There can hardly be a manager in existence who has not been constantly reminded over recent years that the rate of change is increasing at a frantic pace. And yet, for all the rhetoric, there must be many who question this. Sure, people probably work harder as a whole than they did a generation ago and they certainly have smaller empires. But companies still look pretty much how they have always done since the end of the Second World War. Reassuring as all this may be to those intent on not changing their ways, it is, however, wrong. The business scene is replete with examples of how the environment is changing – and fast. Competitors are no longer just those that would have been identified only a few years ago and markets are no longer configured how they were. Globalisation, the Internet and the development of large trading blocs such as the European Union are creating a situation in which it is impossible for one company to opt to be a regional player. Essentially then, much of business – and many of those who work in it – are in a state of denial. No matter how they might protest, they tend to see change as bad – something to be coped with – hence the phrase “change management”. They might as well talk of “change containment”. A major component of the change environment is that brand new companies are springing up all the time, often using leading-edge technologies. These companies are much more flexible and enterprising than the old behemoths. Chief executives of organisations such as Shell, IBM and ICI can be as entrepreneurially-minded as they like, but actually translating that attitude into something different about the way that they do business can be impossible. As John Pendlebury, Benoit Grouard and Francis Meston of the consultancy AT Kearney write in their book The Ten Keys to Successful Change Management (John Wiley & Sons), businesses which have “most fully perfected their organisation and systems generally have the greatest difficulty in changing. Their very perfection makes them rigid.” And it is perhaps this, more than anything else, that has led to the inertia among companies and to the search for something more powerful among the various consultancies convinced that it is only by changing that businesses can assure their survival. Various thinkers have gone back to nature and come up with ideas relating to self-renewal and evolution. But the idea that seems to have been most widely settled upon is “transformation”. This is appealing to consultants because it sounds much bigger and bolder than mere change. Much like business process re-engineering, it implies blank sheets of paper and the sorts of grand new visions and strategies that chief executives like to talk about at results announcements. And, as a way of galvanising companies, it has had certain successes, as Paul Taffinder of PricewaterhouseCoopers sets out in his recent book Big Change (John Wiley & Sons). The subtitle makes clear his intent: to provide “a route-map for corporate transformation”. And, like The Ten Keys to Successful Change Management, it is loaded up with practical examples of how companies have gone about this momentous challenge. But for all its ability to harness the energies of senior executives, transformation does have an important weakness: it implies that it is a one-off process. And, of course, what is really required is an ability to embrace change, to respond to it and to anticipate it. This is one of the many tricks that has made US companies 3M and Hewlett-Packard so successful. It is surely no coincidence that it is becoming increasingly hard to nail down exactly in which sectors they operate. As Pendlebury & co point out, it is still rare to find a business that has successfully institutionalised change. But at least the Kearney team and Taffinder acknowledge that, while the drive may need to come from the top of organisations, involving the rank and file is vital for success. This is simply because putting in place systems and the rest does not encourage future change; it just alters things compared with how they used to be. Only by inculcating a sense within employees that nothing is set in stone will organisations be able to move towards the flexibility and responsiveness that is required to thrive in a constantly changing environment. Peter Ellwood, chief executive of the increasingly highly regarded Lloyds TSB Group, is honest enough to put at least part of the blame on the shoulders of executives who “have insufficient imagination” to identify ways of unleashing the innovative talent of their employees. HP and 3M have long acknowledged that their people are the key to their success; others are only just starting to talk about this, let alone believe it. But the development of such concepts as “open-book management” – under which employees are given a great deal of information about their companies in return for taking on increasing responsibilities – is indicative of the way things are going. And by making it clear that transformation is dependent upon gaining the participation of all employees rather than something that is driven through from head office, Taffinder and his counterparts at AT Kearney have made an important contribution. All that’s needed now is a little action. Reader Offer: Readers of Financial Director may order a copy of Ten Keys to Successful Change Management or Big Change at £14.99 each, a 25% discount. Please add £2.95 p&p for single-copy orders (p&p free if ordering 2 or more books; also see page 36). Please quote reference M001H. Offer ends 31 December. To order, please contact: Customer Service M001H, John Wiley & Sons, 1 Oldlands Way, Bognor Regis, West Sussex PO22 9SA; Tel: (01243) 843294; fax: (01243) 843296.
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