Nhrd Journal On Change Management

CONTENTS S.no Title of the Article

Author

Page Nos

Editorial Comments

4

The Concept and Process of Organizational Change 1

Organizational Change

Indira J Parikh

5

2

Organizational Change Management: Why? What ? How? Simon Wallace

10

3

Leading Wholesome Change in Integral Way

Ashish Pandey

18

4

Change Management: Some Practical Considerations

Bhawana Mishra

24

5

Fundamental Change in Education Quality

Dileep Ranjeker

28

6

How HR Can Ignite ‘Hot Spots’

Yogi Sriram

33

Change Leaders and Change Agents 7

Bringing Change to the Change Agents: A Look at Indian NGOs

Mustafa Moochhala and Tejinder Singh Bhogal

37

8

Defining Change Agents

Sandeep K Krishnan

43

9

In Praise of India’s Most Seasoned Change Managers

Ganesh Chella

48

10

The Enduring Skills of Change Leaders

Rosabeth Moss Kanter

53

11

Core Tasks for Successful Change Management

S.Ramnarayan

60

Critical Factors in Organizational Change 12

Driving Organizational Change

Leena Nair & Ankush Punj

65

13

Measuring Organizational Culture and Change

Rajeev Kumar

70

14

Management of Change: Critical Factors

Tarun Sheth

74

Rajeev Dubey

78

15

Organizational Change: The Formidable XI

16

Communication Effectiveness, Justice Perceptions and Employee Commitment during Organizational Change

Ranjeet Nambudiri

81

17

Managing People in Mergers and Acquisitions

D Prasanth Nair

86

18

HR: An Evolving Function

D Harish

92

19

One Reason for Failure of Change Interventions - Abilene Paradox

PVR Murthy

95

20

IPO: A Powerful Intervention in Organizational Change Ravi Virmani

97

Case Studies of Organizational Change 21

From a Sapling to a Forest

Udai Pareek and TV Rao

100

22

Challenge of Managing Organizational Preparedness - ICICI

K Ram Kumar

107

23

Bringing about Organizational Change - Philips India

Vineet Kaul

112

24

Organizational Change - Maruti Suzuki

S Y Siddique

117

25

It Will Be Done, I Have to Do It: A Story of PCBL

Ashok Goyal

122

Management of Organisational Change: Leveraging Transformation By K.Harigopal

B.V.L.Narayana

128

Competing Through Knowledge: Building a Learning Organization Madhukar Shukla

Ramendra Singh

Book Reviews

EDITORIAL COMMENTS It is an exciting experience to witness the changes that are happening around us. Our country is experiencing new challenges and with it comes enormous changes that are linked to growth. We have the opportunity to witness the beauty of fast organizational changes. Various themes are related to these changes which include growth, turnaround, mergers and acquisitions, global market exposures, labour market turbulence, and institution building. Arvind Agrawal (Guest Editor) An IIT Kharagpur and IIM (A) alumnus. Held Senior Positions with Escorts, Xerox and is currently President – Corporate Development and Group HR in RPG Group.

It was an enriching experience for us to anchor this issue of NHRD journal that addresses the theme of organizational change. It is the biggest management challenge to enact and establish a change process. This issue brings out insights that are well thought out by professionals who are experts in the field of human resource management and organizational development. We thank this fraternity who obliged to our request for writing on their experience and knowledge despite their busy schedule. We structured the articles in four major sections. The first section looks at the concepts and processes of organizational change. Here the authors drive upon the factors and processes from both theoretical and practical angles. A carefully planned change would involve efforts from change agents drawing up understanding the context of change, gathering support from various corners, linking up to the need of the time, using the best of methods and techniques, and ensuring buy-in and commitment in the end. Second section explores the role, and characteristics of change agents. In the third section we draw upon the factors that contribute to successful change and its management. In the last section, we have interesting case studies that give real life experience sharing of organizational change. As you traverse through this edition we hope you will be able to experience a holistic view of organizational change drawing from conceptual understanding of factors and processes to real life sharing of experience. Change can be defined and understood from a very technical point of view but bringing out one is a story of courage, emotions, understanding, and sheer perseverance. As Abraham Lincoln puts it, "I shall do less whenever I shall believe what I am doing hurts the cause and I shall do more whenever I shall believe doing more will help the cause. I shall try to correct errors when shown to be errors and I shall adopt new views so fast as they shall appear to be true views." We should be open to the change and should have the ability to adopt and adapt to it. Those organizations and individuals who could make a successful change make a mark in their life and of many others.

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Arvind Agrawal (Guest Editor)

PVR Murthy

Aquil Busrai

PallabBandyopadyaya

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ORGANIZATIONAL CHANGE INDIRA J PARIKH Abstract

This paper is based on the author's experience of working as a consultant in diverse organizations. This paper reflects the comprehensive diagnostic studies of numerous organizations. The global business scenario, the country's business and economic environment and the organizational internal environment of today is highly nebulous. Significant changes in technology, economic models of growth, emergence of new sectors of business and a new collectivity of young entrants to the working stream have dramatically changed the national and global scenario. Given these changes, the directions and choices of the organization, its unique configuration and unfolding may contribute to a healthy transformation of the organization or contribute to the scatter, disarray and disintegration of the organization.

The External Environment

Prof. Indira J Parikh is President of Foundation for Liberal And Management Education, Pune, India. Prof. J Parikh was faculty member at IIMA for over 30 years and Dean from 2002 to 2005. She has also taught at INSEAD, Fontainebleau (France) and Texas A&M University. She received the Lifetime Achievement Award for Best Teacher in Management in the World HRD Congress.

The external environment of the organization with its globalization and increasingly border less but complex and competitive world are creating unsettling conditions for the Indian organizations. The impact of the external business environment confronts the organization to go beyond the many assumptions they have made of business and governing the business. As such, organizations confront many opportunities as well as challenges to manage both the internal as well as external environment of the organizations. The Internal Environment The internal environment of the organization gets impacted by the external environment and creates turbulence within the organization. Years of work culture seeped in the ethos of slow and steady incremental growth overnight is experienced as obsolete and ancient, relationships become professional interfaces across roles, functions and levels and take away the sense of belonging and shared November

togetherness. Memories of what once haunt the employees and puzzlement of what now is, creates drift in the direction of the organizations. However there are also some organizations, individuals and collectivities that thrive in these uncertain and turbulent conditions. They respond to the pressure of here and now and achieve, succeed and grow. In this emerging work culture of today there is no time or space to pause, reflect and watch the grass grow. There is also no time and space to visualize beyond the horizon to explore, experience and discover. There is largely a frenzy of over engagement and to keep making choices under tremendous pressure. Organization Growth At the entrepreneurial or project phase of organizations there is a drive, fuelled by dreams, aspirations and ambitions, of one individual or a group of individuals. At the consolidation phase of the organization, often times there are formalization, strategic choices for businesses restructuring and 2007

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redesigning of the organization. When this starts to happen the existing employees feel bereft of personal contact with the roles in the higher authority and ownership. As there is an increasing sense of urgency in the organizations, collectives and individuals to reach the mileposts and destinations of growth the human values to govern the organization are often marginalized. In such a process of dramatic change organizations require a pause to explore and ask many a difficult question as to the nature of change, directionality of change and shaping of change. Organization Identity Many organizations at such a point of time like to ask themselves the questions as to what is their identity. Organizational identity consists of the history of growth, the evolution of underlying philosophy, the individuals in leadership roles, the values of governance, the existing and new employees and the overall work culture of the organization. Over time this work culture gets stabilized and then becomes frozen. A comfort zone gets created where organizations tend to hold on its created meanings and work roles. It is at this point of time the organization's identity with its deeply embedded meanings finds it difficult to respond to change by adding new dimensions and new ways of working. Organizations get caught with the anxiety of losing the techniques of success and fail to find freedom to discover their internal strengths to ever renew it. Organization Structure Structure designs and determines the directionality, degree of autonomy of each task, role and function, boundary and the interlinkage space in the organization; so that an order, clarity and a policy frame for results get created. The structure also allocates responsibilities, authority and accountability at all levels of the organization. Individuals, groups, organization structure and their inter-

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play with each other create its own dynamics. In the designed structure of the organization and its operationalization, some tasks and functions get centralised, acquire significance and visibility and are perceived as having more favoured and strategic status with the top or the senior management. While some other tasks and functions are marginalised and feel a "taken for granted" status. How this dynamics is translated into managerial behaviour determines the quality of energy available to the organization through using the spaces to interlink and take functional and organizational responsibility and decisions. Simultaneously, the leader needs to foster membership and belonging of the employees. The institutional a sense of culture may or may not receive energy from an organization structure depending upon the role played by the leadership and the internal dynamics of the organization. Similarly, the organization structure gets operationalized through direction from the leader or multiple pulls and pushes from the various groups in the organization. The non emergence and operationalization of a formal organization structure generates stress and power and politics in the organization leading to dissipation of energy across all levels of management and employees. In such a situation the role of the leader is to initiate those processes which will mobilise the organizational structural energy for the organization and its employees. This change is brought about through inclusive processes where employees experience openness and accessibility and fair and just systems. Organization Culture The organization culture evolves over a period of time and is connected with the history of growth of the organization and the interplay of various internal and external dynamics of interfaces across the organization. The roles, the membership and leaders and their inter-play

give subtle shape to the organization culture. The change required is from lack of energy, apathy and sources of de-motivation of the past and present to the future of the organization which is kaleidoscopic and requiring alertness to ever shifting realities. The culture of the organization is either taskfocused anchored in a work culture or personality and people-focused, anchored in the socio-cultural context of the country. If the organization needs to be changed and energized in the work culture, the tasks need to anchor themselves in setting the standards of productivity and excellence. The functions need to come alive with shared understanding and clarity of goals, targets and objectives of the organization. The organization comes alive through participation in policy and strategy and shared understanding of organization mission. Similarly, the organization culture of tomorrow needs to foster a work ethos anchored in vision, values and philosophy of life space to generate enthusiasm and energy for the organization and the institution of corporate social responsibility. The energy of the organization is dynamic when the integration of culture and the institution takes place with the organization's concern for the life space of employees and their well being. Encountering Critical Issues of Organization The forces of tomorrow's external environment are going to overwhelm Indian organizations. The energy of the cross currents and pulls and pushes of contradictory forces are going to attempt to push the frontiers of Indian organization never visualised before. However, the resilience of the Indian spirit can be fostered through a critical but hard reality appraisal of the internal dynamics of the organization vested in the human resources and potentials. The HR role of organizations and the CEO s would have to squarely identify the critical issues of managers and organizations and design processes to deal with them. These processes are:

• Appraise the strengths and limitations of the organization. • Differentiate the performers and non performers and identify star performers. • Assess the star performers and the mediocre. Support the star performers and invest in those who are mediocre for their growth and subsequent contribution. • Realistic assessment of human potential so that creativity and innovativeness may flourish. • Design organization structures of small sub systems which may flourish and grow simultaneously in the larger context of the organization. • Give emphasis on quality of life space of each employee so that he/she may live and work with dignity and respect of self, others and the system. • Provide space so that employees may wholesomely integrate family and work systems where they find freedom to play multiple roles in multiple systems. • An individual and an organization can own up its own uniqueness of existence and identity and give meanings to the process of living and enlivening of the self, others and the system. • When this internal energy of the organization begins to flow at the individual, collective organizational and institutional level then a momentous energy will be released which can then be channelized to create a space to grow, a rhythm of relatedness for goals and objectives and create wisdom for organizations to flourish as well as compete in a complex and competitive global business environment.

