Leadership in Change
As a new comer to the corporate arena, I was surprised to see that it was more like a love and hate game between faceless companies caught up in the bidding war to obtain new clients than a building full of people hired to complete specific tasks or roles. Naïve to the essence of corporate lifestyle, I found myself beset by challenging tasks and learning how to play the ambiguous role of ‘new hire’. My new company, a privately owned disease management company, was only too pleased to throw me into an orientation about my role, and train me in the proprietary tools, GUI interfaces, and software.
In turn, I found myself learning about this company’s corporate culture and organizational structure. As a privately owned company there were no stockholders, and an adequate budget had been set aside to train and encourage its employees to feel vital to the best interests of the company. This drive by the company to fine tune its employees’ skill sets served multiple purposes. It motivated, empowered, and inspired employees to partake in meeting the goals and aspirations of the company mission statement. With little to no warning, layoffs occurred as a company (“Company Takeover”) seeking to rid itself of one of its competitors while acquiring the capabilities of the different programs and products offered within my company acquired my company (“Company Acquired”). Offset by the sudden turn of events, I was intrigued by my first opportunity to see a acquisition upfront.
Initially upon starting at the private company, Company Acquired, I felt and saw that the company had a tendency to determine what motivated each employee to come to work each day. Managers inquired about my individual goals, and the answers I provided to surveys lead to my receiving projects or tasks that interested me. I found this emphasis on individual aptitude and interest to be key to my work ethic. Because of my interest in producing high quality work in an impressively short period of time, my managers quickly promoted me to a lead position. At this level, I saw an interplay between manager and general employee levels. This interplay was focused on team morale and regular informal feedback on individual performance and expectations in completing projects. This environment in some ways felt like a social unit with a family-like aura .
When the company was acquired, and made into a public company lower level employees experienced a company that was apparently mindful of how the satisfaction of employees’ factors into its market capitalization. As a manager I failed to see this in the middle management level. I recognized that the CEOs of Company Takeover had acquired our company in order to grow as rapidly as possible. It now became the new company’s responsibility to deal with subsequent compliance issues via Sarbanes-Oxley (SOX) audits. Managers were now faced with ensuring that all compliance within the once private company matched its new parent companies and governmental regulations. Depending on your rank or seniority level within the company, you might experience different attitudes from your company during this period of change.
The low level employee within a publicly owned company might find a company which is making it a priority to understand and recognize that an employee’s well being needs to be a priority because the red tape might not be so apparent. Where the regular employee might have seen a company concerned about turnover and employee retention, I saw a company conniving to hire employees who had worked only at public company and who expected lesser salaries and company perks than what had been offered at a private company level. Where the private company had focused on hiring permanent personnel, the public company began to bring in temporary contract workers. They obtained these workers in order to ensure that less benefits were being spent in their workers, and those permanent employees already on board recognized that this new environment was for the sole interests of the company. In addition, off-sourcing of some help desk positions to India were occurring which created friction between new managers and their retained employees.
At my level, I found some of the changes to incremental in nature; whereas others were task aligned. At first the company, focused on the divisions which created the most revenue for the company. With profit as its key focus, this change was drilled down into how the systems were performing and how analysts loading data into a data warehouse were performing effectively and efficiently. The data was cleaned and scrubbed using sophisticated software such as SQL analyzer, and this IT division was informed that it was non-expendable. Because the IT division was what created the revenue for the company, this division was quickly reorganized after the directors who were in the private company were offered severance packages. The new directors were connected in some aspects to the new public company and were aware of both the old environment as well as the new corporate culture. A command-and-control organization was being created where new employees were being trained in voids being left by skilled workforce (Beer, Eisenstat & Spector, 1990. p.14 ).. In some ways they were like mediators and socially apt at managing differences in the prior cultural environment versus the current changes. An organizational chart was provided showing how the new IT division reported up to the CEO and CIO, whereas before it reported solely into the CIO. In this way, the CEO had more of an eye towards how the division was performing at all times.
