Key Variables to Design a Large-Scale Organizational Transformation
January 12, 2018
There are a lot of different elements that go into designing a large-scale organizational transformation. For the purpose of this exercise and through the eyes of a consultant, there are four areas that need to be explored in relation to this organizational transformation. These areas are human resources, organizational structure, leadership and trust, and performance measures. How these variables are implemented into the change process could prove successful for an organization and help the overall structure of the organization grow. Moreover, lack of attention to detail can prove to be a mistake and cause a change process to fail.
Human Resources Policy
Human resources, in this writer’s opinion, are the glue that holds the organization together. Human resources help enforce and create policy. In addition, they act as front line when anything goes wrong or when a new benefit is introduced or if there is industry change. Next, they assist as change agents when an organizational transformation is taking place. Braun (2013) describes human resources as more of a strategic partner then the old paradigm of paper pushers. In addition, human resources has taken on a higher calling in which it assists with all organizational functions, assist in formulating strategies, develop long-term objectives and formulate plans to help grow a competitive advantage in the marketplace. As a consultant and working with human resources, the goal is to understand change. According to Appelbaum, Berke, Taylor, and Vazquez (2008), change is viewed a dynamic process and can be valued in terms of the scale of a change and which method will be involved. Human resources and the leaders of the organization must take into account how this large scale transformation is going to affect the policies that are in place. For example, will the rewards system be changed from a standard evaluation to a more complex performance management system?
The organization that his writer is referencing is currently going through a large-scale transformation. The reward system and compensation plan was severely leverage and any pay increases have been halted for the last three fiscal years. In addition, many programs and benefits were cut as well to reduce the cost to the organization. These changes in policy were a needed evil to help bring structure back to the organization. This change in organizational policy did cause a lot of employee commitment issues and it was difficult to retain top talent but currently the storm has been weathered and organizations policies and benefits are returning back to normal as new initiatives are going into place.
Understanding how an organization is structured is a key objective for a consult that is assisting with organizational transformation. The consultant needs to understand if the organization is transformational, top down, transactional, growth, mature, global, and local to name a few. Appelbaum et al. (2008) describe transformational change as form of corporate change and can be characterized as a developmental process and is a form of revolutionary change that can be described as a complete re-engineering of the corporate structure. As a consultant, it is important to understand the goals of the organization but also provide solutions and with transformational change comes the need for transformational leadership. Transformational leadership helps with status quo and organizational performance by empowering their employees to do more and lead by example. Wischnevsky and Damanpour (2006) explored organizational transformation and stated that organization transformation is a transition between organizational states that feature structure and strategy. In an effort to assist with re-engineering of the organizational structure, leadership will be encouraged to redefine strategy, redevelopment the mission statement and potentially rebrand with a new logo that sets the organization apart from the old and opens the door to the new era of growth and possibilities.
Within the organization that is referenced in this exercise; transformational leadership is one of their top goals and a culture that they are trying to establish. Unfortunately, they lack the follow through and the organizational learning to continue with the process of culture change internally. Due to high turnover in the leadership positions, developing a culture that will be ingrained in the organizational memory is very difficult.
Organizational transformation cannot begin unless all the needed stakeholders are on board and understand the new mission. Without proper and continuous communication between leaders/managers and their direct reports, the organization will run into resistance to change. The purpose of leadership communication is to bring the stakeholders closer to the organization and give them a sense of belonging and purpose. Brauns (2013) gives examples of how organizational transformation should look like from performance management to rewards keep the employees interest in mind and keeping employees engaged during the change should be goal. For example, the rewards system that is in place needs to express the values of the organization and should send the right message from the organizational perspective. If employees do not understand the value of the rewards or benefits, resistance to change will happen. In addition, performance management needs to be addressed and according to Brauns (2013) consist of the three C’s, consistency, coordination, and control. If leadership can communicate and gain the trust of their organization and followers, this will make large scale transformational more attainable. Without trust, resistance from employees will hamper any change effect.
The organization that is references for the exercise has not done a very good job with this area of change. There seems to be little care of job descriptions or reward during the rebuilding process. Though there are different attempts to bring about transformational change and provide glimpses at transformational leadership, they simply do not have the follow through to continue and make the difference that is needed. Many times, leadership communications is scrambled and/or vague which can cause frustration with employees. It would be recommended that a consistent communication and an often communication be given on the progress of the change process. With the addition of several key leaders over the last six months, stability from within is in the near future.
Performance measures are needed to make sure that the organization is meeting their goals on a large scale but also that their employees are meeting internal objectives. Chen, Yang, and Jiun (2006) researched a performance management system called the Balances Scorecard or BSC. BSC enables businesses to transform its overall strategy and provide effective management and leadership. This is accomplished by addressing four areas of perspective. These areas of perspective are financial, customer, internal, and learning.
Throughout this exercise, internal, customer and learning have been addressed as major components of organizational transformation. Though the financial perspective is not address by name, having a balanced organization and accomplishing this balance through a large transformation is implied.
In the company referenced, they do have their own performance management system though it seems to be very oriented toward internal measure and objectives in which this writer feels are very nonspecific and generic. In addition, with no rewards system in place, a performance management system seems mute. It is this writers recommendation that a small incentive be attached to the performance measurement otherwise the outcome is black or white; either you meet the requirements and keep you job or you are fired. To maintain a productive workforce during the large scale transformational change, leadership is tasked with keeping the organization commitment high and providing excellent communication. Without this guidance of the leaders and according to Appelbaum et al. (2008) the input of the employees, which is deemed a critical factor, large scale transformational change will be difficult to achieve.
Organizations need to change to stay competitive in the marketplace. How they learn and utilize the knowledge that has gained will certainly give them an competitive advantage over their competition. In completing a large scale change, the organization needs to pay attention to the human resource policies, leadership communication, organizational structure and performance management systems. All these areas play important roles in shaping a successful transformation.
Appelbaum, Steven H,PhD., S.P.H.R., Berke, J., M.B.A., Taylor, J., M.B.A., & Vazquez, J. A., M.B.A. (2008). The role of leadership during large scale organizational transitions: Lessons from six empirical studies. Journal of American Academy of Business, Cambridge, 13(1), 16-24.
Brauns, M. (2013). Aligning strategic human resource management to human resources, performance and reward. The International Business & Economics Research Journal (Online), 12(11), 1405-n/a.
Chen, S., Ching-Chow, Y., & Jiun-Yan Shiau. (2006). The application of balanced scorecard in the performance evaluation of higher education. The TQM Magazine, 18(2), 190-205.
Wischnevsky, J. D., & Damanpour, F. (2006). Organizational transformation and performance: An examination of three perspectives. Journal of Managerial Issues, 18(1), 104-128,9.