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Organizational Spaces for Tomorrow The frenzied life space, the milling crowds, the restlessness of the environment and the aspirations and ambitions of people require organizations to create multiple spaces where an employee can go into that space for renewal and rejuvenation. Spaces for solitude These are spaces for reflection and spaces for silent expression of themselves. These spaces would then provide a rhythm of stability as well as preparedness for connectivity with the work and positive relatedness with the organization. These are essentially spaces for spiritual communion with oneself so that an individual employee experiences tranquility and peace. The employee then can emerge with accepting the complex realities of life and be able to deal with day to day stresses and give shape to his life. Spaces for related interactions These are task and functional related spaces. Today's organizations are meeting-based cultures. Organizations are designed for sunrise meetings, sunset meetings, standing meetings, cross functional meetings, intra and inter departmental, functional and divisional meetings. However these meetings start out with good intentions but finally turn into non productive and non decisive conclusions. Most managers believe these meetings are waste of time. Organizations can create spaces which are task related and facilitate a mindset to get work done and decisions taken. This contributes to action initiatives which are linked to responsibility and accountability. These are linked to achievement, success and excellence which are then linked to affirmation, valuing and anchoring in the organizations. These spaces are also socially engaging wherein there is an element of fun and celebration of success. Spaces for dialogues These spaces are designed for dialogue across levels of organization about the concerns of the organization. This is a retreat

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space to explore and review the philosophy, values, work culture and relationships across the organization. In any organization there are always spaces for sharing secrets, creating groups and cliques and public spaces for gossips, where myths are generated about people and the organization. Then there are spaces of the organization which are formal spaces created for dialogues. Both spaces put together create a unique quality as it fosters a co-holding of the organization and co creating a work environment. In this space a small or a large space is owned by every employee and stakeholder of the organization. This ownership and co-holding creates a shared meaning, a shared significance of belonging and shared valuing of each other and the organization. Spaces for the creation and brightening of a working environment Any organization has walls, corners and cubicles which are blank, often dreary and empty. An organization can transform these for putting display of each individual's personal, emotional memory. Most organizations do not have public display of individual employees contribution of expression of creativity. Almost no organization displays employee's arts and crafts which are the employee's personal creation. Organization has immense wall spaces which can be adorned with employees, expression of arts, paintings, crafts or similar such creative expressions. Organization needs to create spaces wherein employee's larger meanings and life can be brought to the organization. Organizations can have a painting day, art day, crafts day a collective collage, photographs put on display on the walls of the plant or the organization and ambience thus created is bright and cheerful. Spaces for celebration Most organizations have a very serious and somber face to the world inside and the world outside. The meaning given to this serious face is professionalism. However, professionalism has good and desirable needs

to be tempered by a sense of humor, a sense of joy and celebration. These spaces then release the cumulative negative energy and give birth to positive energy which leads to celebration. This celebration and togetherness creates goodwill and generosity with oneself in bringing commitment and mobilization of oneself to give more to the work culture. This work culture facilitates co construction and creation of a dynamic work environment. These are some of the landscape of change which organizations need to design and shape. The role of HRM in this new landscape of the organization employees and the environment is to focus on the growth of the employee, growth of collectivities of employees and growth of the organization. A word of caution. In the process of such a change the HRM needs to be sensitive that all cannot make the transition. That needs to be accepted with grace and dignity. There has to be space for some to do work at their pace. Here the focus is on the present emergent identity of the working employee in the organization. To some the work space, the work meaning and work status is extremely significant and important. To some a slow steady pace is acceptable. To some young employees, they are in a hurry and want to run. The HRM needs to create and design a work environment which provides spaces to all and yet keeps the momentum and vibrancy of the organizationhuman interface scenario surfacing with breathtaking results.

In growing of an organization, each individual brings his/her own story, each group bring their stories and each organization has its own story with individuals and collectivity enacting their roles. Each will enact their roles, each will connect or part and each will add to the emerging new collage of growth and success. The role of HRM in this unfolding scenario of work organizations is emerging as strategic. However, the role of HRM is to emerge as shaping organization identity, its myth and folklore which can be sung by the bards of the organizations creating its landmarks and leaving its footprints in the sands of industrial, technological and national unfolding in the context of a larger globalization of the universe. References Parikh Indira J. 1997. A Diagnostic Study of Mahindra and Mahindra Tractor Division. Unpublished. • 1998. Paradigms of Organizational Leadership. Self Organized Criticality: The Avalanche Effect. Working Paper, IIMA. • 1999. Challenges of Indian Organization in the Twenty First Century. Working Paper, IIMA. • 2001. Transforming of Organizations through Enhancing Free Energy of Individuals, Collectivity and the Organization. Working Paper, IIMA. • 2001. A Diagnostic Study of Bajaj Tempo Limited. Unpublished.

Acknowledgement from Editors • • • • • • •

Our thanks are to all the contributors of articles for sharing their thoughts and experiences. We appreciate the spontaneous gesture by Rosabeth Moss Kanter and Simon Wallace in permitting us to reprint their articles. It was a great pleasure and learning opportunity to work with Arvind Agrawal, guest editor for this issue in designing theissue, identifying potential contributors, inviting them to share their thoughts and in finally editing the issue. Thank you Arvind. We are grateful to Dr. Udai Pareek for the guidance. We are also thankful to Nokia and BGEPIL for their support in bringing this issue. Our thanks are to Dr. Sandeep Krishnan for playing a critical role like a sub editor. Finally our profound thanks to Prof. SS Rao, former Editor of Vikalpa and a Prof. IIM Ahmedabad for his expert suggestions and guidance. November

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ORGANIZATIONAL CHANGE MANAGEMENT WHY, WHAT, HOW? SIMON WALLACE

Simon Wallace has 29 years experience of project management and solutions delivery. He has managed or advised in the management of around 50 business solution and IT projects. The largest programme had a budget of around UK£500 Million. In 21 years as a management consultant, Simon has achieved senior status as Head of Management Consultancy for a UK firm, a Director and Council Member of the Management Consultancies Association, and a member of the global management team for a world-wide consulting firm. Simon had global responsibility for bestpractice approaches to technology-driven business change, including methods, techniques and tools.

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Almost all people are nervous about change. Many will resist it -consciously or subconsciously. Sometimes those fears are well founded -- the change really will have a negative impact for them. In many cases, however, the target population for the change will come to realize that the change was for the better.

The pace of change is ever increasing - particularly with the advent of the Internet and the rapid deployment of new technologies, new ways of doing business and new ways of conducting one's life. organizational Change Management seeks to understand the sentiments of the target population and work with them to promote efficient delivery of the change and enthusiastic support for its results.

There are two related aspects of organizational change that are often confused. In organizational Change Management we are concerned with winning the hearts and minds of the participants and the target population to bring about changed behaviour and culture. The key skills required are founded in business psychology and require "people" people. Contrast this to organizational Design where the roles, skills, job descriptions and structure of the workforce may be re-designed. Typically that is a more analytical and directive activity, suited to tough-skinned HR professionals. It is not a topic for the ePMbook. organizational Design may be a specific objective of the project, for example where there is to be a reduction in the workforce, or it may just be a consequence of the changed business processes and technology. organizational Change Management issues are often underestimated or ignored entirely. In fact, people issues collectively account for the majority of project failures. This survey looked at disastrous projects. One of the questions asked for the prime cause of the failure.

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Although the result did not spell out "people" as the cause, it is interesting to note that many of the causes were to do with the behaviour and skills of the participants. Arguably all but the "technical issues" were related to the capabilities, attitudes and behaviour of people. What Caused The Project To Fail? Lack of Communication 20%

Inexperience in Scope and Complexity 17%

Failure to define objectives 17%

Technical issues 14% Project Management Problems 32%

Source: KPMG

A different study examined whether package implementation projects' benefits had been achieved. Where they had not been delivered, the question "why?" was asked. Top of the list was "organizational resistance to change".

it is common to find that the human component of the project is not recognised as a separate element of the work. The project management team frequently have to do their best to ensure that a technological change is successfully implanted into the business. In the worst-case scenario, the project leadership do not see this as part of their responsibility either and blame the organization's line management when their superb new technical solution is not fully successful when put to use. Organizational Change Management at Project Start-up Many organizational Change Management issues need to be clear at the start of the project so that appropriate activities can be included in the plans, and so that appropriate roles and responsibilities can be established. Here are some of the key issues: • Is there a compelling "Case for Change" that all participants will buy in to? • Who are the owners and sponsors of this change? Will they actively promote the change and apply pressure as needed?

Organization resistance to change Unstable requirements Lack of business owner ship Significant Cost Over-runs Significant schedule Over-runs Package did not meet expections Technical problems Poor project management 0

2

4

6

8

10

12

14 16 Source: KPMG

Again, several other causes were related to people, their skills and their behaviour. "Lack of business ownership" is a major responsibility of the organizational Change Management work. Such things as "unstable requirements", "not meeting expectations", and "poor project management" would also be partly due to behaviours and skills. Organizational Change Management is a vital aspect of almost any project. It should be seen as a discrete and specialised work stream. Why then, you might ask, do we discuss it as part of the Project Management work. Unfortunately,

• What are the populations involved, eg the overall leadership of the organization, project participants, sub-contractors, endusers, other departmental managers, other members of the workforce, suppliers, customers etc? For each population (or subset by role, function, etc) what will their attitude be? Will they resist the change? How can we encourage them to act in a way which will support the project's objectives? • What style of participation will work best? Should we involve a broad section of the target population or keep everything secret until the change is forced upon them? • How can we communicate these messages to the target population?

