Organizational change

Organizational change is, or should be, just one of the processes within the strategy’s frame and company vision. Why then companies have to “struggle” when introducing changes? Why do they need to change? Ever changing environment, markets, products are just pushing the limits of a current stability of the companies and provoke never ending chain of changes.

In his blog Bernard Marr says “a good mission statement articulates the purpose of the company, basically why it exists, what it does and for whom. It should serve as an ongoing guide that spells out what the company is all about. The mission should focus on the here and now.” And where do we see a necessity for a change that a company should follow? In “a vision statement where the goals and aspirations for the future are outlined. It creates a mental picture of a specific medium-term target and should serve as a source of inspiration.”

But are these definitions enough to smoothly drive a change? Company’s organizational culture, as described in the previous blog: “Organizational culture and martial arts,” is the sum of values and rituals defined by rules. It is also a part of a “bigger picture” that surrounds an organization and each of us, as I explained in my TedxTalk. And these substances present difficulties or even block a change. Employees of a company, as others, are perceiving stability as security therefore opposing changes. Consequently, a permanent conflict prevents a peaceful process of change.

Knowledge - the main driving factor of productiveness

In modern economy, an insight, based on explicit and tacit knowledge and the wisdom are the main driving factors for value-added creation and sustainable growth. With appropriate understanding and the allocation of resources Violeta Bulc (innovator, entrepreneur and founder of Vibacom Ltd.) describes how the creation of added value in a company can be defined as a progression of different evolutionary stages in the business environment.

In the book “Rhythms of business evolution, systems, tools and experience for brainstorming” Bulc bases her ideas on four phases. The first one begins with the most fundamental “working environment”. At this stage companies are mostly focused on production and activities. Machines (equipment) are very important; the labor force can be relatively easily replaced, so they should be obedient and diligent in maximizing the output at the lowest costs possible.

The second phase is a “learning environment”. The productivity becomes a factor of input. New resources and knowledge start to play a major role as quality is introduced. Knowledgeable workers become of core importance. Those who have knowledge - employees, leaders, managers - create the conditions for further growth and differentiation on the market.

Control and Reward

“People work predominantly for a reward”. Many MBA students hear and then use in order to control workers’ performance.

Motivation is an enigmatic thing. In different types of organizations managers all around the world struggle to motivate employees to get the best out of them.  And this is a crucial activity on all levels of an organization.

Being a boss does not necessarily mean being a good leader or motivator. There are countless examples reporting intolerable task masters, or ultimate micro-manager, or even horrid manager thus creating a horrible work environment... and the list goes on and on. This kind of a boss is definitely not favored by employees and no motivation comes from him/her. Instead, workers are deeply demotivated by injustices, emptiness of demands, inconsistencies, lack of transparency, self-importance, arrogance, superiority, miss-communication, or even management incompetence. They just try to survive. Still, some of these bosses climb the current Forbes 400 list.

Leadership and “happy” organization

Have you ever wondered what the ultimate goal of an organization is?

Today’s management will conclusively respond that organization strives to achieve only one ultimate goal: to become a profit oriented “machine”. That is why the key device of modern management is in lowering costs: pushing on suppliers’ side, on employees, on product development and production, to name just some. But is this “ceteris paribus” solution, focusing only on one parameter and all other things being equal or held constant, sustainable in long term? Or it spirally aims down and not up? Cost reduction – instead of cost optimizing in an economic system causes the only possible outcome – less money in circulation. The customers are also reducing and optimizing their costs according to their income.

How often have we heard that people are the biggest asset of a company? They, on the other hand, are costs. If they work, they produce cost, if they attain a training program it is again cost, if they visit a customer ... costs. How differently people are treated from tools that for us represent the investment. But the smallest football club in the league knows that buying a player is not a cost – it is an asset, an investment. And they treat him accordingly. Not so in many modern companies. By, among other things, ignoring this, leads us to risky situations far away from the business objectives. There is a Gallup-poll of a 1.5 million sampling, and the result is: 30% of employees are happy with their managers, 20% are not, and 50% have disengaged themselves in having any feelings at all.