My new public company was swiftly recognized as having quite an easier time getting at capital which aided in its growth of the business. When the quarter passed all employees were provided with quarterly reports indicating how the company had failed. In addition, global profit sharing was offered to permanent employees in an effort to establish congenial relationship with its current employees. The private company had had difficulty establishing capital which lead to its stagnated growth during peak periods felt by employees seeking new software and tools required to perform in their roles. This had lead to a ‘hush hush’ attitude about how the finances and budgeting was occurring. Employees had immediately seen that when a public company is failing to turn a profit and deems cost cutting to be its new focus, downsizing is the automatic procedure. When the down-sizing occurred, task were immediately realigned in an effort to insure less drawbacks and conceal from clients what was taking place. It became a ‘business as usual’ facade, which on a large scale was easy to conceal. On the other hand, my prior private company was much more cautious about its expansions and endeavors so it minimized the drastic need to downsize. Over the last year, new changes and developments have lead to new roles being created and new organizational charts developed to constantly realign the workforce because of the organizational capacity to succeed.
In hindsight, my understanding how organizational capacity played a role in my organization derived from my exposure to how change management affected the divisions with the company. In the privately owned company, the various divisions might have sometimes failed to grasp or account for the activities of other departments. With the current structure, a massive amount of time was invested in streamlining processes. Versus timecards, an electronic time tracking system was put into place to help indicate how many man-hours were required to complete various projects. Budgets and new goals were derived from this information by us merely indicating how long it may have taken to work on a project. This new focus on capability was addressed early by managers at all levels of the organization. The critical path was to coordinate teamwork, build commitment, and increase competencies (Beer, Eisenstat & Spector, 1990. p.12-14). New technology, policies, employee manuals, leadership orientations, and other outreach programs allowed for the company to lent itself to a clearer picture of how the organization needed to be run effectively and with an emphasis in producing quality work. The prior privately owned company had faltered in the face of such organization and had been draining the energy of employees seeking to complete projects with the proper tools, man hours, or motivation. Top management and leadership has been identified as the being means for a company to obtain success during change management (Goodstein & Burke, 1995).
Beer and Nohria (2000:133) exemplify how there are contradictions between the different models and the change strategies and change managers can start with an
advance based on altering the context (economic value theory) and then pursue with changes
based on changing attitudes by employees (organizational capability theory).
Because this chronological approach takes time and effort, they promote an integrated approach, that emphasizes that success depends upon confronting the apprehension between the corporate goals of creating organizational economic value thus creating organizational capability. Our class articles of Christensen and Overdorf illustrated how imperative it is for organization to manage the company through any disruptive changes that might be happening. As our advancements in changing communication, information management, and relationships between the teams was truly concerning, our company attempted to make sure that messages were left on voicemails indicating that no more layoffs were expected and that training on any new proprietary tools would be covered by the new company. This also placed the company with a footing to expect the next round of changes to not be layoff but instead improvements (Beer and Nohria 2000).
As we were not the first company to have been acquired by the pubic company, they were well versed in the importance of providing a united front and adequate communication to their new employees. The drawback to this communication was that they were unaware of our cultural differences. Instead of a family unit with informal communication, the communication was semi-impersonal. This emergence of effective communication was an aspect of dynamic capabilities in which they were adapting to a changing environment by perfecting their communication competences (Grant, 2002, p. 518-519). Furthermore, before the role descriptions were vague about role requirements and responsibilities, but at this newly structured organization individuals had clearly defined job tasks which lead to better coordination between the business units. This became a much better collaboration between the various business units which specialized in product development, clientele interactions, IT implementation, and client support. These outcomes were a rapid yet transparent means to accomplishing an end goal of emerging as the market leader in disease and benefit management.