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The Case for Change • As part of the project definition, there should be a compelling "Case for Change" which can convince all participants and, in due course, the target population. If everyone agrees that the project has good and necessary objectives, they should be far more supportive of the changes. This is not the same as the project's main business benefit case. The business case is likely to be founded on business strategy and financial results - often not a compelling argument for the individuals in the workforce. In a "Case for Change", it should be clear that there are better ways of doing things - better for the organization, better for the workforce, better for customers and (maybe) better for suppliers. Sponsorship The Project Sponsor is usually the person who saw a need for change and had the authority to make something happen. There may be several sponsors who collectively have this role. The precise ownership of the project is more a matter for the Project Definition work. What counts from an organizational Change Management perspective is not the actual ownership and rationale for the project so much as the perceived sponsorship and purpose. For example, the project might exist because the Finance Director wants to cut costs, but it could be a better message that the Chief Executive wants to build a slick organization that can beat the competition. The original Project Sponsor will often have the power and status to create and deliver the project and may be able to deliver the change messages to the areas of the organization directly involved. In many cases, however, the change is broader than the immediate influence of the Project Sponsor. Other supporting sponsors may be required to promote the project in other areas of the organization.

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Make a Sponsorship Map - initially to show who is involved and what support they are offering. Use this to identify who else needs to participate and what they need to do. In major change programs many parts of the organization will be involved, for example: • The line business unit that houses the changed process, • Other departments involved in the process chain, • Senior management and general management of the organization who will be critical judges of this initiative's success, • The IT department who build and operate the technology • The finance department where the financial implications will be seen, • Customer-facing staff who will reflect the changes when dealing with the clients. A significant project will require a cascade of sponsorship, such that all affected parts of the organization hear strong support from their leadership. If the message is delivered from the top and reinforced by the immediate management, staff are far more likely to believe in the case for change and to act in support of the changes.

For critical business change programmes the message should come from the very top. Get

the Project Sponsor to engage the Chief Executive as the prime source of sponsorship messages. (You may find yourself writing the words for the Project Sponsor to give to the Chief Executive - but the key thing is that it is then seen as the Chief Executive's personal message.)

consciously. Understanding their position requires more than listening to what they say. organizational Change Management specialists use an array of diagnostic tools to uncover the true characteristics and attitudes of the target populations.

Not everyone listens attentively to their Chief Executive, so it is important that these messages are cascaded down to all parts of the organization, with local management echoing and supporting the party line.

The most common response to impending change is a negative response where, initially at least, the target population sees the change as a bad or threatening thing. Psychologists have researched these "bad news" responses and found that there is a common emotional response. This chart shows how the individuals oscillate between inactivity and high emotion. Assuming the final outcome can represent a good thing from their perspective, the goal is to leave them in favour of the change and highly motivated to make it work.

Case Study A large, multi-divisional professional services firm was changing its time sheet system affecting every member of the organization. They recognised the need for acceptance and compliance from everyone so they built an allencompassing sponsorship cascade. When the team was finalised it was apparent that the sponsorship team was considerably larger than the project team building the new system.

Here are some thoughts that might be expressed by someone passing through the "bad news" curve:

Resistance to Change By definition, people are affected by change. A few will comfortably accommodate any degree of change, but most people have a change journey to undertake. Part of the art of organizational Change Management is to:

Oh no!

understand what journey you want which populations to take (it may not be the same for everyone),

It can't be true!

assess what their attitude is likely to be, and

That's it - after 20 years of service they want me to...

use that knowledge to guide them in the right direction. Many people will hide their negative feelings. It is not wise to be openly critical of your bosses and their new ideas. Some people will not even be aware of their own resistance which, nevertheless, affects their behaviour sub-

You cannot be serious!!! Can we sort this out some other way?

Am I going to be part of this? Yes, I can live with this - it's not bad really. The "Good News" Curve A different emotional curve may occur where individuals are initially in favour of the change. November

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In the "good news" curve, the risk is that they will be disappointed by the reality of the change or the effort it will take to achieve it.

attitude. That may be taking the principle too far - but, if there is going to be resistance, try to deal with it early. Using the Right Change Style

In these cases, you should recognise the likelihood of disappointment during the change process. Be ready to lift them out of the trough in time to benefit from their enthusiasm. Resistance to change is normal. The Project Manager should expect to encounter it and deal with it. The worst time to encounter resistance is during the cut over to the new solution. Transition is usually a busy, critical, high-risk period when the last thing you need is a lack of co-operation from the target population.

Try to surface issues and resistance earlier in the project so that there is time to get the target population engaged before any damage is caused. Some organizational Change Management experts suggest that you should deliberately upset the target population early in the project so that you can guide them through the emotional curve and change their

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The design of the project's approach should take into account the optimum style of addressing organizational change issues. In general, the target population will be more supportive of the changes if they have been part of the change process. The cynical view is that you should make them feel part of the process even if you prefer to ignore what they have to say. In fact, their active participation is likely to add to the quality of the solution - it should be taken seriously. Conversely, if they feel their views were sought then ignored they are likely to become more resistant. Working with a broad selection of the target population adds time and cost to the project. The degree to which you involve them will depend on the magnitude of the change. A straightforward non-controversial change may require no previous contact. If, for example, you are simply introducing a new set of expense codes you can publish the message "with effect from 1st April, new codes must be used as per the attached book". Conversely, if you are making huge changes to the job and lifestyle of the target population you will need to work with them to gain their co-operation, for example, if you wish them to re-locate voluntarily and re-train for substantially altered jobs. Here are some change styles that may be appropriate: • Collaborative - The target population are engaged in the change process, typically through cascading workshops or meetings. They will be kept up to date on the issues. Their views will be actively sought and acted upon. Feedback will demonstrate how their input has been acted upon.

• Consultative - The target population is informed about the changes and their views are sought. • Directive - The workforce is informed about the changes and why those changes are important. • Coercive - The workforce is told that they must obey the new instructions.

Communication One of the main tools for promoting change is communication. Early in the project an initial approach to communication will be formulated. It has two main purposes: • to convey important information that the audience needs to know, and • to promote organizational change. Messages supporting the project's change objectives should be carefully constructed. The best media should be identified to convey the right messages to the right people at the right time. During the project, these messages and methods will be refined based upon achievements, feedback and the changing circumstances of the project.

Case Study A computer hardware and services supplier needed to restructure the workforce to achieve dramatic cost savings. They decided upon a fully collaborative approach where all employees were invited to a series of workshops to examine the case for change, analyse the problems and define solutions. By the end of the process, not only were the employees fully backing the restructuring, but individuals were even recognising that they themselves would be redundant and volunteering to leave. Case Study An organizational Change Management expert was addressing an audience at a conference. After some time, a senior member of the armed forces was feeling highly frustrated. He stood up and asked for an explanation. "I don't see the point of all this", he said. "I give an order and my people carry it out." Who was right? Why should the workforce not just do as they are told?

Organizational Change Management at Phase Start For each phase the change management plan will be prepared in detail. Input and feedback from previous phases will inevitably lead to modifications to the overall approach. Update the Sponsorship Map to show who is involved at this stage and what is required of them. As part of the launch activities for the new phase, sponsors should be informed, briefed and reanimated. Their continuing support should be ensured. Often a new phase means new team members and new participants from the business. Make sure there is a good process to capture their support and enthusiasm. Organizational Change Management During the Project Organizational Change Management techniques fall into two main types: • input - analysing the problem, and • output - inducing organizational change. It may also be appropriate to couple these organizational issues and needs with the November

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mainstream design work of the project, so that certain issues could be solved by the way the solution is designed. It may be easier to make the solution fit the people rather than the people fit the solution. The input activities are essentially forms of factfinding and analysis. Organizational Change Management experts have many specialised tools to: • identify a population, • assess that population's capabilities, attitude, behavior, culture, • define the change goals, and • determine what is required to bring about that change. In the absence of an expert you would fall back on basic fact finding and analysis, coupled with common sense and experience. Output activities tend to be various forms of communication, for example: • communicating messages • coaching

Although the change management analysis, design and planning may be specialist tasks, much of the change output can be applied by other project team members. All team members will have opportunities to spread the right message. In many cases, the way they approach a given activity might have a significant affect on the target population increasing or decreasing resistance. Non-specialist team members should be given the basic skills and understanding to promote organizational change. They should also be guided by the specialists (if any) and by the project's change management approach and planning. 2007

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But the project managers were unanimous. One summed it up - "what we need is a big brick wall to keep the users away from us". That is a problem with a collaborative approach - what do you do when the population turns in the wrong direction? Organizational Change Management at Phase End The end of a phase is always a good time to review progress. Many organizational change activities are imprecise in their effect. It can be hard to measure whether the target population has now become sufficiently supportive for the project to succeed. • did we really understand the barriers?

• collaborative workshops.

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A Project Management expert was hired to coach the IT project managers of telecommunications service provider. In a "collaborative" style, he led a conversation about the relationship with the business, trying to draw out a consensus that the business and its end users were essential players in building a successful IT solution.

Take a fresh look at the organizational issues:

• setting up sponsorship cascades

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• how effective were the actions taken? • what more do we need to achieve? The conclusions will be fed into the planning for the next phase of work. Organizational Change Management at Project End The test of change management is whether the new business solution can be launched successfully in as efficient and pain-free a manner as possible. The lead up to the transition is often the most intense period. In many cases it is the first time the affected populations really become aware of the changes (although, as you saw above, it is not wise to tackle change issues late in the project).

Now they are confronted with changed jobs, new procedures, new skill requirements, training courses, and maybe even physical relocation. In some projects not all the current workforce will be required for the new solution. Dealing with the painful process of redundancy is normally left to the HR and line management functions. There are, however, two big issues for the Project Manager: • The redundant staff will be required to operate the current systems and processes until the new solution is ready - and maybe for some period of parallel running. Since it is a legal or contractual requirement in most countries to announce potential redundancies well in advance and to give individuals notice before their departure date, the question is how to ensure they give good service and do no damage to the organization or the new systems. • There may also be implications for the survivors - those people who you are relying upon to deliver the new solution. They may be affected by the bad news concerning their

colleagues. They may even go through a period of uncertainty when they do not know whether or not they themselves will be retained. What needs to be done to maintain their support and enthusiasm? Bear in mind that the same issues could confront project team members as well as the target population. By this stage in a major change, there needs to be a substantial support mechanism for the target population. As the key messages are communicated, the project team needs to be ready to help and prepared for the inevitable issues. By this time, the sponsorship cascade should be complete and solid - often extending down to local champions carefully placed in the users' teams. Support mechanisms will ease the users' troubles, for example with appropriate training at the right time, desk-side coaching, good help desk/call center support. Organizational Change Management should not stop with the end of the project. During the Benefit Realisation stage of the life cycle, continuing emphasis will be needed to encourage the community to adapt to the new ways of working and get the most from the change.

