Article by Hans M Verheijke,
Founder and Chairman of the Business Performance Academy.
Two examples from our current projects have shown:
The effectiveness of change management processes and the associated leadership improvements depend on behaviour of the leaders. In some companies, leadership programmes in times of reorganisation lead to a huge increase in motivation and company performance. In other companies, precarious situations are made worse. Demotivation, increasing worker dissatisfaction and stagnation are the result. With a targeted “explosion management”, this danger can be avoided and the company equipped for future success.
In challenging times like these, few companies are able to avoid a change in direction or a complete restructuring. Some companies even end up in a spiral of reorganisations in order to keep up with rapid developments. It’s not uncommon for workers to then fall by the wayside. Not just those who lose their jobs, but also those who remain with the company.
A huge responsibility falls on the management. It has to guide workers and teams through the challenging phases, help them deal with the uncertainty and even raise motivation and performance. Rallying calls alone are not enough. Strategies are needed which energise, bolster and strengthen self confidence.
Again and again in our project work, we see that almost 90% of reorganisation measures or fusions are concerned with strategies and structures. Work is done at top management level. But what happens about implementation? Is the reorientation communicated? How are the workers brought on board? Few of the change managers have answers to these questions. Once the planning phase is complete and the new structures have been developed, many managers feel that their work is done. But the real and most important work is just beginning: the rest of the workforce has to be made interested in the innovations and plans and motivated to carry them out.
Company changes are rarely welcomed with open arms. Workers have often had bad experiences with change processes and have developed a negative stance towards them. Conversations between workers are marked by statements such as “ They’ve come up with another new idea, but it’ll soon blow over,” or “They’re always coming up with something new”.
These reactions are understandable. Usually, reorganisation measures are worked out by a small management group without bringing all the workers on board. Lack of transparency and communication and an authoritative leadership style don’t allow identification with the realignment to form.
The process of “cultural implosion” starts and spreads. Workers who react to changes with ignorance, reluctance or rejection create a vacuum at the heart of a company which is almost impossible to fill later. Fear and insecurity pervade. In times of change and reorganisation, people think of themselves first: what does it mean for my job? Will I get a new boss? Will I be transferred or even sacked?
Insecurity and self-centredness have a strong effect on work and results. Motivation decreases, productivity falls, defensive behaviour is encouraged. Workers act cautiously and reticently. Instead of increased initiative, which is what is needed, ideas are held back to prevent more unquiet. Communication and the flow of information within the organisation stagnate and changes are not carried through. Instead of problem solving thinking and action directed negotiation, a feeling of doom and reactionary behaviour set in. Fellow sufferers are sought out for collective moans, the “cultural implosion” strengthens.
Inclusion of workers as a success factor.
In 2009, the Hay group did a worldwide study of a million people. The study showed that, under current economic conditions, top companies increase the involvement of workers. The growth in turnover in these companies is 4.5 times greater than in the stragglers in this area.
They have realised that personal motivation is the key to setting a change process in motion. This requires from top managers specific competencies which go beyond the traditional more controlled management.
With a reorganisation, enormous energy is released within a company. The effects can be inward (implosion) or outwards (explosion) depending on the specific contribution of the top management. A lack of clarity in strategic decisions and outdated leadership styles increase insecurity and lead to the energy being directed inwards.
A targeted development of leadership competencies can counteract this. The goal of such a Leadership Development Programme has to be to convey “top down” strategic decisions in such a way as to markedly increase motivation, effectiveness, solidarity and company performance. Instead of implosion management, explosive management or connective management is needed.
Crisis management is “good people management”. The degree of passion people develop to collectively back new strategies is crucial as are the managers’ competencies. They have to enthuse the workers with out of the ordinary performances, ideas and calculated risks. Alongside strategic factors, they have to be aware of the emotional sensitivities of their workers and take individuals seriously
Affected workers - at all hierarchical levels - also need psychological boosting, in order to navigate the stormy waters together. Using targeted leadership intervention, managers become competent in mastering this difficult task. At this point they reflect on their own leadership behaviour and are sensitised to the challenges and tasks ahead. Managers have an important task: they are not just strategy implementers; they are also role models and coaches for their workers. They have to manage the change in such a way that productivity and motivation actually increase. They have to ensure that the top people stay on and that they don’t regard the company as a sinking ship and leave. They have to force active talent management, which further strengthens and develops colleagues’ strengths. Doing instead of moaning; participant instead of victim; we instead of I - that must be the motto in turbulent times.
A captain and his officers alone cannot navigate a ship through a storm. But a team that sticks together and in which everyone has a place and a recognised and appreciated task to fulfil will safely steer the ship through the shallows. If the sails are properly set at the right moment, it will move on. Full steam ahead.
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