Strategies for Organisational Transformation | OD strategy
Table of Contents
Organisational Transformation Definition
Organisational Transformation has been defined by Cummins and Worley (2005) as ‘the process of radically changing the strategic direction of an organization, including fundamental changes in structures, processes and behaviours’. Change includes what is called ‘second order’ or ‘gamma’ change which involves discontinuous changes in strategy, structure, processes or culture.
Transformation is required when:
- Major changes happen in the competitive, social, technological, or legal environment;
- Major changes occur in the product life cycle that require different product development and marketing strategies;
- Key changes take place in upper management;
- a financial crisis or major recession occurs;
- An acquisition or merger takes place.
Organisational Transformation Strategies
Organisational Transformation strategies are typically driven by senior management and line managers with the support of human resources rather than OD specialists. The key roles of management as defined by Tushman et al (1988) are to visualize, activate and enable.
Organizational change strategic plans can include radical changes to an organization’s structure, culture and processes – the way it sees the world. They might contain planning and executing important and far-reaching expansions in business structures and organization-wide practices. Change is neither incremental (bit by bit) nor transactional (only pertaining to systems and processes).
According to Pascal (1990), transactional change is concerned only with changes in the ways in which the organization does business and people interact with each other on a day-to-day basis and ‘when what you want is effective’. it happens. You’ve already got it’. He advocates for ‘continuous improvement in capacity’, and this he describes as change.
Types of Transformational Strategies
Four transformational change strategies have been recognized by Beckhard (in 1989):
- changes in who runs the organization, for example change from happening
- production-driven going market-driven will be transformative;
- a fundamental change in the relationship between or between organizational parts, for example decentralization;
- a major change in the way things work, for example the introduction of new technology such as computer-integrated manufacturing;
- develop a fundamental, cultural change in norms, values or research systems, for example a customer-centered culture.
Organisational Transformation through Leadership
Transformation programs are led from above within the organization. They do not rely on external ‘change agents’ as in traditional OD interventions, although expert external advice can be obtained on aspects of change such as strategic planning, restructuring or developing new reward processes.
The prerequisite for a successful program is the presence of an organisational transformational leader, as defined by Burns (1978), inspiring others to strive for higher-order goals rather than just short-term interest. Transformational leaders go beyond tackling day-to-day management problems; they commit people to action and focus on developing new levels of awareness of where the future lies, and a commitment to achieving that future.
Burns compares transformational leaders to transactional leaders, who work by building networks of interpersonal transactions in a stable state and who enlist compliance rather than commitment through reward systems and the exercise of authority and power. Huh. Transactional leaders may be good at tackling problems in the here and now but they will not provide the vision needed to change the future.
Managing the Transition
Strategies need to be developed to manage the transition from where the organization wants to be. This change is an important part of the Programme. There is a change in the transition period from here to there. Infection management begins with the definition of a future condition and a diagnosis of the current condition. Then it is necessary to define what is to be done to achieve the change. It means deciding on new processes, systems, processes, structures, products and markets to be developed.
After these are defined, the task can be programmed and the resources required (people, money, equipment and time) can be defined. The strategic plan for managing the transition should include provisions to engage people in the process and communicate what is happening, why it is happening and how it will affect them. Clearly the goal is to commit as many people as possible to change.
Transformation Programme
The eight steps required for organisational transformation are summarized by Kotter (1995):
Establishing a Sense of Urgency
- Examine market and competitive realities;
- Recognizing and deliberating crises, potential crises or foremost prospects.
Creating a Powerful Guiding Alliance
- Gathering a group with sufficient control to lead the change effort;
- Inspiring the group to work organized as a team.
Creating a Vision
- Making a vision to help guide the change effort;
- Developing strategies to achieve that vision.
Vision Communication
- Using every possible vehicle to communicate new visions and strategies;
- Educating new behaviours by instance by guiding alliances.
Empowering Others to Act on the Vision
- getting rid of barriers to change;
- changing systems or structures that severely impair vision; Encouraging risk-taking and non-traditional ideas, activities and actions.
Planning and Creating Short-Term Victories
- planning visual performance improvements;
- making those improvements;
- Identifying and gratifying employees involved in improvements.
Consolidating Improvements And Making Still More Changes
- Using increased credibility to replace systems, structures and policies that are not in line with the vision;
- Employing, endorsing and developing personnel who implement the vision;
- Solidification of the process with novel missions, themes and change agents.
Institutionalizing New Approaches
- clarifying the relationship between new behavior and corporate success;
- Developing tools to ensure leadership development and succession.
Transformation Capability
The development and implementation of change strategies require specialized abilities. As Grattan (1999) explains: ‘Change potential depends partly on the ability to create and embed processes that link business strategy to the behavior and performance of individuals and teams. These groups of processes link vertically (to create alignment with short-term business needs), horizontally (to harmonize), and temporarily (to adapt to meet future business needs).