Reprinted with permission from the author. • http://www.epmbook.com/orgchange.htm November

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LEADING WHOLESOME CHANGE IN INTEGRAL WAY ASHISH PANDEY

Abstract

The article proposes an integral view of organization and leading change based on literature and real life examples. Integral view is based on four quadrants of reality given by Ken Wilber and effectively integrates the diverse perspectives about organizations and organizational change.

Introduction

Ashish Pandey is a consultant and leading the Research and Development function at Pragati Leadership Institute, Pune, India. He has been FPM Scholar at Management Development Institute, Gurgaon, and has received best paper awards from different national and international forums - at I.I.Sc., Banglore, I.I.M. Indore and Infosys Leadership Institute, Mysore. His research works are included in journals like Journal of Business Ethics, Journal of European Industrial Training, Global Business Review, Psychological Studies, and Indian Journal of Training and Development.

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Change is the reality. In Sanskrit language 'world' is translated as 'vishwa'. Etymologically it comes from the root word 'vish' meaning spreading, that which is never same at two different points of time. Change is not an occurrence but the way of existence. But 'leading and managing change' has become a matter of systematic enquiry in last two-three decades. Particularly last two decades have seen dramatic changes in the corporate world characterized by richness in knowledge, unprecedented levels of business operations: monetarily and geographically, unprecedented level of diversity, and turbulence. These are the major triggers of organizational change. The way HR professionals along with business leaders deal with these issues is going to drive the practice as well as the theoretical development in the discipline of leading change. Models and Approaches of Change Management Various models and theories are proposed by consultants and academics for effectively managing and leading change. Higgs and Rowland (2005) gave a useful typology of the change models. 2007

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Looking at the change management literature we come across two predominant types of the models. On the basis of the basic assumption being followed change models can be put on a continuum. One end of the continuum represents deterministic models in which change is considered as predictable phenomenon. Ontologically organizational change is considered to be step by step process which can be designed and consciously implemented by the leaders. Lewins three steps model and John Kotter's model are the most widely referred models in this category. Another end of the continuum represents the change models and approaches in which change is considered to a complex phenomenon. Most of the models in this category draw hugely from the systems approach. Some of the basic tenets of these notions are that organizations are living systems. Like any other living system organizations also shows the characteristics of emergence, delay and feed back and cannot be change deterministically. Notions of Whetley (1992), Senge et al. (1999) etc. are some of the predominant voices in this category.

A living system can never be directed, only disturbed (Kellner-Roger, 1998). Therefore leaders should not believe that the careful crafting of an organizational message will be understood uniformly across organizational layers or that memorized value statements create shared meaning. The interpretation of message and reactions to it will be dependent on selective perception and interpretation of individuals who receive it. That's why it is important to explore the diversity in the organization (instead of adopting uniform approach of change as assumed in deterministic models) to develop a more coherent understanding, a shared sense of what is significant. Deterministic and systemic views represent the two equally powerful ways of thinking situated at two ends of the continuum in their purest form. We perhaps cannot getaway with either of the approaches. My submission in this article is that integral view of the organization and wholesome way of change can bring new insights to integrate both the views for leading the change process effectively. Integral view of change is based on Wilber's (2002) four quadrant approach of reality. This approach facilitates the social event to be analyzed in terms of its multilevel nature, i.e. its micro, meso and macro forms thus can be used in the field of organization development, leadership, change management etc. Integral View of Organization Integral approach proposes that any phenomenon has two fundamental dimensions of existence. These are the interior-exterior dimension and the individual-collective dimension. The interior-exterior dimension refers to the relationship between the intangible world of subjective experience and the tangible world of observable behaviors. The individualcollective dimension refers to the relationship between the individual experience and

collective world. The interaction of these dimensions produces the fundamental domains or quadrants of reality. The domain of individual-subjective, i.e. 'I' quadrant represents the personal experience and meaning. Domain of individual exteriors is the behavioral quadrant. Domain of collective interiors is the cultural quadrant and the domain of collective exteriors quadrant represents the tangible social system and processes. As shown in figure 1 organization can also be understood in this frame. 'I' quadrant of the organization represents the personal meaning and values of the people working in the organization. While working in the organizations, people also subscribe to their personal aspirations, goals and sense making. Organizations are the places where individual meaning of the members is created and shaped (Fineman, 1993). Upper right (IT) quadrant represents the observable behavior of the people working in the organization. Code of conduct, dress codes, and other behavioral norms are represented by this quadrant. Both the lower quadrants represent the collective system of the organization. Left lower (ITS) quadrants represent tangible processes, structures and observable aspects of social system of the organization. Formal organizational design, production process, information technology related processes are some of the representative components of ITS quadrant. Right-lower (WE) quadrant

Figure 1: Four Quadrants of Organizational Reality (adapted from Wilber, 2002)

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represents the culture of the organization. Organization culture is resultant of shared meaning, values and beliefs of the organization. An organization is combination of all these quadrants. Organization is so much of individual experience and behavior as much it is systems, processes and culture. Integral approach suggests that all the four quadrants are equally important. Wholesome change and development of the organization is the result of sustained efforts and appropriate inputs on all the quadrants. Over or under emphasis on one or two quadrants at the cost of others is reflected in the poor organizational performance in the long run. Types of Change: An Integral View Literature on organizational change distinguishes between two general types of change: organizational transition or improvement and organizational transformation. As the more traditional approach, organizational transition or improvement is relatively well defined and circumscribed in terms of its process and technologies. Generally speaking organizational transition focuses on the change process as a bottom-up and more of process based phenomenon. More importantly for this discussion, it represents the more traditional deterministic management perspective. Looking from the integral perspective organizational

Figure 2: Foci of Different Kinds of Organizational Change

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transition and improvement related change efforts are more focused on right quadrants representing observable individual behavior and organizational systems, processes and design aspects. Whereas Organizational Transformation is more a holistic pursuit focused on deeper involvement of individuals and cultural transformation. Case studies of major organizational transformations which had also been sustained over a period time (e.g. Tata Steel, GE, Toyoto etc.) suggest the importance of focusing on upper and lower left quadrant. Figure 2 summarizes this point. Different Foci of Change Interventions If we go deeper and examine the different interventions to bring change in the organizations, we can observe that most of these interventions focus on some specific quadrants of organizational reality as depicted in figure 3. For example T-group training focuses on 'I' quadrant and most of the behavioral training are largely focused on 'IT' quadrant. ERP (Enterprise Resource Planning) or re engineering are the interventions largely focus on 'ITS' quadrant. Whereas interventions related to team building and cultural integration etc focus on 'WE' quadrant of the organization. Submission here is that key to successfully leading the change is not trying one intervention after another but in right balance of appropriate and well aligned interventions in different quadrants. I have studied a research and development organization where state of art Knowledge Management (KM) system was installed (ITS quadrant) but its impact on 'WE' quadrant is not consciously traced and designed. No one was sure that whether the KM system have any incremental value on real time collaboration amongst the scientists for knowledge creation and dissemination. Similarly I have also observed an organization where culture of open communication and great deal of authenticity (I and WE quadrants) exist

but in absence of formal process of knowledge sharing and documentation the positive culture does not result in overall knowledge creation and organizational learning and eventually plausible business benefits.

Figure 3: Different Foci of Varied Change Interventions

Utility of Integrative View in Leading Change More than 70 percent change initiatives does not achieve the intended results. Even ruthless cost cutting and downsizing (rightsizing as it is mentioned) doesn't guarantee business impact in the long run (Bleakley, 1993, Henkoff, 1994). On the other hand building organizational capabilities by focusing on personal and shared meaning ('I' and 'WE' quadrants) may not result in creating market value of the firm (Nohria and Beer, 2000). Many times whole organizations are sent to change programs in diversity, creativity, time management, personal effectiveness etc. Many individuals profoundly changed by these programs but many a time their personal change doesn't translate into organizational change. Research shows similar findings about specific interventions like ERP, KM, Behavioral training etc. The business value of ERP implementations has been extensively debated in trade periodicals and research is throwing diverse conclusions (Hitt, Wu and Xiaoge, 2002). HR professionals and trainers are struggling to measure the return on investment in attitudinal and behavioral training. My submission is that intervention in one quadrant also needs helpful mechanisms being

designed and implemented in other quadrants of organizational reality for sustainable result. In the form of scientific management, TQM, Knowledge Management, re engineering or core competence the field of management has been over enthusiastic about one or other management technique or approach. Overreliance on any approach confines the organization efforts in one or two quadrants and do not make change wholesome, sustainable and joyful. This notion is further substantiated if we closely examine the most successful and profound changes being led or managed in modern time. Two examples of such kinds of changes are briefly described to further explain the integral approach of wholesome change. Two Examples of Integrative and Wholesome Change First example is of organizational transformation of General Electrical (GE). 25 lessons by Jack Welch summarize his approach of organizational transformation being applied in GE during 18 years of his leadership. Closer examinations of these lessons suggest that they implicitly cover the four quadrants of organizational reality. His statement that leaders are wanted in the organization that can energize, excite and inspire rather than enervate, depress, and control indicates the importance of 'I' quadrant. Along with the global presence, he emphasized to behave like a small company in term of open communication, informality and maximum involvement of the people. This notion covers the 'IT' quadrant of organization. Six Sigma had been institutionalized as signature process in GE. This reflects the streamlining and appropriate emphasis on 'ITS' quadrant of the organization. His statement that numbers aren't the vision; numbers are the products. Focus more on the softer values of building a team, sharing ideas, exciting others and emphasize and organizational transformation agenda. November

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Second example of the change in integral and wholesome way is of Indian freedom struggle. In terms of scale, impact and most importantly 'purity of means' this is one of the rarest of rare examples of 'change'. Objective here is to see the change initiatives introduced by Mahatma Gandhi and how they were so effectively covering all four quadrants of reality. The most important contribution of Mahatma Gandhi in the Indian freedom struggle was to generate a mass movement for independence. He was able to create personal meaning for Indian freedom amongst common man in India across different strata of society. This was the success in 'I' quadrant. 'I' quadrant success was largely based on movement for Swadeshi, spinning the wheel etc. Using swadeshi (indigenous) goods, burning the videshi cloth, Namak Satyagrah, and spinning wheel etc. represents the 'IT' quadrant. Though these were seemingly small activities but of great value in spreading of awareness. These seemingly small activities were able to create personal meaning amongst the fellow citizens. In the 'ITS' quadrant based on his own moral authority, clear thinking and guidance many social catalysts were prepared who became nodal centers for freedom movement and other social activities. In 'WE' quadrant he could create shared vision of independence and shared values of democracy,

social harmony and secularism to great extent. Eventually these values continued to be ideals for the independent India. Two examples briefly described above indicate the utility of integral view for leading change wholesome change in organization. It doesn't mean that management had been totally oblivion to different aspects of organizational life. Nocols (1994) talked about increasing importance of creating meaning at work. Wakhlu (2000) talked about engagement at the level of heart and spirit for wholesome life of the organization. Utility of this framework is in its simplicity and power of comprehensiveness to juxtapose the seemingly diverse nature of organizational reality. A natural outcome of this discourse and examples quoted here is the importance of wholesome leadership for implementing wholesome change. Ability of a leader to apply the integral or wholesome approach of change in the organization is inevitably linked to his or her own personal view of reality. Leaders with integral view are the prerequisites of integral or wholesome change process. Perhaps teaching of Lao-tzu is valuable in this regards when he says "the way to do is to be". The message is not different from what Mahatma Gandhi said "One must be the change which he wants to see in the world".

