CONSULTING AND CHANGE

Change is the raison d’être of management consulting. If diverse consulting assignments have any common characteristic, it is that they assist in planning and implementing change in client organizations. In Chapter 1, organizational change was mentioned as one of the fundamental and generic purposes of consulting. Organizational change, however, is full of difficulties and pitfalls. In managing change, consultants and clients tend to repeat the same mistakes. Often the very behaviour of those who strive to make changes generates resistance to change and brings the whole process to a standstill. The need for change is recognized, yet there is no change. To avoid this, every management consultant needs to be aware of the complex relationships involved in the change process, and must know how to approach various change situations and help people to cope with change.

This chapter is particularly important for understanding the nature and methods of consulting and of the consultant–client relationship. Throughout the chapter the consultant’s point of view and intervention methods will be emphasized. However, they will be reviewed in the wider context of changes occurring in society, in organizations and in individuals, and related to the managers’ roles in initiating and managing organizational change. The chapter provides some notions of the theory of organizational change, and also practical guidelines for planning and implementing changes.

4.1Understanding the nature of change

The concept of change implies that there is a perceptible difference in a situation, a person, a work team, an organization or a relationship, between two successive points in time. How does this difference occur, what are its causes, and what does it mean to a manager or a consultant? To answer these and similar questions, we will first look at the various levels and areas of change, and at the relations between them.

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Environmental change

There is nothing new about change: it has always been a feature of the very existence and history of the human race. Without change there is no life, and human efforts to obtain better living conditions imply coping with change. There is a new phenomenon, however: the unprecedented depth, complexity and pace of technological, social and other changes occurring at present. Today’s organizations operate in an environment that is continually changing. The ability to adapt to changes in the environment has become a fundamental condition of success and survival in business.

It is not the purpose of this chapter to analyse current development trends or predict future changes in the business and social environment. Other publications are available that attempt to do this from various angles. They show that today the processes of change concern all aspects of human and social life, both nationally and internationally.

In a particular business or other organization, the practical question is what to regard as its external environment. This question is increasingly difficult to answer. Often managers are totally perplexed when they realize that their organization can be affected by forces – economic, social or political – which they would previously never have considered when making business decisions. Competition can come from sectors and countries that in the past were never thought of as potential competitors. New sources of finance and new ways of mobilizing resources for business development and restructuring have required profound changes in corporate financial strategies. New information and communication technologies have permitted many new ways of doing business and running complex organizations that were unthinkable with old technologies. Environmental considerations, increased mobility of people and changing social values have created new constraints and new opportunities for decision–makers responsible for running business firms.

This is where management consultants can step in to render an invaluable service to their clients. Making clients aware of the complexity and dynamics of environmental changes and of new opportunities provided by them, and helping them to react to these changes promptly and effectively, is currently the most important and forward-looking area of management consulting.

Organizational change

Organizations are continually forced to adapt to the environment within which they exist and operate, and to react to new environmental changes, constraints, requirements and opportunities. But more than that, businesses and other organizations also generate changes in their external environment, for example by developing and marketing new products and services that capture a significant part of the market, launching and publicizing products that will change consumer taste, or pioneering new technologies that become dominant and change the shape of whole industrial and service

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sectors. Thus they modify the business environment, both nationally and internationally.

Change can affect any aspect of an organization. It may involve products and services, technologies, systems, relationships, organizational culture, management techniques and style, strategies pursued, competencies, performances, or any other feature of a business. It can also involve the basic set-up of the organization, including the nature and level of business, legal arrangements, ownership, sources of finance, international operations and impact, diversification, and mergers and alliances with new partners.

Change in people

The human dimension of organizational change is a fundamental one. For it is the behaviour of the people in the organization – its managerial and technical staff, and other workers – that ultimately determines what organizational changes can be made and what real benefits will be drawn from them. Business firms and other organizations are human systems above all. People must understand, and be willing and able to implement, changes that at first glance may appear purely technological or structural, and an exclusive province of higher management, but which will affect the working conditions, interests and satisfaction of many other people.

In coping with organizational change, people have to change, too: they must acquire new knowledge, absorb information, tackle new tasks, upgrade their skills, give up what they would prefer to preserve and, very often, modify their work habits, values and attitudes to the way of doing things in the organization.

It is important to recognize that this requirement relates to everyone in an organization, starting with the most senior manager. Those who want their subordinates and colleagues to change must be prepared to assess and change their own behaviour, work methods and attitudes. This is a golden rule of organizational change.

But how do people change? What internal processes bring about behavioural change? Many attempts have been made to describe the change process by means of models, but none of these descriptions has been fully satisfactory. Different people change in different ways, and every person has particular features that influence his or her willingness and ability to change. The influence of the culture in which a person has grown up and lived is paramount, as will be explained in Chapter 5.

A useful concept of change in people was developed by Kurt Lewin.1 It is a three-stage sequential model, whose stages are referred to as “unfreezing”, “changing” and “refreezing”.

Unfreezing postulates a somewhat unsettling situation as it is assumed that a certain amount of anxiety or dissatisfaction is called for – there must be a need to search for new information if learning is to take place. Conditions that enhance the unfreezing process usually include a more than normal amount of tension leading to a noticeable need for change – for example, an absence of sources of information; removal of usual contacts and accustomed routines; and

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a lowering of self-esteem among people. In some instances, these preconditions for change are present before the consultant arrives on the scene. In other instances, the need for change is not perceived and has to be explained if unfreezing is to occur – for example, by making it clear what will happen if the organization or the person does not change.

Changing, or moving towards change, is the central stage of the model, in which both management and employees start practising new relationships, methods and behaviours. The subprocesses of changing involve two elements:

–identification, where the people concerned test out the proposed change, following the external motives presented to them (e.g. by management or a consultant);

–internalization, where individuals translate the general objectives and principles of change into specific personal goals and rules; this process may be quite difficult, usually requiring a considerable effort by the person concerned, and a great deal of patience, creativity and imagination on the part of the consultant in assisting the change, to convert the external (general) motives to internal (specific and personal) motives for accepting the change proposed.

Refreezing occurs when the person concerned verifies change through experience. The subprocesses involved require a conducive and supportive environment (e.g. approval by responsible management) and are usually accompanied by a heightening of self-esteem as a result of a sense of achievement derived from accomplishing a task. During the initial phases of the refreezing stage it is recommended that the required behaviour should be continuously reinforced by means of rewards, praise, and so on, to encourage and accelerate the learning process. In the later phases, intermittent or spaced reinforcement will help to prevent extinction of the newly acquired behavioural patterns. Eventually the new behaviour and attitudes are either internalized, or rejected and abandoned.

Change in a particular person takes place at several levels: at the knowledge level (information about change, understanding its rationale), the attitudes level (accepting the need for change and a particular measure of change both rationally and emotionally) and the behavioural level (acting in support of effective implementation of change). Figure 4.1 shows four levels of change: (1) in knowledge, (2) in attitude, (3) in individual behaviour, and (4) in organizational or group behaviour. The relative levels of difficulty and time relationship are also indicated in the diagram. This, however, does not imply that change must always start at the lowest level and proceed to higher levels (see box 4.1).

Change in individuals within an organization is also directly affected by changes in the external environment. This environment is not something that “starts behind the factory gate”, but permeates the organization. People “bring the environment with them” and it stays with them when they come to work. Thus, changes occurring in the environment of an organization may facilitate or hamper change in people working within the organization. A frequent problem is that of individuals who are simultaneously exposed to so much change and stress, at work and in their social and family life, that they are not

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