the management and the employees agree to the objectives, and understand their
roles and duties towards the organization in order to achieve them.
The CMBO process involves five steps −
 Review organizational objectives − The manager gains a clear understanding of
organization's overall objectives.

28
  Set worker objectives − The manager and the workers meet to agree on worker
objectives to be achieved by the end of a given time period.
 Monitor progress − At regular intervals during the normal operating period, the
manager and the workers check to see if the objectives are being reached.
 Evaluating performance − At the end of normal operating period, the worker's
performance is measured by the extent to which the worker reached the objective.
 Give reward − Rewards are given to the worker on the basis of the extent to which
the objectives were reached.

Some of the important advantages of MBO are given below −

 Motivation − It encourages employee job satisfaction and commitment.
 Better communication and Coordination − Frequent reviews, and interactions
between superiors and subordinates builds harmonious relationships within the
organization and solves problems.
 Clarity of Goals − Subordinates tend to have a higher commitment towards the
objectives they set for themselves than those imposed on them by others.

Need for Collaborative Management

In her 1994 Harvard Business Review article "Collaborative Advantage", Rosabeth Moss
Kanter mentioned about leaders who recognize that there are critical business relationships
that cannot be controlled by formal systems but require a dense web of interpersonal
connections.
Followed by a book published in that same year, Chrislip and Larson learned that
collaborative management needs a different kind of leadership. It needs leaders who can
safeguard the process, facilitate interaction, and patiently deal with high levels of frustration.
In 2013, Harvard Business Review authors Nick Lovegrove and Matthew Thomas explored
the complex relationship between the business, the government, and various social sectors.
Their research suggests that the future of collaborative leadership depends on the ability of
leaders to engage and collaborate with the business, the government, and the social sectors.

29
Features of Collaborative Management
Some of the significant features of collaborative management are as follows −
 It is based on the principle of active participation of all team members in the planning
and control process as well as in networking those using information,
communication, and collaboration modules.
 Management is not regarded as an activity reserved solely for managers but as an
integral part of the team work of all team members.
 It creates a high level of transparency and a shared awareness of quality among team
members.

Collaborative Decision Making

Collaborative Decision Making (CDM) is a joint initiative aimed at improving the flow
management through increased information exchange among the superior and the
subordinates.
CDM is an operating paradigm where decisions are based on a commonly shared view of the
leaders and the team members, and an awareness of the consequences of the mutual
decisions made.
The following diagram shows collaborative decision making −

There are two central assumptions to CDM −

 Better information will lead to better decision-making. Tools and procedures need to
be in place in order to respond easily to changing conditions.
 By sharing information, values, and preferences, team members learn from each other
and build a common pool of knowledge, resulting in decisions and actions that are
most valuable to the system.

30
 What is Total Quality Management?

‗Quality‘ is generally referred to a parameter which decides the inferiority or superiority of a

product or service. It is a measure of goodness to understand how a product meets its
specifications. Usually, when the expression ―quality‖ is used, we think in the terms of an
excellent product or service that meets or even exceeds our expectations. These expectations
are based on the price and the intended use of the goods or services. In simple words, when a
product or service exceeds our expectations we consider it to be of good quality. Therefore, it
is somewhat of an intangible expression based upon perception.

W. Edwards Deming and Joseph M. Juran jointly developed the concept of TQM. Initially,
TQM originated in the manufacturing sector but it can be applied to all organizations.

The concept of TQM states that every employee works towards the improvement of work
culture, services, systems, processes and so on to ensure a continuing success of the
organization.

TQM is a management approach for an organization, depending upon the participation of all
its members (including its employees) and aiming for long-term success through customer
satisfaction. This approach is beneficial to all members of the organization and to the society
as well.

Total - Made up of the whole.

Quality - Degree of Excellence a product or service provides.

Management - Act, art, or manner of handling, controlling, directing, etc.

Therefore, TQM is the art of managing the whole to achieve excellence.

"TQM is the management approach of an organisation, centered on quality, based on the

participation of all its members and aiming at long-term success through customer
satisfaction, and benefits to all members of the organisation and to society." -ISO

CHARACTERISTICS OF TQM

 TQM is a customer oriented.

TQM required a long term commitment for continuous improvement of all processes.