There were substantial instances where Lewin’s three-phase model, (unfreeze, move or change, refreeze), was being applied. When the severance packages were offered to directors, they were removing individuals who had limited exposure to the system and were simply middle management immersed in creating red tape problems. The company evaluated the tactics and decision making process, and obtained feedback from employees and clients in the overall performance of our products. They decided from an internal stance that new managers were to be hired with particular skillsets which focused on implementation of new software or Avaya/Cisco phone systems. These new managers’ attitudes were already molded from having worked in a public company and learned how to infuse good leadership skills and networking throughout an organization going through change management (Goodstein & Burke, 1995). Reward systems and incentive plans were put into place as a means of creating motivation and instilling a better work ethic. These changes transpired after the company recognized that their system was employee merited, and the changes allowed for internal growth. The outcomes to these changes included global profit sharing, American Express gift cards, training in new software by hiring personnel experienced in training employees, and a special course offered to managers in how to be a good leader (http://www.nvgc.vt.edu/alhrd/Theorists/Lewin.htm), (http://changingminds.org/disciplines/change_management/lewin_change/lewin_change.htm)
It was apparent that Beer’s Six Steps to Effective Change were moderately sufficient and appropriate to this ‘climate’ change. In the article, “Why Change Programs Don.t Produce Change”,. Beer, Eisenstat and Spector steadfastly insist that the foundation behind an organization lies in its ability to develop new attitudes and behaviors on their own. Top executives and managers can then provide rewards or merit raises to those who succeed to meet company expectations. This reward policy can encourage others to change and grow with that change. The end result of this policy will be that some people and divisions within a company will quickly change while others will linger behind stuck in the old ways as others change. Eventually, the long term effect will be more comprehensive and lasting. (Beer 1990). The global profit sharing offered by my company lead to people buying into the stock options as well as demeaning that the new developments had a monetary benefit that was apparent to the every day employee. Psychologically, the changes introduced lead to more acceptance by those more stubborn in the face of the changes. Of all of Beer’s steps, I noticed that the consensus for change was generated via active training of employees and leaders. The company communicated its vision on a regular basis by having the CEO leave voice messages encouraging and emphasizing that he recognized that these changes were difficult to accept but that it was for the best. His strategies were basically being marketed to the employees as a means to having everyone share in his vision.
This CEO and his marketing managers became leaders in this effort to change. Their role was to coax individuals to feel that their efforts were merited in helping continue to grow and support the company. The CEO’s sensitivity and empathic communications revealed the company was attempting to solidify the relationship between the two companies versus isolate the newly acquired one. His carefully selective messages were tuned into the concerns of his new employees. He also encouraged new managers and directors to directly communicate to the parent headquarters any concerns. They were also flown into the parent headquarters for monthly meetings about addressing issues or emerging efficiency in situations. The concept of efficiency has included improving communications in organizations, companies have found that regulating information and utilizing effective tools is equally important to ensuring that this level of efficiency is occurring. Proponents have indicated that effective listening, and empathy for the every day worker enables a strong and optimal flow of information in the corporation (Donnelley, pg. 446-452).
This efficiency itself derived from having (a.) clearly defined and/or specialized functions; (2.) use of set legal authority; (3.) well designed hierarchical structure; (4.) written rules and procedures which were being abided by; (5.) technically trained managers; (6.) promotions to key management roles depending upon a person technical aptitude or experience (7.) career paths that have been clearly defined. Because of the structure of leadership bureaucracy each individual would comprehend their role and where they would expect to develop in their individualized careers which was obvious in Company Takeover. (http://telecollege.dcccd.edu/mgmt1374/book_contents/1overview/management_history/mgmt_history.htm)
Management recognized that with leadership comes responsibility and obviously were taking into consideration Kotter’s Eight Steps for organizational transition. The COE and assorted directors in different capacities recognized that by establishing a sense of urgency in making the teams cooperate and communication they could determine what the best aspects of each organization were. Referred to as ‘best practices’ this incorporated various activities and measures between the once private company and current public one which produced quality work and efficient procedures. This enabled the company to inquire about why certain practices were in place and how best to evaluate what resources and funding might be required for a specific course. Special requirements and implementation teams were put into place as SMEs (subject matter experts) to help guide the newly merged departments. These individuals were experts in particular components of the organization, and known for being able to clearly articulate and develop a strategy which took these ‘best practices’ and put them into play within the corporate units.
