Sunday, October 03, 2010
I have always been amazed that each organization in which I have been employed has had its own distinct culture. Furthermore, I have been dumbfounded at the reluctance of those same organizations to change even in the face of strong evidence that their current culture is a major impediment to their future success. Even when organizations have acquired a completely new management team in the “C” suite, change can not only be difficult, it can sometimes impossible. Consider a large $1 billion bank I worked for located in the mid south and surrounded by a vast oil producing economy for the better part of the 1930’s to the 1960’s. By the mid 1980’s however, much of the oil had been removed and while still an important part of the regional economy, oil was no longer the major force it once was. Nevertheless, the marketing philosophy of the bank was a continued focus on the few clients connected with oil and the supporting industries associated with oil production. At the same, it ignored new businesses that had entered the area including an auto manufacturing plant, national trucking and transportation organizations, a larger military base, the city’s emergence as a regional medical center, and the spread of consumer banking.
General Motors is often quoted as an illustration of organizational inertia. Even after it recognized productivity issues between itself and its Japanese competitors in the late 1970’s and even after it entered into a joint venture with Toyota, GM failed to adopt world-class production methods. In the 1980’s, while Chrysler and Ford were making significant productivity gains, GM became less productive. Ironically, many of the productivity and quality control measures put in place by the likes of Toyota were originally developed by W. Edwards Deming and his cohorts during World War II in an effort to defeat the Japanese. After the war, Deming went to Japan to help them rebuild their war torn industrial base. So some of the very same techniques GM used to support war production from 1941 to 1945 were shared with that very adversary, which then became one of GM’s prime competitors.
In their 2005 paper titled, “The Red Queen, Success Bias, and Organizational Inertia”, William P. Barnett and Elizabeth G. Pontikes, argue that, “… significant change especially disrupts well-developed organizations, those that have established the roles, routines, know-how, structures, and technologies necessary to perform certain kinds of activity”. Can it be that change is threatening? Yes, it is virtually part of human nature to be threatened by change, especially organizational change. Will I lose my job, be demoted, lose my corner office, parking space, will I have to relocate or report to some new jerk down the hall? With change comes the unknown. Even small changes can create an unnerving feeling that something is just not right. Chen-Yi Tsaia, Julia L. Linb, and Shih-Chieh Fangc state that organizations are continuously changing as they respond to threats while at the same time they are resisting change. This in turn creates a “Paradox of threat” in which some threats are “real” while others are only “perceived”.
Dave Edwards, college union director, California Polytechnic State University writing for the January, 2007 Bulletin, a publication of the Association of the College Union International points out the number “1” in his “5½ things leaders must know about proactive change management”, is “Communicate, communicate, communicate!” And his number 5 ½ on his list is “Communicate more!”
Clearly for an organization to survive, it must change, however, it must collectively overcome the threat, real or perceived that exists in the eyes of everyone from the corporate office to the loading dock. I have often been privy to debates on what, when, how, and how much to culminate. Usually my organizations have under estimated the workforce’s ability to handle frank and honest communications. The result being that greater mis-trust was generated due to a lack of communications. Unfortunately, by the time the organization realized what damage was it is often too late.
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