Consulting in company transformation

Overcoming resistance

To cope with resistance to change, the consultant and management have to start by creating discomfort and dissatisfaction with the existing situation. Changing the mind-set of the key players in the organization generally requires a strong jolt of some kind. Pressures from inside and outside the organization can effectively promote awareness of the need for change. Creating a shared mind-set characterized by collective ambition, commitment, motivation, a sense of urgency that some form of action is needed, and an external focus is critical to start the transformation.

The next move is to create hope for something better in the form of a new vision and mission, in order to break the vicious circle of despair. It is the leaders, with help from consultants if necessary, who should identify the challenges faced by the organization, point out the source of the distress, and clearly present the negative consequences of a failure to act. Benchmarking with other organizations is a good way to illustrate performance gaps and their consequences. As a buffer against excessive stress, leaders must present a viable alternative to the existing situation. At this point drawing up an action plan is crucial so that staff can perceive the change programme as something realistic.

To create awareness and support for transformational efforts and to implant a strong message that “something is deadly wrong in this company”, Gary Hamel proposes that an “insurrection” should be started in the following way.3

1.Establish a point of view. It should be powerful, credible, coherent, compelling, and based on data, speak to people’s emotions and have a clear link to the bottom line.

2.Write a manifesto. You need it to pass on your idea to others. It must capture people’s imaginations, and provide a vision and hope.

3.Create a coalition. Build a group of colleagues who share your vision and passion. It is easy to dismiss corporate rebels when they are fragmented and isolated.

4.Pick your target. Identify and target a potential champion – someone who can yank the levers of power and get the support of senior management.

5.Coopt and neutralize. You need to disarm and coopt opponents, not demean and humiliate them.

6.Find a translator. You need someone who can build a bridge between you and the people with the power.

7.Win small, win early, and win often. None of your transformational efforts is worth anything if you cannot demonstrate that your ideas actually work.

22.3 Strategies and processes of transformation

Organizational transformation can be slow, incremental, evolutionary and peopleoriented, or rapid, revolutionary, dramatic and company-wide, with economic performance as the first priority. Different approaches require different

495

Management consulting

transformation strategies and consulting approaches. The consultants’ role is to facilitate the process and to be a resource.

Although consultants come with certain values and ideas about what makes an effective human organization, they should not recommend a corporate-wide programme through which top management should implement their ideas. They should rely rather on stimulating and supporting the process of discovery and learning. If beliefs and values need to change, if change emerges from employee participation in solving problems, and if the objective of change is to create a learning organization, then large consulting firms delivering elegant packaged solutions will not always succeed. Process consultants, who do not come with prefabricated solutions, can lead managers and other employees through a process of gradual analysis, redesign and change.

Some useful principles

Today there is renewed interest in organizations that are organic, flexible, agile, or “reconfigurable”. Their structure consists of a stable part and a variable part. The stable part consists of “homes” for specialists in functions, which also host generalists on rotating assignments. The variable part of the structure consists of mechanisms and networks integrated across the functions, for example, cross-functional teams used in most companies today. Such organizations can be easily adjusted to incremental changes.

The larger and the more radical the transformation projects, the greater the likelihood that the client organization lacks the requisite implementation skills, managerial consensus, and motivation to change. A better alternative to these highrisk mammoth consulting undertakings is a model based on a series of rapid-cycle sharply focused projects. Each one will yield some measurable return while also expanding the client organization’s capacity to learn and carry on subsequent change.

To implement such focused and modest projects, dozens of interrelated changes need to be realized in an integrated and coordinated way. While the consulting team might help to make some of the technical changes, they will be able to assist with only a small number. The rest will have to be identified and carried out by the organization itself. In this way, the company starts to learn. The first and most common way is to start the change with rationalization, by instilling more discipline and support, then moving to revitalization by spreading the action and building trust, and finally moving on to regeneration. The second way is for the company to start with more integration and then to move to regeneration. The third – and the most difficult – way is for a company to go straight to regeneration (as General Motors did) trying to balance discipline, support, stretch and trust.

When dealing with large-scale, radical changes in a turbulent environment the consultant may help to put the following key elements in place:

●Pattern-breaking, to free the system from structures, processes, or functions that are no longer effective or useful; to eliminate dysfunctional patterns of behaviour to allow new learning and new options.

496

Consulting in company transformation

●Experimenting, to generate new patterns better suited to the present environment, by providing direction, generating commitment, strengthening bonding and cultivating support.

●“Visioning”, to choose a new perspective around which the system can be reorganized, to generate alignments, cultivate mutual trust and encourage commitment.

●Bonding and attunement, to harmonize members to move the system towards new ways of doing, thinking and learning. This could yield more options and choice, provide flexibility and encourage openness.

The following conditions are the most important ones for transformation; if they are not already present, they should be created:

–Shared vision and strategy for transformation. These should define business requirements, outline expected results, link technology clearly to the achievement of business objectives, and provide a plan for achieving results.

–A breakdown team to manage the transformation process. Appoint a group of people that has the mandate, skills and vision to manage the changes, as well as the resources to drive the restructuring.

–Empowerment of line managers and staff to make change a bottom-up process that drives decision-making down to the lowest managerial level.

–Partnerships between technical and business specialists. Mechanisms must be in place to optimize overall results rather than those of individual procedures or departments.

–Innovative procedures, institutionalization and reinforcement of results. Employees must acquire new skills, job knowledge and procedures as well as develop new mental models.

The greatest opportunities for improvement are often found in the “white spaces” between functions. It is important to identify and concentrate on critical processes, which have a strong impact on total organizational performance. All non-value-adding activities such as the movement of materials and other physical assets should be kept to a minimum or eliminated because they add cost without adding value. Process management, as a major concern in improving company operations, ignores functional power, hierarchy and bureaucracy. It concentrates on horizontal integration to reduce costs and improve quality, service and speed, and focuses on the whole process, working backwards from output or sales to decide which actions and functions are required. The basic objective of process management is to take a holistic view of the process and align the whole value chain to provide a high level of customer satisfaction, achieve the best possible performance, and increase competitiveness.

Before making judgements about the transformational strategy, both consultants and managers need to understand clearly where the company is in its business life-cycle and its development sequence – in evolution or

497

Management consulting

Figure 22.2 Linkage between transformation types and organizational conditions

Source: J.G. Hamel: Leading the revolution (Boston, MA, HBS Press, 2000), p. 18.

revolution. In Leading the revolution, Gary Hamel4 illustrates relationships between different types of changes starting with continuous improvement (the evolutionary approach) and going to business concept innovation (the most radical, revolutionary approach) when the whole system is to be fundamentally changed (figure 22.2).

The most difficult problems arise when large mature organizations are to be transformed. Despite the fact that many of these attempts fail, there are companies that provide good examples of transformational efforts. The experience of these companies provides some lessons that are of interest to consultants intervening in similar organizations. Here are a few hints on how mature organizations approach successful transformation:

●They renew by instilling a customer perspective and focusing on customer demands. Competitive advantage comes from understanding and meeting customer needs in unique ways. Hewlett Packard did this by incorporating internal and external customer satisfaction into its performance appraisal system.

●They renew by increasing their capacity for change. To experience renewal, business cycle lengths must be reduced and capacity for change increased.

●They renew by altering both the hardware (strategies, structures, and systems) and the software (employee behaviour and mind-set). Transformation comes only when new hardware is supported by appropriate software.

●They renew by creating empowered employees who act as leaders at all levels of the organization. They become leaders by having influence and control over the factors that affect their work performance and possessing the necessary competencies.

498