References Bleakley, F.R., (1993), ‘Many companies try management fads, only to see them flop’, Wall Street Journal, 6 July 1993, pp. A1, A8. Fineman, S. (1993), in S. Fineman (edi), Emotion in organizations, Sage, Newbury Park, CA. Henkoff, R. (1994), Getting beyond downsizing”, Fortune, 10 January, pp. 58-64.

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Higgs, M. and Rowland, D. (2005), ‘All changes great and small: Exploring approaches to change and its leadership’, Journal of Change Management, vol. 5, iss. 2, pp. 121-151. Hitt, Lorin M., Wu, D. J. and Xiaoge Zhou (2002), ‘Investment in enterprise resource planning: Business impact and productivity measure’, Journal of Management Information Systems, vol. 19, iss. 1, pp. 71-98. Kellner Roger, M. (1998). ‘Changing the way we change’, Perspectives. Kotter, J. (1996), Leading Change, HBS Press, Boston. Nichols, M. (1994). ‘Does new age business have a message for managers?’, Harvard Business Review, vol. 72, iss. 2, pp. 52-60. Nohria, N. and Beer, M. (2000), ‘Cracking the code of change’, Harvard Business Review, vol. 78, iss. 3, 133-141. Senge, P.M. (1997), ‘Communities of leaders and learners’, Harvard Business Review, vol. 75, iss. 5, pp. 30-2. Wilber, K. (2002), Spectrum of consciousness, Pub. Motilal Bavarsidas, New Delhi. Wheatley, M. J. (1992), Leadership and the new science, Berrett-Koehler, San Francisco.

Endnotes 1 Earlier draft of the paper was presented in Global OD Summit, 2006 at Mysore and was adjudged the Best Paper in Future Focus Stream. Valuable inputs of Prof. Rajen Gupta of M.D.I., Gurgaon, and Arun Wakhlu, Pragati Leadership Institute, Pune, are gratefully acknowledged. i Lewin's model change is the most widely referred by practitioners and in the academics alike. It talks about three phases of change process. First phase of the change is dissatisfaction with the status quo. Second stage is about identifying and mobilizing the resources required effecting the change. Third stage is embedding the new ways of working in the fabric of the organization. Kotter's model gives eight steps of change starting from creating urgency to institutionalization of change. ii Like any living systems organizations also display capacity for sophisticated, coordinated behaviors. Yet these behaviors are never the result of directive leadership, strategic plans, or engineered solutions. They arise as if by magic, surprising even the members of the system, through a process called emergence. Emergence is the capacity of the system that resides only in the system not in the individuals. Surprise of emergent capacity confronts most of our trusted beliefs about how to create change in any organization. iii Interestingly Prof. J.K. Jain of Management Development Institute, Gurgaon, teaches management lessons based on Gandhian way in a reputed institute in France. Author is not aware about the systematic teaching explicitly based on Gandhian principles being imparted in any business school in India.

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CHANGE MANAGEMENT: SOME PRACTICAL CONSIDERATIONS BHAWANA MISHRA Abstract

This article takes a practical view on change management in the every day lives of HR and business managers. Implementable ideas have been presented for dealing with obstacles to change before it occurs, managing change during the process and coping with poorly planned change. In order to keep the emphasis on practical considerations, there is a deliberate absence of reference to the vast body of academic work and research in the area of change management.

Introduction

Bhawana is the Business Director of SHL India. An Applied Psychologist by training, she worked with leading consulting firms PricewaterhouseCoopers and Arthur Andersen, prior to joining SHL six years back.

As I started to structure my thoughts on this article, I decided to run a Google search on change management, to understand the current thinking on the subject. At the least, the results were astounding. Google returned 574 million links in 0.05 seconds for a generic search on 'change management'. So I got specific in my search: 'change management definition' resulted in 41.2 million links, 'change management models' in 49.8 million links and 'change management process' led to 168 million links! The message to me was very clear and only confirmed my thinking that enough has been said and written on this subject. So my question on what I could say that was new and relevant, still remained. Then I started to think of the concerns and experiences my clients have shared with me over the years when implementing various initiatives -- a performance management system, a career planning initiative, processes such as Development Centres, 360 feedback and so on. So I felt that this was a good opportunity for me

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to address those concerns and offer some practical and implementable ideas to deal with change. Accordingly, I have structured this article in three parts: • Preparing for change: Understanding the five most commonly faced obstacles in implementing effective and lasting change; • Managing change: A synthesis of best practices that successful change programs have followed; and • Coping with poorly planned change: Ideas for damage control if a change initiative is on the verge of failure. Preparing for Change: Understanding Obstacles Even before we start to introduce a change, however big or small that may be, we should be conscious of existing practices, processes and cultures that may become hindrances in success. The obstacles are often unique for companies and not planning for them in advance leads to interim and incomplete solutions that are deployed to deal with them at the last minute.

• Organization Structure Rigid hierarchical structures may be restrictive in implementing new initiatives. For example, if the aim is to introduce an ERP system for Purchase, the individual level accountability that it promotes will not succeed if people are used to having everything signed by the functional head. • Cultural Norms The most common HR example of this is if line managers have been used to being responsible for staff progressions and methods such as Assessment Centres are suddenly introduced. There is bound to be resistance in the form of "we have always done it this way" if this is not addressed prior to the change being initiated. • Performance Metrics Early thought has to be given to whether the current performance management system may hinder implementation of the new initiative. For example, introducing a new CRM system will remain another 'initiative' if performance assessment of sales staff only assesses revenues generated and not customer satisfaction or related metrics. • Senior Management's Behaviours A company was trying to bring about greater customer orientation in its people. But survey after survey revealed that this was not successful. Consolidation of 360 feedback data on the senior management revealed that they were consistently driving systems and process orientation and not speaking the customer language. Naturally, employees knew what the bosses were looking for. • Communication Communication begins well before the initiative itself. An announcement that a new initiative in a couple of weeks will impact how people are paid or promoted is bound to cause resentment, however fair it might be. Likewise,

what is communicated is often not true or only the partial truth. There are innumerable companies that have communicated to employees that a certain assessment programme is for identifying development needs, and then gone ahead and used it for career progressions. People understand such things and an experience like this undermines the credibility of the senior management and HR for a long time to come. Managing Change Several models have been developed over the years to help manage change and deal with it most effectively. However, as is often true of academic and research work, a lot of them are not easy to remember or implement in a real organizational context. Based on the review of some of the available literature, and my own experiences in working with clients, I have developed the 'Iceberg Approach to Managing Change', which I hope will serve as a ready reckoner for dealing with change projects. At the top of the Iceberg are surface issues such as understanding the pain area that requires change to be brought about and building acceptance amongst people about the need for change. As we go deeper, the issues are also more evolved, but if dealt with successfully, will lead to a lasting and effective change programme. The Iceberg approach to managing change

I dentify the need C ommunicate objectives and processes E ngage People B uild change communities E valuate and measure success R einforce positive change behaviours G row and develop during change To elaborate : • Identify the need It is critical to determine whether the need is a November

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true requirement of the company or a good-todo thing because it appears to be 'best practice'. Also, what is the impact that it is expected to make. A diagnosis of the current state is critical to understand the extent and nature of change that can be introduced. For example, 360 feedback cannot be introduced in a company that has never done assessments seriously. Incremental steps are always long lasting than wide-scale change introduced in a hurry. • Communicate objectives and change process Communication is not only about informing people about the initiatives, but targeting the communication to the audience, thinking through channels of communication and building feedback mechanisms to ensure that the messages have been understood. Communication is most credible when there is active participation of the project sponsors, in particular, the top management. • Engage people If people feel that it is an organization-wide initiative and everyone has a role to play, their participation and ownership is that much more real and involved. • Build change communities All organizations have people forming informal cohorts and support groups. These are particularly useful in a change program, as they can be used to spread formal and informal messages and also build acceptance. organizations can also orchestrate these by creating self-help teams that work on making the new initiative work and seeing people through it. • Evaluate and measure success Often companies assess achievement of change objectives after they are completed. This aspect actually needs to be considered before the change programme is introduced. Measurement should take place through the programme to ensure it is working and course correction should be made based on feedback

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received. Pilot projects for large initiatives are often very useful for collecting early feedback on what are likely to be the key issues. • Reinforce positive change behaviours It's a simple Pavlovian principle. No change will last if there is no incentive to make it long lasting. So reward and recognition mechanisms that reinforce the changed behaviours are critical to any change programme. For example, a line manager may enjoy giving employee feedback once in a while, but s/he will make employee development planning a regimen if it also impacts his or her success. • Grow and develop during change Finally, most often, change involves acquiring some new skill sets or using new processes or methods. People should get the desired training, coaching and technology support to adopt change faster and effectively. Training also gives employees the confidence of having acquired newer skill sets, thereby building a positive attitude to the change initiative. • Coping with Poorly Planned Change Having said all of this, we don't always have the luxury to plan things or be in control of the circumstances. Typically, this happens when a mangers joins an organization while some programme has been or is being implemented. Several HR managers will recount the nightmares they experienced when they joined and had to grapple with the impact of an ERP solution introduced in a hurry or a 360 programme launched without a plan for follow up action. Often, they would also have been blamed for everything that went wrong! However painful it may be, we cannot avoid dealing with this form of change as well; one that we were not instrumental in introducing, but nevertheless have to deal with. So where do we begin? • Seek Feedback The first way of building credibility is to seek feedback on what has worked and what has not. This instils confidence in people that you would like to do something about it. Depending on the

magnitude of the programme, you can use formal surveys or informal grapevine and other sources of information to seek this feedback. A word of caution: do not do this if you have the slightest doubt on whether you will be able to action some of the issues that come up.

to the organization's success, re-visit the reward and recognition mechanisms that have been put in place. Ensure that there is a direct linkage between change behavior and reward. As importantly, ensure that this is communicated and understood by people.

