Even a successful organization must be exposed to change. Otherwise the organization freezes and becomes impossible to move when it really matters.
Some years ago I was responsible for a business with several divisions across Europe.
There I ended up in a very exciting management situation, which gave me a very important lesson on change management and “organization defrosting”.
The situation was that especially one of the divisions had performed better than average for several years. Not because the division performed great, just relatively better than the other divisions. Over the years, the division had built its own strong identity and culture with a very high self-awareness of own value. You sensed the smell of pride and grandeur as soon as you stepped into the office. The employees were proud of belonging to this part of the business.
The division had had the same manager for 12 years, and he had become a father figure, since he had employed all the managers and many of the employees personally. In addition, he knew most of the larger customers, and had a good network in the local market. He knew about everything that was going on, and nothing passed his desk unseen. Employees proudly spoke about the unique family spirit that prevailed in the division.
At one point, the division began to ”cough”, and supply and quality problems occurred. This led to declining profits and decreasing customer satisfaction. The manager could not see the problem. They had always solved their challenges, so there was no reason to panic! Unfortunately, it got worse, and eventually a genuine crisis situation was a reality, yet without the manager seeing the reason to change processes, key employees, organization or attitude. It was an extremely precarious situation, since everyone could see that there was a need for change, except for the manager himself. The organization was simply frozen, and there was an urgent need for change.
According to the management theorist Lewin, organizations freeze in structures, values, and habits if no changes are made. Changes defrost the organization – a relocation, a new manager, restructuring or new IT creates a dynamic, which otherwise was not there.
The problem was that the division was as frozen as a Canadian river with meter-thick ice. It was almost unbreakable, unless we took the major management tools in use. We could not even make small changes, because the division’s immune system worked against all attempts for change, which was also shot down by the division manager or the management team. We kept on pushing and suddenly the ice broke, but then it was as violently as when spring melts the Canadian river. The ice broke and the melting water gushed out with great force. It was pure chaos, where the entire management team, including the manager was replaced uncoordinated, the employees fled and the customers did not understand what happened. It was a brutal and unintended defrosting, which costed both effort and money.
Afterwards, the division needed to be built up, and the organization needed to both unlearn and learn at the same time. The new management team needed to create a new culture with a new organization and new processes at the same time, all the while employees watched the scenario open-mouthed, thinking “what are they doing now?”. The employees did no longer know the patterns and the values of the organization. The most loyal employees stayed, but many employees chose to leave because they did not recognize their workplace any longer.
The learning was that even successful organizations must be exposed to changes regularly in order to avoid that they freeze. A change of gradual defrosting creates the opportunity to develop. A relocation can easily be followed by a cultural development. A new IT system can be followed by new processes. A new leader can implement new initiatives within the first 100 days. The organization suddenly has the chance to say goodbye to inadequate routines and the constant “usual”. You must teach the organization to handle and love change, and it can be very refreshing in an organization as well as creating a whole new life. However, don’t wait too long with the changes, thus the organization has become frozen.
Currently, many companies are going through a dramatic journey, as the market and its opportunities quickly change in character. It is all about being ready to meet disruption, especially before the competitors. As a leader, you should be able to foresee these drastic changes. But what does disruption exactly require from you as a leader?
Today, the walls of the corner office have fallen. Along with Millennials entering the labour market, technology has overtaken the exchange of knowledge and admiration has disappeared. This imposes new requirements to the manager including a significant change in leadership style.