Their research was communicated to the leads and feedback was requested to see if any vital information was unaccounted for. Their monthly meetings was documented and placed on the internal website for employees to read or comment on. The teams were then empowered to see that adequate time was being invested during these difficult times, and their efforts were being recognized. Those individuals who were putting in extra hours making sure that servers were properly communicating between the parent headquarters and ours were giving time off to recuperate as a reward for their hard work. This generosity on the part of the CEO generated support and built confidence among new hires that rewards occurred. Short-term this allowed the company to bolster the support it required, but long term it created some disgruntlement because employees were not happy pulling 55 to 60 hour work weeks when more employees were required.
This error led to employees making blunders in configuration changes simply because they wanted to complete the tasks without adequate testing and debugging of errors that popped up. Quality was being compromised in the face of speed. Human tendency is to get over the pain and strife as swiftly as possible, and the company forgot that its employees were being to experience burn out. With such annoyance being experienced and articulated among the every day employee, the company was forced to hire more contract workers which created some animosity from employees concerned about their job security. Though there was more help, when those contracts ended then new contractors started who semi-required training.
This approach as yet to be modified but new permanent employees have been hired in the meantime to ease tensions and per Kotter’s Eight Steps anchored the new techniques towards treatment of employees to psychological and emotionally retain their support.
When discussing the implications of how the phases of change reaction (ending, neutral zone, and new beginning) were handled it is essential to recognize that there are a variety of repercussions which should be evaluated from a technological, psychological, and emotional stance. From a technological perspective, employees felt that the new drive to procure new software and tools was a means to completing tasks effectively, efficiently, and with utmost quality possible. This level of professional interest in using good tools to complete a task instilled a new motivation and interest in employees who had been previously working with outdated software which licenses had expired upon. From a psychological and emotional stance the ending, neutral zone, and new beginning created some agitation and worry on the part of employees unsure of what changes were going to occur when and how those changes would directly impact them. This uncertainty lead to disruption in the workforce and lead to some rumors about potential more downsizing and layoffs.
My overall assessment of the change in terms of its success lies in the firm expectation of the new company to provide adequate training and communication. My success is measured by the fact that more layoffs failed to arise, a new training ground had been created to generate more support in the company, stock options were offered to employees to foster support, incentives such as bonuses were presented to employees who merited the rewards, and finally how employees would actually take the time to listen to the monthly voice mail communication offered by the CEO and respond with feedback if desired. These efforts helped mold the company into a more cohesive unit. The employees felt that their concerns were being addressed and the company was genuinely interested in the scope of any problems or dilemmas being encountered.
Though these were all aspects of success there were obviously drawbacks and areas for improvements that the company still needs to address. The focus on restructuring took place at the IT level with little attention paid to other teams with excessive managers and little actual ‘worker bees’. The compliance team, legal team, and HR teams from the acquired company were at a loss as to their own responsibility. The compliance team found itself at odds with Company Takeover’s policy and SOX audits and sometimes failed to convey to the teams when they were out of compliance. The legal team was slowly dismantled because there was already a good legal team at the parent headquarters. Lastly the HR team was given differing messages as to what their responsibilities were, and employees at Company Acquired were sometimes redirected to the Company Takeover’s HR team for any grievances or concerns. This lead to Company Acquired HR team feeling ostracized and unneeded. Employees who had previously felt comfortable going to their own HR were concerned about the ‘faceless’ HR thousands of miles away who might not address their concerns. Employees at Company Acquired found their 401k investments to be changing as the options offered to them were at the whim of Company Takeover, and the investments had to be switched over.
These were and still are areas for improvement that should be addressed in the face of this emerging and merging new entity. In conclusion, I am a firm believer that change is good when conducted in an organized manner. My company and myself have been experiencing these changes for over the last couple years and it has been a monumental undertaking. For the moment, it is moderately successful because personally I am still standing behind my company as are numerous other supportive employees.
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