• Recognise and Accept Individual Differences

Coach and Develop

It is important to understand that people react differently to the same circumstances. Spread the message across that it is alright to do so. The ADKAR® model (Hiatt, 2006) can help you plan effectively for a new change or diagnose why a current change is failing. In some cases, corrective action can be taken and the change successfully implemented. The five elements of ADKAR are: • • • •

Awareness of the need for change. Desire to make the change happen. Knowledge about how to change. Ability to implement new skills and behaviours. • Reinforcement to retain the change once it has been made. • Rebuild Sponsorship Often you will find that if an initiative has prolonged for a length of time, the commitment of the project sponsors also vanes. Ensure renewed commitment from the project sponsors, in particularly the top management, for their two key roles in the change process - visible participation and communication. Employees do what reflects them in a positive light - setting this expectation from the management reinforces organizational commitment. Strengthen Reinforcements If the initiative has been identified to be critical

Resistance usually stems from a fear of the unknown. This can be dealt with information and equipping people to deal with it. Everyone is more comfortable when they know what to expect and are prepared to deal with it. An absence of either can cause disruption. So it is never too late to provide the relevant coaching and training to help people cope with change. Identify Agents Because some of the change has already occurred, there must be some people who have benefited from it or feel that it is for the good of the organization. Identify and use such people to spread the message to the rest of the organization. However, ensure that these people are seen to be unbiased and not blind supporters of the management. Identify Add-on Benefits of Change Chances are there has already been much communication on what are the benefits an initiative will bring about. If this is the case, try to identify add-on benefits that were not already communicated. They can bring about renewed vigour if they can be demonstrated to be relevant to specific groups of people. The issues and ideas discussed here are by no means exhaustive. However, I hope that I have provided a few reference points that HR and line managers alike will find of use in implementing any change initiative in their organizations.

Bibliography Hiatt, Jeffrey M. (2006). ADKAR: a model for change in business, government and our community. Prosci Research, Loveland, USA Kotter, J P. (1996). Leading Change. Harvard Business School Press. Boston, Massachusetts. Kotter, J P and Cohen, D S. (2002). The Heart of Change. Harvard Business School Press. Boston, Massachusetts. Mark Large, DLTP Delivery Support Manager. (2006). Change: How to do it and Make it Work, Tools and Techniques for Managing Change. Retrieved on 29th Oct 2007 at www.ams.mod.uk/content/docs/change_mgt/handbook.pdf Partridge, L. (1999). Managing People, Book One. Financial Times Management. London. November

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FUNDAMENTAL CHANGE IN EDUCATION QUALITY DILEEP RANJEKAR

Dileep Ranjekar, the Chief Executive Officer of Azim Premji Foundation, is a science Graduate and has a Post Graduate Diploma of Business Management as well as Master's degree in Personnel Management and Industrial Relations from Tata Institute of Social Sciences, Mumbai. He joined Wipro from campus and became the Corporate Executive Vice President Human Resources. As CEO of Azim Premji Foundation,he is leading over 250 professionals and several hundred volunteers working towards realizing foundation's vision through the Foundation's current engagement with over 16,000 schools that have 50,000 teachers and 2.7 Million children with a missionary zeal.

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Experts often dish out the cliché "the only thing constant in life is change". We find more people around us telling others to change and explaining the importance of change in something or the other. Before my marriage I knew there were significant differences in the views and culture of my wife and I. However, I was confident that I would be able to change her - and am still struggling to change her after 27 years. Leaders tell their team members to change their methods or attitudes. Parents tell their children to change their habits and attitudes. And the children in turn tell their parents to understand the change that is happening in society and adapt to the same. And yet, one constant is that most people find it difficult to change. Scale of Change When you discuss "management of change" at "national level", the dynamics of change becomes even more complex. The imponderables and non-controllable s increase geometrically. At Azim Premji Foundation since we are essentially seeking to contribute to a systemic change in the quality of education in India we often debate and explore what would have the highest potential to create a possibility of such change. I discuss with other organizations with similar goals just one question - what would create the required change? Especially so, since we have a 2007

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National Education Policy that articulated the goals of education, the thrust areas and a way to achieve the goals way back in 1986. Every state in India has a fair amount of clarity on what should happen in their schools. They are clear that all children must be in the school, attending regularly and most importantly learning as per the expected goals of the curriculum or of the National Education Policy. Nature and Size of the Problem However, after 60 years of independence, here is the performance of India in key aspects of quality of elementary education: • India accounts for 16% of the global population but contributes to just about 1.16% of world's GDP • Close to 20 million children are still outside the school. • Attendance of the children and completion of education cycle is a major challenge. For instance, if 100 children get enrolled in the First standard, only about 52 complete education cycle up to Eighth standard and only about 31%. • Over 33% of the children are unable to read or write in class V. • Our literacy level is 65% vs. world average literacy level of 80%. • Only about 8% children pursue higher education.

• In only about 10% of the school - over 60% children achieve the expected learning competencies. Needless to say, India has not succeeded in bringing about the change at national level. And this is not only true for education but also in other development areas such as health, nutrition and poverty. In elementary education, we are referring to a system that consists of 200 mln children in the age group of 6-14 years in 1.3 million schools. What Induces a Large Scale Change? There is very little understanding on this issue. If you analyse the circumstance in which major changes have happened across the world, you will realize that it has been either a major attack from outside or a major external challenge that jeopardized the national pride or national security. So the science teaching campaign in the US was a result of the challenge that was created by the USSR by successfully launching the space program before the US did. Or the maths teaching revolution in Japan was a result of major challenge from China. In our own country, the war of China and Pakistan in the 1960s had a major uniting effect on the country and a lot of territorial and religious barriers broke down when the national security was under attack. The interesting thing about education is that the purpose of education itself is to create or contribute to "social change". However, more often than not, education is being used to simply maintain status quo and to create a replica of existing society. Our Analysis of Issues in Education After over 6 years of grass root work, we at Azim Premji Foundation have had a some critical insights in the domain of education. Significant improvement in access: Since over 85% of the elementary education happens in the Government schools, the state holds the key on the supply or access side. During the past

10 years, some of the basic access issues have been by and large resolved. For over 95% of the habitations in the country there is a primary school within 1 km and a higher primary school within 3 kms. There are several other changes that have happened. The teacher pupil ratio has improved to 1:42 (though still not sufficient and we still have over 75% schools engaged in an unplanned multigrade teaching where one teacher reaches several grades together). Midday meal program has been introduced in majority of the schools (though the quality needs improvement), classrooms have increased, budgets for teacher training are available etc. Quality of learning - the biggest issue: The single most important aspect that we have not been able to change in the schools is the quality of education. The biggest problem being education is equated to ability to "rote memorize". The education system has forgotten the education goals that are articulated by the National Education Policy. The entire system has become a drill to remember the text books than understand, comprehend, apply, analyse, innovate that are so critical to building a knowledge society. Need to break myths: There have been several aspects that need change and several myths need to be broken. The key among them are: • Mindset # 1: Children when they enter the schools are deficient and need to fixed. Reality: Even before the children arrive in the schools, they have huge potential and that needs to be realized. • Mindset # 2: Learning takes place in the head and not in the body as a whole. Reality: Learning and abilities reside in various parts of the body and mind. • Mindset # 3: Everyone learns or should learn in the same way. November

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Reality: Various individuals learn at different pace at different times • Mindset # 4: Learning takes place in the classroom and not outside the classroom. Reality: Every life experience contributes to learning anywhere. • Mindset # 5: There are smart kids and dumb kids. Reality: Each child is uniquely gifted and possesses talents in multiple areas. It is absolutely mind boggling to observe how the entire elementary education system, that consists of 5.5 Mln teachers, 1 Mln education functionaries and spends over Rs. 1,40,000 crore engages most of the time on issues that are not related to achieving the quality of education in the classroom. There is a lot of talk on appointing teachers, transferring teachers, building classrooms, getting reports from the schools, enrolment, attendance so on and so forth…. but very little discussion on quality of what happens in the classroom. Some Enablers of Change The National Curriculum Framework has attempted to define the process that could achieve the goals of education. However, in addition to the difficulties and lack of guidance on converting the curriculum into classroom processes, probably the biggest challenge is its awareness among the teacher educators and the teachers. In our analysis, the most important change agents that could bring about the required change in the quality of education are: • Teachers • Education Administrators • Parents and community that can exert pressure on the schools • Examination reforms Irrespective of what happens in the rest of the education system and what people keep

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harping on--the crucible of learning in a formal and structured education system is the classroom. And this is where the teacher has the most pivotal role in influencing the learners. The teacher exists in a total system of education delivery that is needed to be supported by the education administrators - who among other things are also responsible for appointing, inducting, training, preparing and academically supporting the teachers. It is the parents that are most affected by the poor quality of education since it deprives their children from becoming responsible and effective citizens and bread-winners for the family. The current driver for change - the Examinations: The process that drives the behavior of almost the entire education system currently is the "Examination System". Examinations serve similar purpose as of the performance management system in the corporate organizations. In absolute terms there is nothing wrong - except that the current examination system is almost entirely focussed on testing the "rote memorization" of the students. Thus at the primary education level, in a story of "Hare and Tortoise" the questions that are asked are what did the hare say to tortoise or something similar - wherein the student has to remember who said what. Instead, the question should be "why did the tortoise win the race"? Unless the student has understood the story, there is no way the student would be able to answer the question. Similarly, in history subject, the focus tends to be on chronology of events and the years in which certain historical events happened. Instead the focus should be on the characters, their patriotism, their diplomacy, the failures of the society to recognize certain events, bravery, valor etc. It is important to understand that because the examinations focus excessively on rote

memorization, the focus of the teaching learning tends to be preparing the child for the narrow list of questions at the end of the lessons and not on the broader issues of education goals to be achieved through the subject. The basic beliefs in the National Curriculum Framework are: • Learning as a process is unique to each individual • Teaching with a 'prepared logical sequence' decided by teacher or others may result in little learning, that too, rote learning • Pedagogy is but a process for mediation of resources in the form of meaningful experiences catering to varied learning needs of learners The essential focus of the curriculum is: • Learner centric, not teacher centric • The focus is learning - not teaching • Processes that • recognize the diversity, flexibility and varied learning needs of the learners • Is culture and context sensitive • Forward looking • Life related The above reforms require radical change among the teachers, the process and the paradigm of all involved in the delivery of education. The fundamental difference in an assembly line approach to education and the child centric approach is that here the learner is capable of contributing to herself/himself. That the learner is able to learn through the exposure to experiences. That the learner is able to construct her/his own knowledge based on experience. This would force the education system to relook at several issues radically differently. Some of these would be:

• What kind of people become teachers? • Is the profession viewed respectable and rewarding enough to attract the best? • Is the teacher education curriculum relevant, experiential, teacher centric? • How is the process of appointment of teachers conducted? • Are we from time to time defining and redefining the teacher competencies to meet the challenges of the 21st century? • How is the in-service training of teachers carried out? • Who educates and ensures the quality of teacher educators? • How do we reach every rupee of the education budget to improve the quality of learning? • Are the examinations driving a classroom culture and process that is consistent with the National Curriculum Framework? • How are we enabling the teachers to use their freedom in the classroom - more meaningfully? • How do we address the issue of teacher absenteeism? • How do we create much higher performance consciousness among teachers? • How do we make parents aware of their responsibility in their children's education? • How do we educate the parents on what to expect as a result of education? Political Will to Change - Critical in a Democratic Set up Many of the above changes need enormous "Political Will" among the policy makers. The political masters must get themselves educated on relevant issues for quality education. The most critical issues are: November

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• Accord Highest Priority: Place the issue of education at par with the other three priorities - electricity (Bijilee), Roads (Sadak), and Water (Paani). Accept that education quality is fundamental to India's status as a developed nation. We ought to be knowledge creators and not mere knowledge receivers. • Allocation of Required Resources: Including financial budgets. For too long we have been speaking of allocating budgets that are equal to 6% of the GDP vs current allocation of about 3%. • Accountability for Quality Education: We need an attitude of catching the bull by the horn when it comes to performance of the delivery system. Illustratively, if almost 50% students fail in the board examinations, who is made accountable? Is it the education minister? The education secretary? The district or block education officer? The teacher? Or the hapless student or even more hapless parents? We have to fix the accountability suitably. • Measurement and Review: Review the status of quality of education at the highest level of political system: what gets reviewed and measured also gets prioritized by the system. • Enabling Policy Changes: quality improvement systems are often interlinked and need a holistic approach. Illustratively,

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mere appointing of good teachers would not help. You need to revamp the academic support and training system, address competence issues as well as motivation issues. And that requires fundamental policy changes in the risk reward system which is currently completely absent. One of the ministers with whom I was discussing the education quality issue told me that you need to make an all round and multidimensional effort if quality of education has to be impacted. You need to 'for instance' educate and influence the policy makers as well as law interpreters. Though the principles of "managing change" might be common, the way it works at the national level change is significantly different. Especially in a system where the subject is both a central as well as a state subject. Since the change implementers are fragmented, you need a greater advocacy thrust at a broader level and an equally powerful demonstration of change at the grass root level. And for this you need education activists at the grass root level who have the broader perspective of education. Thus, a strategy of achieving macro level change through series of "micro level" demonstrations of change as "proof of concept" is likely to work to raise the quality of education at a national level.

HOW HR CAN IGNITE 'HOT SPOTS' YOGI SRIRAM Abstract

The 6th National HRM Summit, organized under the auspices of All India Management Association(AIMA) was held on 19th & 20th October 2007. It brought together the author of HOT SPOTS - Lynda Gratton (LBS) and other eminent speakers from the Corporate World who spoke on four themes to discover how HR can ignite HOT SPOTS. In compiling the various ideas from speakers, the article tries to bring out how change can be brought through HR and leadership to create and sustain hot spots. The article thus heavily drives on the ideas of the book and the content of the summit. Context

Yogi Sriram is currently at Larsen & Toubro Limited as Executive Vice President (Human Resources & Administrative Services) for the E&C division. He had earlier rich experience with, Taj Group (Hotel arm of the TATA's) , Asea Brown Boveri , Dabur India, British Petroleum as H.R. Director (Africa, Middle East, Turkey & South Asia) covering 3 continents and 41 countries.He has a Honours degree in Economics from Shriram College of Commerce, Masters in Personnel Management & IR from the Tata Institute of Social Sciences, LL.B. from the University of Delhi and M.B.A. in Organization Behaviour from the Faculty of Management Studies (FMS), University of Delhi. He has been admitted as Fellow of the All India Management Association.

The biggest challenge facing the HR function today is to create and sustain an innovative work culture. With the Indian economy surging ahead and the Sensex surprising us each day with unexpected highs, the expectations from HR has increased many fold. The shortage of talent is being seen as the only big challenge in surfing this big wave of growth. HR has an opportunity, like never before, to attract, develop and retain this scarce and precious talent. But the new Gen Y that is represented by the young faces at the work place, are the real opportunity for unleashing potential and triggering quantum growth. We need excited people with passion for collaborating and innovating. HR has an opportunity to find ways to trigger this passion and commitment for innovation and excellence. Within organizations, there are periods when innovation and creativity flows unhindered and the resulting activity and positive energy create unexpected results. These condensed periods are called "Hot Spots". These can be ignited and sustained to create November

innovative and winning organizations where people are self-propelled and feel like giving their best, and sometimes even beyond. Prof. Lynda Gratton from London Business School , has explained in her book the people implications on strategy. Her book "Hot Spots: Why Some Teams, Workplaces, and Organizations Buzz with Energy - and Others Don't", is an international bestseller Inspired by her work, the Summit focused on "How HR can ignite 'Hot Spots'" with sharing of experiences and HR best practices and through dialogue at the Summit, that lead to new ideas on how to create excitement in the Work place. This Summit was designed to focus the attention of business leaders on creating Hot Spots that are the key to the success of human endeavour within an organization, group and team. There were also deliberations on competencies that HR professionals should develop to ignite these Hot Spots. The Take way of the Summit The Summit triggered plenty of ideas to ignite Hot Spots that 2007

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should create a collaborative and innovative work culture, since this culture is the key to attracting and retaining talent for building business in organizations. The Content Presentations and dialogue at the Summit covered examples of the HR function creating Hot Spots in organizations in various Sectors of business. The programme covered initiatives implemented, outlining the stories of success, challenges and failures in igniting Hot Spots The deliberations covered the skills that are required to execute such HR initiatives and how HR communities propose to build these skills quickly while organizations are restless for rapid talent build up. The Summit provided opportunities for learning through sharing of experiences of delegates who have championed HR innovations to achieve and sustain growth through Hot Spots. The Summit made the Coffee and Refreshment Breaks equally stimulating with opportunities to learn. Some Glimpses from the Summit Speeches Yogi Sriram - Executive Vice President (HR & Administrative Services) E&C L&T Ltd., who was also the summit director, shared some statistics about the Indian economy. Household income will triple in the coming 20 yrs and India will be the largest consumer economy by 2025. In terms of private spending India would be the same as the US by 2025. The Labor Force in India will dramatically increase as compared to countries like France, Australia etc. K Venkataraman, Member of the Board & President L&T Ltd. shared that old economy companies have the largest growth potential of market capitalization. They are the leading value creators in the market. These are the Engineering, Construction & Manufacturing sectors. Ira Bindra- Director HR- GE shared insights on how GE, a 116 billion dollar company is

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leveraging HR to create HOT SPOTS. She shared that GE was focusing on energizing partners and employees, attraction and retention of talent. She said that HR can reach new levels of excellence by earning the trust of the leadership team, through disciplined HR processes. Rajiv Narang, focused on orbit shifting innovation through generating escape velocity. For organizations to see Hot Spots, leaders should be aware of the organization's potential Hot Spots. A cooperative mindset is a mix of 3 elements, namely, intellectual mindset, social mindset, emotional mindset and a 4th addition by Akhouri was a financial mind set. According Akhouri of Hero Honda there are certain pre requisites for hot spots. These are created by the action of a leader and they are created by a sense of urgency. Yasho Verma of LG Electronics said his Company focused on 3 types of quality Environmental Quality, Transactional Quality, Process Quality. Ishan Raina- of OOH believed that Boundary Spanning meant redefining a category. According to him HR plays a very important role in combining ideas. These days' boundaries are getting demolished by various communication break thorough innovations like internet. Companies are shifting the focus from product to production. He talked about how companies can become talent magnets by investing time and money, identifying promising leaders, by encouraging feedback and support, developing teams and not individuals. Puneet Jetli- General Manager Mindtree Consulting said HR has to play 3 roles in boundary spanning - Individual, Team & Organization. P Dwarkanath- Director MAX India Ltd high

pointed the prerequisites of change which were a winning attitude, strategic communication, and aligning behaviour with strategy.

even seems to stand still. We enjoy being part of a Hot Spot, and we are healthier, happier people as a result.

Arvind Agrawal- President RPG Enterprises discussed the best practices and signature practices of RPG and he told the audience about the differences between them. Best practices are like cut and paste practices but signature practices evolve from a company. Signature practices in long run become best practices.

When Hot Spots arise in and between companies, they provide energy for exploiting and applying knowledge that is already known and genuinely exploring what was previously unknown. As a consequence, Hot Spots are marvelous creators of value for organizations and wonderful, life-enhancing phenomena for each of us.

Shantanu Banerjee from XANSA emphasised the importance of creating a climate of excellence and that there should be a linkage between human performance and financial outcome.

Yet life is not always about being in a Hot Spot, and organizations are not always about generating Hot Spots. How often have you faced a situation when you knew in your heart you could have achieved more? These are times when your energy has drained, when the Big Freeze takes over. There are many times, in many companies, when Hot Spots fail to emerge.

The summit highlight was the session by Lynda Gratton. The focus of her session was to draw attention of the business leaders on creating Hot Spots that are the key to the success of human endeavor within the organization. Elements for Creating Hot Spots….some extracts from Lynda's presentation and book You always know when you are in a Hot Spot. You feel energized and vibrantly alive. Your brain is buzzing with ideas, and the people around you share your joy and excitement. The energy is palpable, bright, shining. These are times when what you and others have always known becomes clearer, when adding value becomes more possible. Times when the ideas and insights from others miraculously combine with your own in a process of synthesis from which spring novelty, new ideas, and innovation. Times when you explore together what previously seemed opaque and distant. We can all remember being in Hot Spots, when working with other people was never more exciting and exhilarating and when you knew deep in your heart that what you were jointly achieving was important and purposeful. On such occasions, time seems to rush by as you and those around you are "in the flow."1 Time

Over 80 percent of the anticipated value from mergers and acquisitions typically fails to materialize. Three out of four joint ventures fall apart after the honeymoon period. Many executives report that they struggle to deliver products to increasing discerning consumers. Hoped-for innovation never materializes as the marketing function fights with the sales function about internal costing issues.3 The Big Freeze also has a human toll. An overly competitive working environment where friendships fail to develop is one of the major sources of stress at work and one of the key reasons why talented employees leave company. These are very different problems with very similar underlying reasons. As you will see, at the heart of successful managers and acquisitions, of well-functioning joint ventures, of the launch of global products and the creation of new products are Hot Spots. These are the occasions when we are willing and able to work skillfully and cooperatively within and across the boundaries of the company, when November

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our energy and excitement are inflamed through an igniting question or a vision of the future, times when positive relationships with work colleagues are a real source of deep satisfaction and a key reason why we decide to stay with a company. Why and when do Hot Spots emerge? What is it about some people that supported the emergence of Hot Spots, and what role did the

leaders of their company play? Why do some Hot Spots flourish while others fail? The answer can be found in the formula for Hot Spots: Hot Spots = (Cooperative Mindset × Boundary Spanning × Igniting Purpose) Productive Capacity

References Lynda Gratton, Hot Spots: Why Some Companies Buzz with Energy and Innovation - and Others Don’t. Financial Times Prentice Hall, 2000.

