The normal assumption that “Change is
the only constant” is frankly an idiom that is wrong in more ways than I can
count, at least insofaras Business is concerned. There is a difference between regular
uncertainty, flux in Business realities, short term fluctuations, normal
predictive events that lead to change – and turning the organization from one
direction to another. The first is not change; managing it is not Change Management
as per me. That first aspect is just the nature of business; you have to learn
to navigate all of these.
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| Change Management - Image Credit Google Search |
Real Change is when you have to shift
the strategy employed at an organizational level, perhaps departmental /
functional level – from one vector to another. How you manage this determines
how good you are at Change Management. Note my words : how good, not how
successful. Success can also be a function of unconnected events, random moves,
competitive shifts, – or just plain luck.
Many companies have tried this; and most have failed the test of “Good”; in
fact, most even fail the test of success as their marketshare collapses, or
other mayhem ensues, requiring Crises handling.
Further, the assumption of Communication
clarity etc in the change process, while important, is almost always
overstated, massively so. This might sound strange, even blasphemous, to most
HR personnel, top managers and trainer. Hold on, please : I propose to prove it
in the real world. In this article series, I propose to lay before the reader a series
of cases, all from the real world, to understand this, and other dynamic forces/
aspects of change management first-hand. All these cases are real, and I have
first hand knowledge of them – as I either was a team member, or the key
manager involved. All names, organizations have been hidden for anonymity.
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| Image Credit Google Search |
CASE 1 : COMMUNICATION
Let us first tackle this with issue, before
we get to the real aspects that need priority attention. {We will return to
this case later on as well}. This is regarding an initiative of a channel shift from Wholesale
mode to Retail mode, as the company had nearly 68-73% wholesale contribution
from total sale, and near-complete absence in key & big counters. This communication,
regarding strategy shift, was made system-wide, repeatedly so. The strategy
failed, big time. No effort was spared to communicate; individual or collective
– you name it, all was done. And yet, the result was a failure. I was also part
of another effort to an identical shift of strategy to retail; that succeeded.
In that, No effort was made to communicate
the required behaviour whatsoever. Why then did it succeed? Look up the
next case for the answer to this conundrum.
As an example, My ASM understood
everything - he was and remains one of the topmost talents I have managed.
Refused pointblank, said we wont succeed, with proof. He was rated as the
number 1 ASM pan India, cleared for promotion, with massive power. Sacking was
not an option. He singlehandedly nearly derailed it, till I found a way around
him. Similar experience entire team, all people at my level shared with me.
Everyone understood, accepted - refusal was universally point-blank in the
first company. Needless to state, it was a mega-flop eventually, as nothing that was done in the next case
was even attempted in this case.
CASE 2 : THE REAL ISSUES
This is a case from a different
industry – vital point. I will connect it up later. In this case, the situation
was the precise same; wholesale contribution to sales was around 70%; retail
sales were 30%. Our direct presence in retail was abysmal; and a turnaround was
planned. The planning was in-depth; they first started with the team. I was one
of those brought on board as I knew nothing of the industry, and could thus be
moulded properly. No one was sacked. I recall being given a zero-pressure free hand
to change the market realities. All of my approvals, those that were in line
with the desired direction and strategy went through smoothly without a hitch.
Conversely, the approvals that went
against the spirit of the strategy were all rejected. Anyone not found implementing
the basics was summarily and publicly sacked, regardless of percentage number
target achievement. Higher than normal achievers were raked over the coals in
tough public grillings, checking market irregularities and having to answer
hard questions. High achievers were
bluntly told – I care little for your numbers; show me the process and the
system. The channel was engaged with, not through meaningless talk, but a combination
of action and hard decisions.
The end result was an incredible turnaround,
which not only eventually delivered the numbers, but broke the back of at least
one competitor as well. I remember being at 98%, and being publicly applauded
by the VP and senior management – while those at 120% were hammered and hit with
every imaginable question on their number achievements, fundamentals; with very
hard questions that revealed their short-term tactics.