 TQM is a teamwork.

 TQM requires the leadership of top management and continuous involvement.

 TQM is a strategy for continuous improving performance at all levels and in all areas of
responsibility.

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 Key Principles of TQM

 Customer focus. Central to all successful TQM systems is an understanding that quality is
determined by the customer.
 Employee involvement.
 Centred on process.
 Integrated system.
 Strategic & systematic approach.
 Decision-making based on facts.
 Communication.
 Continuous improvement.

Benefits of Total Quality Management

The benefits arising from the implementation of a Total Quality Management in an

organization are:

a. This will increase the awareness of quality culture within the organization.
b. A special emphasis on teamwork will be achieved.
c. TQM will lead to a commitment towards continuous improvement.
d. Essential requirements for successful implementation of TQM
e. Commitment: Quality improvement (in all aspects) must be everyones‘ job in the
organization. An apparent commitment from the top management, breaking down the
barriers for continuous quality improvement and steps required to provide an
environment for changing attitudes must be provided. Training and support for this
should be extended.
f. Culture: There should be proper training to effect the changes in attitude and culture.
g. Continuous Improvement: Recognize improvement as a continuous process, and not
merely a one-off program.
h. Customer Focus: Perfection in service with zero defects and full satisfaction to the
end-user whether it‘s internal or external.
i. Control: Ensure monitoring and control checks for any deviation from the intended
course of implementation.

PDCA cycle.

Plan

Do

Check

Act

Planning Phase: This phase is the most crucial phase of total quality management. Under this
phase, employees have to come up with their respective queries and problems which need to

32
be addressed. The employees apprise the management of different challenges which they are
facing in their day to day operations and also analyze the root cause of the problem. They
need to do the required research and collect significant data which would help them find
solutions to all the problems.

Doing Phase: In this phase, a solution for the identified problems in the planning phase is
developed by the employees. Strategies are devised and implemented to crack down the
challenges faced by employees. The efficiency and effectiveness of solutions and strategies
are also evaluated in this stage.

Checking Phase: Under this phase, a comparison analysis of before and after is done in order
to assess the effectiveness of the processes and measure the results.

Acting Phase: This is the last phase of the cycle, in this phase employees document their
results and prepare themselves to address other problems

Business Process Reengineering (BPR)

Business process reengineering (BPR) is an approach to change management in which the

related tasks required to obtain a specific business outcome are radically redesigned. An
important goal of BPR is to analyze workflows within and between enterprises in order to
optimize end-to-end processes and eliminate tasks that do not provide the customer with
value.

Business Process Reengineering is not only a change, instead a dramatic change. What
constitute dramatic change is the overhaul of organisational structures, management systems,
employee responsibilities and the use of information technology. Successful BPR can result
in enormous reduction in cost and time. It can also create substantial improvements in
quality, customer service and other business objectives.

Definition of BPR

―Business Process Reengineering is the fundamental rethinking and radical redesign of

business processes to achieve dramatic improvements in critical, contemporary measures of
performance such as cost, quality, service and speed.‖ - Dr. Michael Hammer

History of BPR

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BPR was a very important management concept from the mid-1980s to the mid-1990s. The
concept is generally credited to MIT professor Michael Hammer and Babson College
professor Thomas Davenport. Hammer and Davenport started out as colleagues, working on
a research program called PRISM (Partnership for Research in Information
Systems Management). Their research efforts, which were sponsored by some of the biggest
corporations at the time, involved developing an architectural model that would help large
companies take advantage of recent advances in technology, including personal computers
(PCs) and the internet.

By 1990, Hammer and Davenport had parted ways professionally and published separate
research papers which were later turned into popular books. The business community's
reaction to the kind of radical change advocated by Hammer, Davenport and their co-authors,
James Champy and James Short, was initially extremely positive. A 1993 article in Fortune
Magazine, "Reengineering The Hot New Managing Tool," gives a sense of BPR's swift
uptake, citing BPR success stories at marquee companies ranging from Union Carbide to
telecommunications giants GTE and AT&T.

