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  Change Management
  IT in Retail
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  Introduction to ERP
  Steps to   change

Originally Published in "The Review" (February, 2001)

Small acorns grow into big oak trees - this is the theory at the heart of modern change management.

Vipul Bhatti reports :

Every voter in the US Presidential elections wanted change, and both key candidates promised to deliver it. What Clinton has done, what Bush hopes to do and what Gore could have done is what Herbert Haag has achieved at PartnerRe and what Max Taylor's successor must do at Loyd's: manage change. Many leaders make their mark because of what they transform. But the results are affected by how such transformations are handled.

The concept of 'change management' has become increasingly popular among corporates over the last ten years. The IT revolution is forcing them to increase their operational pace and achieve long -term prosperity. According to Dennis Hoppe, president of New York-based Change Management Implementation, the technology revolution has had "a tremendous impact". Consequently, the need to react faster to change has increased significantly over the last 40 years. Scoring a goal in one game is not enough. Maintaining success is about how to play and win the next game-quickly.

Large companies often experience resistance when attempting to reform "the old ways", says Hoppe. Newly created companies do not have to contend with building bridges between established and new philosophies. "Starting from scratch in today's market is an absolute advantage. Old ideas must be undone and more forward thinking people need to be brought to the forefront," comments Hoppe. He believes smaller companies adapt faster, suffer fewer drawbacks and push through new ideas faster because they have fewer, more receptive, committees and a more informal structure.

Most companies have much less time to adapt than ever before. Sozen Leimon, an associate partner at Accenture in London (formerly known as Andersen Consulting), believes cost reduction, production and customer services are key change drivers. She says: "Customers have more knowledge, more information, and there are more service providers. There's no rest period for companies. They have to think of the next product, the next service. Pressure from shareholders is also increasing."


US organisational theorist, Frederick Taylor presented the notion of change in organisations to help make businesses more efficient in the early 20th century. He believed workers were cogs in a machine and his philosophy aimed to eliminate as much human error as possible. But this was in the old world.

Dori Digenti, president of Learning Mastery, an education and consulting firm in Massachusetts, argues that the works of theorists such as Mary Parker Pollet and Ed Schein heralded a philosophical watershed. They believed in thinking about organisations where people were the focus of change. Follet and Schein asked how businesses could become more 'human', productive and foster respect for workers. This is a big challenge in a world that relies heavily on technology to communicate and carry out the most routine tasks.

Digenti feels change is poorly understood, despite the wealth of academic work that exists. "It's like looking through a window and seeing a cool forest on the other side, a glade fountain where you can relax and reflect, but not being able to find the door that leads to that space," she says. Most people see what real change can do. But their organisations have not developed the will or resources to move in a new direction.

Schein talked about the need to address 'learning anxiety' in the process of change. To reach the proverbial forest companies must give employees time to learn new behaviours without instilling fear of appearing incompetent. Digenti says strong leaders -an often overlooked but crucial part of change management- can manage such vulnerability sensitively.

Golf is a good example says Richard DiGeorgio, president of Pennsylvania-based change management consultancy, Richard DiGeorgio & Associates. With the right instructor most people can learn how to play, and the learning process itself may lead to success. He adds that achievements can happen with motivation. The father of champion golfer Tiger Woods raised his son's aspirations to be better. Now Woods just keeps winning.

The process of change can improve the business environment, even in well-run organisations. "There are many toxic workplaces out there, where people feel constrained, demotivated and hopeless every morning," says Digenti. She believes leaders can avoid unwanted and potentially unpleasant change by creating forums where employees can discuss their concerns freely.

She questions whether leaders really listen to their teams. Digenti says: "It takes a lot of training and openness to hear what others are saying. Leaders often fear appearing indecisive." Claiming to be aware of change and being able to implement it are two very different things. Understanding change management and being able to act on it is what separates success from failure.

This is why companies need to strike a balance between strategic thinkers and operational managers. Leimon says: "Leadership is accountable for operations. It needs to have a clear focus of core business and value generators. Simultaneously, strategic thinkers should be aware of the importance of the external environment and look into how it's changing."

George Binney and Colin Williams, authors of Leaning into the Future, agree. They say: "There is always a price to pay for riding roughshod over people. Compliance can be demanded, but commitment cannot. People will give grudgingly what they have to, not all that they can ...The price for this is usually paid in the long-term."

But Hoppe warns that change is not an option. It is a necessity. "You must boost competitiveness and motivate change, or you'll fail. The window of opportunity gets shorter and shorter, rapid response and a proactive management structure are critical... Great decisions aren't about waiting."

But not all goals are attainable. Setting and achieving them is a catch 22 situation. He says: "In this global e-commerce economy we often have to make trial and error decisions, but the initial goal can't be fanciful. It must be realistic." Trying to reach too far will often prevent successful changes from materialising. Conversely, failure to aim high enough may not achieve the desired result.

According to Digenti, small bites first work best. "Work up a series of small successes before going after large change. The biggest source of corporate cynicism is the large change process, where promises are made and not kept." No organisation should begin a new process without having a very detailed implementation plan, or a budget to cover the initial change phases and maintain the new culture. "Small is beautiful. You need a track record of successes to build trust," comments Digenti.


It is not easy to implement new ideas, and companies should accept that failure can be an expensive part of risk taking. They also need to acknowledge that management sometimes gets it wrong. "You have to look and think outside the box," says Leimon. "Change management is expensive, but going for change is better than less investment." DiGeorgio uses the 'boiled frog syndrome' to explain why companies should not fear change, and why they should think their plans through thoroughly. He explains: "Put a frog in tepid water. If you slowly turn up the heat the frog will remain in the pot. If you start out with boiling water and then drop the frog in it will jump out."

The moral of the story is : If change is introduced gradually, frogs will die because they become too weak to alter. But the pain of the heat will force them to act. Funnily enough, this usually applies to humans too.


Establish a sense of urgency -examine market and competitive realities and identify and discuss crises, potential crises or major opportunities.
Form a powerful guiding coalition -assemble a group with enough power to lead the change effort and encourage the group to work together.
Create a vision to help the change effort and develop strategies for achieving it.
Empower others to act on the vision -get rid of the obstacles to change: change systems or structures that seriously undermine the vision; and encourage risk taking and non-traditional ideas, activities, and actions.
Plan for and create short-term wins -plan for viable performance improvements, create those improvements and recognise and reward employees involved in them.

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