LEARNINGS AND SUMMARY
From the above two cases, it can be
seen that there is a marked difference in the two. From personal experience of
handling both the scenarios, I can state that the level of preparedness of the
plan was much superior in the second case. {I can give other examples, but that
will have to wait for later articles}. What is the difference in the two approaches?
Let us go into the basics, right back to some hard basics to establish the
learnings.
The key is the problem identification, and change
solution suggested, not in world terms, but in the in depth detailing at
and from all levels. Time consuming but worth it. It is in HOW you prepare the problem statement and solution recommendation. If
either have even a small disconnect with reality.. Endgame. Simple
communication etc doesn't help. Each employee has vested interests, and current
methods are what feeds him. Even if he sees the benefit, he will not implement,
period. Each market and each organization has a range of ground realities,
which unless attended to, will almost certainly derail your project fully and finally.
Next, You have to ensure attention to
each internal and external point of interface of the change strategy;
departmental, employee, vendor, channel level all. Leave even one, and you
better not start the change. Let things be. Since the organization is running
and working in real time, peoples’ deliverance, KRAs, performance and pay is
determined by the current method of operation. Inter and intra departmental
rules need to be examined for fit with new strategy, and deviance potential addressed.
Established vested interests need to be
identified.
You have to overcome vested interests
- as current methods are in usage. Minor approvals need to be strategised and
monitored - some you will need to ignore, some you will need to stop. Old
system top performers need to be held back, or it could result in an internal
collapse. Current profits are being delivered by the old methods; you cannot
tamper with that without upsetting a whole lot of apple carts. External and
internal interface points of the new strategy, and the detailed problems it can
cause in each and every individual department and employee needs to be studied
and tackled, strategized.
Only way... Doesn't exist. You HAVE
to reinvent the wheel, create a new framework for each problem. Each micro
problem, each department, office, function and reporting manager. Failure to
attend to this is a recipe for disaster. Lastly, Informal Power Structures within
the company need to be specifically identified and acknowledged for what they
are. In order to push through the new strategy into the company, you will need
support – and this is regardless of who are what you are. Let us now examine
this in the concluding paragraph in the light of the failure in the first case.
CONCLUSIONS
Let us take each point one by one and
see how they collectively lead to disaster. Remember, the task was a change
from 70% wholesale to 15-20% wholesale sales maximum. The identified problem
was seemingly accurate; in reality – it was not. The company did not have the
product portfolio it once had; the market had made it obsolete, and an economy
player. There was near-zero market pull from the target segment. Nothing was done to attend to this at the
right time. They were late. And in business, if you are going to be late, I advise
you not to even try, and save the money.
Next, vested interests and interfaces.
Everything from the variable pay of the employees, incentives, promotions, market
schemes, distributor profile, people skills were wholesale based. The internal
information system was compromised – as massive wholesale benefits lead channel,
including SO, ASOs, AMs, ASMs to collude with the channel to build up false data
of sales to garner higher schemes for self and for the channel – as well as to
actively connect retail to the wholesaler. As a result, the company had no idea
of the reality. All interfaces were dependent on the old methods. Performance Measurement
had primacy to the end number, giving much less than 30% weightage to the
process.
Approvals were given basis the informal
power matrix, and consistently undermined the stated strategy. This sequentially
emboldened the staff to take ever more risks and use old ploys. Approvals along
new strategy were in fact held up for examination as a check while the old
systems went on. Delays piled up. Trust in initiative drivers was absent – and most
vitally, old schoolers were never pulled up for screwing declared strategy.
Performance, Incentive, Reward, Sales Strategies remained the same. Targets
were not revised to motivate the new method – inculcate new benchmarks, unlike
the first case.
The difference cannot be more stark;
the first case was from an old industry with established processes and systems,
while the second from a new industry. Putting the two together, it can be seen
that you need to sort out the in-depth basics and operations that determine
profit and turnover. If you do that – attend to Targets, PMS, Incentive Structures,
Approvals, Products, Market Realities, Skill Sets etc – the rest will fall into
place. This is communication – when the team learns that the old methods do not
guarantee anything in the new system – well, that is true communication. You
have to tackle power structures, organisatioal silos, vested interests, OD Processes etc to properly manage change…
Well written .
ReplyDeleteThanks a lot!
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