Technology vendors quickly jumped on the BPR bandwagon and enterprise resource
planning (ERP) vendors such as SAP, JD Edwards, Oracle and PeopleSoft promoted their
products as solutions for the redesign and improvement of business processes and helped to
turn BPR into a multi-billion dollar industry seemingly overnight. Consultants followed the
money too, and suddenly firms that previously promoted their expertise in systems
thinking found themselves in high demand as reengineering experts.

As quickly as BPR rose in popularity, however, so did the backlash against it. Radical
change proved to be expensive and risky, but the most frequent critique of BPR was that it
placed too much emphasis on technology and cost reduction and didn‘t consider how
dramatic change affects people and company culture. By the end of the 1990s, the word
reengineering was being used as a synonym for two practices that were radically impacting
corporate life -- downsizing and outsourcing.

Today, there is a renewed interest in business process reengineering as a framework

for digital transformation. With hindsight, it has become apparent that the concept‘s focus on
radical change can complement process improvement approaches that emphasize incremental
change, such as continuous improvement (Kaizen) or the Total Quality Movement (TQM).

34
The need for radical organizational change
The concept of BPR was laid out in a 1990 Harvard Business Review article, "Reengineering
Work: Don't automate, obliterate" by the late Michael Hammer, a management author and
professor of computer science at the Massachusetts Institute of Technology (MIT). Hammer
contended that the usual methods for boosting performance had failed to yield the
improvements enterprises needed to operate in the 1990s. Product development cycles were
too slow, order fulfillment errors too high and inventory levels were out of sync with demand
at many companies, making large enterprises ill-equipped to succeed in a time of rapidly
changing technologies, rising customer expectations and global competition. Hammer
believed that information technology (IT) failed to improve results in performance or
customer service, because it was simply being used to automate existing, deficient processes.
He saw the need for companies to stop and rethink how technology could be used to create
entirely new processes.

To illustrate the impact of BPR's holistic, rather than piecemeal, approach to process
improvement and IT's role in achieving that, Hammer recounted in detail the reengineering
initiatives undertaken by Ford Motor Company. When Ford took the radical approach of
having employees in the accounts payable department use an online database, it negated the
need for staff to spend time matching paper purchase orders with receiving documents and
invoices. Completely rethinking the purchase process to take advantage of new technology
allowed the company to reduce its accounts payable department's headcount by 75%. At the
heart of this reengineering project was a willingness by the company to break away from
established assumptions about how operations should work, a concept Hammer referred to
as discontinuous thinking.

The principles of business process reengineering

In 1993, Hammer and organizational theorist James Champy published a book to expand
upon the ideas Hammer proposed in his research paper. The book, which was entitled
―Reengineering the Corporation: A Manifesto for Business Revolution,‖ quickly became a
national bestseller. The authors suggested seven principles for reengineering a work process
and achieving a significant level of improvement in quality, time management, speed and
profitability.

1. Organize around outcomes, not tasks.

35
2. Identify all the processes in an organization and prioritize them in order of redesign
urgency.

3. Integrate information processing work into the real work that produces the information.

4. Treat geographically dispersed resources as though they were centralized.

5. Link parallel activities in the workflow instead of just integrating their results.

6. Put the decision point where the work is performed and build control into the process.

7. Capture information once and at the source.

Steps of Business Process Re-engineering

To keep business process reengineering fair, transparent, and efficient, stakeholders need to get a
better understanding of the key steps involved in it. Although the process can differ from one
organization to another, these steps listed below succinctly summarize the process:

Below are the 5 Business Process Re-engineering Steps:

1. Map the current state of your business processes

Gather data from all resources–both software tools and stakeholders. Understand how the
process is performing currently.

2. Analyze them and find any process gaps or disconnects

Identify all the errors and delays that hold up a free flow of the process. Make sure if all details
are available in the respective steps for the stakeholders to make quick decisions.

3. Look for improvement opportunities and validate them

Check if all the steps are absolutely necessary. If a step is there to solely inform the person,
remove the step, and add an automated email trigger.

4. Design a cutting-edge future-state process map

Create a new process that solves all the problems you have identified. Don‘t be afraid to design a
totally new process that is sure to work well. Designate KPIs for every step of the process.

