Managing Organizational Change
2.10 Managing Organizational Change Change management is “a systematic approach to dealing with change, both from the perspective of an organization and on the individual level . . . proactively addressing adapting to change, control- ling change, and effecting change” (Change-Management-Coach.Com, n.d.a). It is “the coordination
The consultant held a series of meetings with the staff to lay out the problem and to discuss possible solutions. These meetings and an accompanying survey revealed the following attitudes:
• Company operating nowhere near its potential (average assessment 46%) • An absence of trust • No incentives in place • No strategy or direction • No one cares (so why bother?) • An absence of information about economic changes
As a consequence of having been asked, the employees’ attitude toward attending workshops and changing the way work was done markedly improved. Land parcels were identified, bids placed, and several bought. The process of getting permits and utilities to the parcels was accelerated. An economic expert was brought in, and the group became educated about how to obtain forecasts and assess what they meant for the business. Alternative strategies were debated and decided and reward systems put in place. The culture was now decidedly collaborative. By mid-year, solid progress had been made, and everyone knew what was expected of them.
Before the transition was complete, however, five original managers, including the acquisitions man- ager, were replaced. The CFO was let go when it was discovered he had no idea how to budget. For six entire months, he had fooled the CEO into believing that everything was on track. Whenever he was asked if expenses were “on budget,” the CFO would say, “Yes,” and people believed him. After about six months, the consultant remarked that costs had skyrocketed and asked, “Is everything still on track with the original budget that was set?” The real answer was “no”: Every month, as costs had outpaced the set budget, the CFO had simply raised the budget to match expenses. Rather than tak- ing action to decrease costs, he had consistently told everyone that things were “on budget.”
Pacifica did double its sales that first year of new ownership, primarily because its culture was turned around. The footnote to the story is that the CEO shrewdly sold the company a few years later, shortly before the real-estate market took a downturn.