“Change is nothing new and a simple fact of life. Some people actively thrive on new challenges and constant change, while others prefer the comfort of the status quo and strongly resist any change. It is all down to the personality of the individual and there is little management can do about resistance to change”
(Mullins 2010: 753)
This blog will discuss about Mullin’s arguments on leadership and change, resistance that’ll come with the change, and the role of managers in overcoming resistance. Moreover, this blog will discuss about Kottler’s management models that is recommended for managers and Lloyds’s CEO as example from finance industry.
All organisations has common primary goal, which is to remain relevant to society and stakeholders in order to have power and relational significance. In order to do so, organization must be able to adapt itself constantly with changing conditions in both of its external and internal environment (Beerel, 2009; Pathak, 2010).
Mullin argues that some people actively thrive for change while others strongly resist them due to the personality of the individual, in which management could not do much about the resistance to change.
Beerel (2009) stated that in general, people dislike change and favor status quo because change creates value tension, which challenge one’s sense of self, value system and create the need to change priority and behaviors. Moreover, it requires high adaptive capacity, which related with one’s alertness, agility, and energy in identifying and responding change. Pathak (2010) summarised factors affecting individual’s resistance toward change as follow:
Figure 1. Factors of Individual Resistance to Change
Source: Pathak (2010)
It is seen that the most influential factors in individual resistance are human characteristics and personal reason that highlight the fear of unknown.
Nevertheless, change in organisational life is inevitable in a progressive culture (Alimo & Alban, 2005). Despite Mullin’s arguments, there are several things that management can do to overcome resistance of change, by understanding the source of resistance and implement strategies to introduce change (Pathak, 2010).
Burnes (2009) summarized how people react to change into stages as follow:
Figure 2. The Changing Curve
Source: Burnes (2009)
Understanding the stages of changes will help manager to understand and support employees in adapting to changes.
The role of Managers in Managing Change
The video from Kotter (2015) above described the roles and differences between change management and change leadership within the organisation.
Change management is needed to ensure:
- Stakeholder agrees the change
- The change process is under control
- The project keeps on budget
Whereas change leadership is about:
- Articulate a vision of future
- Mobilise resources needed
- Put engine on whole change process
While both functions are needed within the organisation, it is clear that a strong leader is needed to be able to manage change in competitive world. This is also supported by Mehta, et al (2014) whom stated that in order to make a change in an organisation to be successful, the presence of transformational leader is essential. The characteristic of transformational leader was discussed in blog 3 (Caddi 2016: Blog 3). Moreover, a leader must be able to lead from the front and encourage change and growth, manage the change effort by ensuring the gap between present situation and future vision is enough to challenge the organisation but not to demoralise the change effort, and ensure that employees find the goals compelling and know how to contribute toward the change (Maxwell, 1996; Jackson, 1997; Hamel and Prahalad, 1994)
One of the models that management can use in leading change is Kotter’s 8-Step Change Process as follow:
Figure 3. Kotter’s 8-Steps of Change
Source: Kotter (2016)
Kotter explained in order to be successful in transforming organisation, strong leadership and support from key people within organisation is essential to continually talk about the vision, and actively build the change and remove barriers.
Managing Change in Finance Industry: An Example
The model above is reflected throughout the success of former Santander UK CEO, and current Llyods Banking group CEO, António Horta-Osório in managing change in his company. In 2008, Santander must make revolution in company to break down their engrained processes and transform them into a formidable retail bank. As the CEO, Antonio worked to ensure that stakeholders understand the value and the reason for the change, ensure forceful and careful management were integrated in the system, process and people in organisation, as well as ensure that all related risks and issues were discussed and mitigated. In order to decrease opportunity of cultural misunderstandings through change programme, those who are directly impacted were fully briefed and prepared for variety of customer responses through transition. As the result, by 2013 Santander UK has become one of UK’s leading retail bank
Picture: Mr. António Horta-Osório
Another success story is the radical transformation of Semco Company by its CEO, Ricardo Semler. Before 1980, Semco appeared to be highly organised and disciplined, where most of managers are using classic authoritarian solution with rigid control and long working hours. However, employees were complaining, ineffective and stressed out. Ricardo decided to transform the company and change his leadership style into laissez faire, in which he let the employees to self-manage, starting from flexible working hour and job, setting own salary, and evaluating their bosses. The organisation become highly democratic. Ricardo worked to solve the resistance and problems throughout the organisational change by continuous communication of his vision, and as the result, Semco annual profit increased dramatically from USD 35 million in 1994 to USD 212 million in 2003 with annual growth of 40% (Semler, 2007; INSEAD, 2014).
Based on discussion throughout the blog and examples from CEO of Llyods and Semco, it’s clear that the key of successful change management depends on manager’s clear vision toward the future and how to ensure organisation members embrace and participate in the change.
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Telegraph (2010) Lloyds Banking Group Appoints Santander UK Head Antonio Horta-Osorio As New Chief [online] available from <http://www.telegraph.co.uk/finance/newsbysector/epic/lloy/8106973/Lloyds-Banking-Group-appoints-Santander-UK-head-Antonio-Horta-Osorio-as-new-chief.html> [17 March 2016]
Picture Source: www.bluesteps.com