5. Implement future state changes and be mindful of dependencies

Inform every stakeholder of the new process. Only proceed after everyone is on board and
educated about how the new process works. Constantly monitor the KPIs

BPR team member roles

Both Hammer and Davenport agreed on the importance of having a serious commitment from
the top executives of the company and the need to secure buy-in from all departments
affected by the process redesign. Many implementations of BPR during the late 1980s and

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mid-1990s used a team approach that reflected BPR‘s top-down management philosophy.
Such a team might look like this:

Team Leader - a senior executive who has envisioned and authorized the overall
reengineering effort. The team leader is responsible for appointing the process owner.

Process Owner - a senior-level manager in charge of a specific business process. The

process owner is responsible for assembling a team to reengineer the process he or she
oversees.

Reengineering Team - a group that is composed of insiders whose work involves the process
being reengineered and outsiders whose jobs will not be affected by changes in process. The
reengineering team is responsible for analyzing the existing process and overseeing its
redesign.

Steering Committee – a group of senior managers who have championed the concept of
reengineering within the organization and set specific goals for improving performance. The
steering committee, which is led by the Team Leader, is responsible for arbitrating disputes
and helping process owners make decisions about competing priorities.

Reengineering Czar – an individual who is responsible for the day-to-day coordination of all
ongoing reengineering activities. The czar‘s responsibility is to be a facilitator and develop
the techniques and tools the organization will use to reengineer workflow.

Why BPR in the 1990s was a failure

In a 1996 Fast Company article, "The Fad That Forgot People," Davenport blamed BPR‘s
negative press on the excessive power given to third-party consultants who were primarily
interested in cost savings and didn't have an emotional investment in the company. He cited a
pharmaceutical company that went through two major consulting contracts before calling off
its BPR initiative and a large telecommunications firm whose treatment of employees as
interchangeable components only succeeded at alienating the company‘s brightest
minds. Michael Hammer and James Champy also agreed that BPR failed to manage the
effect that radical change would have on people and culture.

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Other factors that heavily influenced success included the difficulty of mapping processes
accurately and working across business silos that made change difficult. IT is a major driver
of most reengineering business processes and the failure of business leaders to align IT
infrastructure with BPR strategies and wisely invest in technology that performed as
promised also raised frustration levels.

Future of BPR
During the early part of this century, BPR was sometimes regarded as simply a business
buzzword of historical interest. A recent emphasis in business on digital transformation as a
way to gain competitive advantage, however, as well as the pervasiveness of the Internet of
Things (IoT) and advances in artificial intelligence (AI) have spurred many companies to
radically rethink their workflows and make technology-driven changes. In the future, it's
expected that business process reengineering will continue to be part and parcel of most
business transformation and enterprise resource planning initiatives.

Common Problems with BPR

1. Process under review too big or too small

2. Reliance on existing process too strong
3. The cost of the change seem too large
4. BPR is isolated activity not aligned to the business objectives
5. Allocation of Resources
6. Poor timing and planning
7. Keeping the team and organisation on target

Case Study – BPR

An American telecom company that had several departments to address customer support
regarding technical snags, billing, new connection requests, service termination, etc. Every time
a customer had an issue, they were required to call the respective department to get their
complaints resolved. The company was doling out millions of dollars to ensure customer
satisfaction, but smaller companies with minimal resources were threatening their business.

The telecom giant reviewed the situation and concluded that it needed drastic measures to
simplify things–a one-stop solution for all customer queries. It decided to merge the various
departments into one, let go of employees to minimize multiple handoffs and form a nerve
center of customer support to handle all issues.

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 A few months later, they set up a customer care center in Atlanta and started training their repair
clerks as ‗frontend technical experts‘ to do the new, comprehensive job. The company equipped
the team with new software that allowed the support team to instantly access the customer
database and handle almost all kinds of requests.

Now, if a customer called for billing query, they could also have that erratic dial tone fixed or
have a new service request confirmed without having to call another number. While they were
still on the phone, they could also make use of the push-button phone menu to connect directly
with another department to make a query or input feedback about the call quality.

The redefined customer-contact process enabled the company to achieve new goals.

 Reorganized the teams and saved cost and cycle time

 Accelerated the information flow, minimized errors, and prevented reworks
 Improved the quality of service calls and enhanced customer satisfaction
 Defined clear ownership of processes within the now-restructured team
 Allowed the team to evaluate their performance based on instant feedback

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