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BRINGING CHANGE TO THE CHANGE AGENTS A LOOK AT INDIAN NGOs MUSTAFA MOOCHHALA AND TEJINDER SINGH BHOGAL

Introducing Indian NGOs

Mustafa Moochhala finished from XLRI and worked initially with Modi Xerox. He moved to work in Pradan, an NGO, and was based in Madhya Pradesh and then in Chennai. He focuses on HR Consulting, Organization Development and Training. He presently divides his time between Consulting as part of Ma Foi and with NGOs.

Tejinder S. Bhogal has over 22 years experience after graduating from IRMA. His initial thirteen years were of working in NGOs. He has implemented rural development projects in the villages of Gujarat and Chattisgarh. For the last nine years he has worked as a Consultant and Trainer on OD and HR issues with a range of NGOs in the country. He is based in Delhi.

According to various estimates there are anywhere between 1-2 million Non Governmental Organizations (NGOs) in India. About 20 million people work in these NGOs, perhaps 85% as volunteers - the other being paid employees. The World Bank defines NGOs as "private organizations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development". If we were to draw a simple picture of the usual NGO we would say that it is an informal organization, of, say, 20 people, working to improve the lives of the community the NGO is situated in. This organization would work for altruistic (i.e. noncommercial as well as nonpolitical) reasons, working for the simple reason that its members or employees want to improve the quality of living of their community. This article focuses on these organizations. How NGOs Have Become Increasingly Important In the past decade NGOs have become increasingly important. Many of these organizations have done tremendous work in creating new ways of working with November

communities and local technologies. They have been creative and courageous; and have built trust in the communities they serve. As a result they have built credibility for themselves and the sector as a whole which has led to their being accepted as a legitimate and important part of civil society. A large number of government programs are now mandated to be run by NGOs. Multilateral agencies such as the World Bank want the Government to use NGOs; so does the Planning Commission of the Government of India. Consequently, NGOs that have performed find that they are able to attract funding for more work: they work in larger areas, and are expected to employ a larger number of people than before. The Nature of NGOs Work The work of NGOs is distinct. NGOs provide a range of services (both directly and indirectly) to various communities. Unlike customers of business organizations, these communities, however, do not pay for these services. These services, instead, are paid for either by the Government, or by independent donor agencies (both Indian and foreign). Though NGOs do a range of work, a common factor for a large number 2007

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of these NGOs is the fact that they work directly with the community. They talk to communities, understand their needs, and help develop and implement programs that benefit these communities. A couple of decades back a large number of NGOs worked on programs that did not require complex technical or managerial competencies. This, however, is no longer the case. A very large number of the programs being implemented by NGOs now require a reasonable level of technical and managerial competence. Though a large number of NGOs are growing in size, they are still small: most employ about 10-25 people working for them. A typical small NGO with, say 20 people, would have three kinds of personnel: leaders, field workers and support staff. us, there might be 1-2 people in a leadership position, 1-2 persons as the support staff (handling accounts and office jobs) and the balance 16-18 would be field workers. The Challenges Faced by NGOs While there are many challenges that NGOs typically face (Funding uncertainty, governance, relations with the communities, accountability and effectiveness, etc), we focus here on those which are organizational and people related. These are: • External • Scale up - There is a strong pressure on performing NGOs to scale up. This is felt in discussions with their funding partners, the Government and other partners. There is a push to grow more, do more. Funding houses and NGOs themselves seem to be dissatisfied with the current rate of growth and progress. Organic growth is typically slow, so scaling up requires an enormous amount of energy and focus.

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• Energy spent on arranging for Funds - While funding for NGOs has increased overall, it has hardly kept pace with the need and the expansion in the sector. Almost all NGOs seek funds project to project. This has meant that the people in Leadership positions have to spend much of their time in this activity meeting funders, orienting their programs towards their funding partner needs, networking for fund flows etc. This takes away from investing adequate time in their organization capability building, grooming individuals, building sustainable networks (which do not give them funding) etc. • Internal • Skill development of field workers - With leaders spending less time in the field, they spend less time guiding and coaching their field workers. This leads to relatively untrained people interacting with the community. As a result, the quality of work of the NGO starts to suffer. • Load on the support staff - The support staff consisting of people working on accounts, administration etc feel the increasing load and pressure without having the requisite skills to cope. • Need for technical plus managerial abilities - With the increase in the complexity of the programs (see previous section) it is important to have technically trained manpower. However, just acquiring such manpower (say Irrigation Engineers) is not good enough as such personnel need to be oriented and trained extensively to deal with community related issues. This requires investment of time and resources to help them adapt and learn. • Mindset of frugality - In many NGOs history also prevents them from paying new recruits adequately. Most of these NGOs were set up when NGOs heavily valued frugality. Costs

were low, people lived simply and salaries reflected this. Though salaries have increased over time, the fact is that NGO salaries - as well as those of its leadership are a fraction of what one gets offered in other sectors - Government and the Corporate sector. • Attrition - There is large attrition in many NGOs. This attrition is particularly true for those who join in the Middle Line. For one, there are far many more NGOs present now than they were ten years back. Thus, when people are dis-satisfied with the NGO they are working in, they attempt to find another. Secondly, they are attracted to the donor agencies - many of them international. These donors typically offer much larger pay and greater visibility. These donors act as magnets for a large number of people who join the middle management. Donors on their part too are looking for people who have some 'field experience' - i.e., those who have worked with the community. Consequently, many NGOs who have succeeded in acquiring and training such people end up by losing them to donors. Thirdly, the expanding Corporate sector attracts many in the NGO sector, especially those who interact with community on retail services or financial products.

are actually doing the work. In the context of Indian NGOs, these would be the persons working directly with the Community: the so called Field Workers. • At the hierarchical top of the organization is the Strategic Apex - the managers who have the overall responsibility for the organization; the ones who take strategic decisions and provide direction to the organization. In the context of Indian NGOs these usually consist of people who have started the organization: the original Leaders of the organization. • The Middle Line is a chain of managers that implement the decision by supervising subordinates (the Operating Core), and reporting to their supervisors (the Strategic Apex). These are people who make tactical decisions and lead programs. Interestingly - and we will find out why this happens most Indian NGOs have little or nothing in the form of this middle line.

Mintzberg and the Structure of Organizations: A Theoretical Interlude Henry Mintzberg is a Canadian management thinker who is known as someone apart from the mainstream (of management thinking) able to analyze basic assumptions about managerial behavior. In his seminal work, The Structuring of Organizations, this is what he has to say about organizational structure. • Organizations can be seen divided into five parts. • At the base of the organization is the Operating Core. These are the people who

Figure 1 – Visual depiction of Mintzberg’s structure components

• The fourth part of the organization is the Techno-Structure. This part serves to analyze and organize the work. In the context of NGOs these can refer to people who have a technical background in the specific work area (irrigation, health, November

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education). In reality, most NGOs do not have people who can belong to this part.

for small organizations, but as they grow there is substantive pressure to grow both.

• The fifth and last part is the Support Staff: all those who provide indirect support of work. In the context of NGOs this can include Accountants, Drivers, and Office Administrators.

The shortage of enough number of Support Staff means that the NGO is usually delayed in completing its audit, and sending its reports to donors. This in turn delays (and over time, reduces) the availability of funds to these NGOs.

Mintzberg's Structure and Indian NGOs As indicated above, most Indian NGOs operate with just three parts of the organization: the Strategic Apex, the Operating Core and the Support Staff. Mintzberg terms this as the 'Simple structure' where work is done through direct supervision, without a prominent middle line. The major implications of having just three parts to NGOs are as follows: The Strategic Apex is forced to play the role of the Middle Line too. In other words, the Leaders of the organization spend time directly working with the Field Workers: guiding, controlling and training them. In addition they perform roles of fund raiser, net worker, strategist and overall monitor. The lack of Techno-Structure means that the NGO is limited in the kinds of projects it is able to handle; or there is a lot of trial and experimentation. Interestingly, many NGOs try to solve the problem of a missing Techno Structure and a Middle Line by hiring individuals who are both technical, and can play the middle management role. This works

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In a growing India, NGOs need to meet the key challenges. We would like to suggest 2 sets of key interventions needed for this: • Build and strengthen the 'Middle Line' - This is a key area that needs to be constructed right. It can be done in the following way: • Strengthen institutions and organizations that educate, train and groom caders that become the Middle Line - Premier institutions like IRMA that were supposed to focus on NGOs and Cooperatives have not lived up to their promise. Students from there tend to opt for corporate sector jobs. There is a need to encourage many institutions to have programs in NGO management, so that there is a broadening of the channels to get talented people into this sector. Ex: IFMR, Chennai and Banyan Academy of Leadership in Mental Health have tied up for offering an MBA specialization in this. Bringing in a larger number of fresh recruits in the sector will also challenge traditional beliefs held by the sector. This can lead to fresh thinking. • NGOs have a focused program to train young graduates/post graduates - Pradan, a Delhi based NGO working at the village level have had a successful Associateship program, similar to the 'management Trainee ship' running for two decades now. Dhan, a Madurai based NGO, has set up a

Figure 2 - Structure of a typical Indian NGO

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'People Academy' that seeks to foster knowledge and understanding through Diplomas and shorter training programs. Funders and even Indian Corporates need to partner with the larger NGOs to run these programs to build strong cadres for the future. • Exchange programs with Corporates - There is a need to create a program which establishes an exchange between Corporates, NGOs (and the Government later). This would allow, middle managers from both sectors to work on the other side and build a deeper understanding and skills required to work in this ever expanding world. Many corporate organizations seek to know how to work with communities; many NGOs seek to understand how to focus on 'execution' and efficiency. This program would go a considerable way in doing that. This should be a program of mutuality, rather than a oneway exchange. Over a period of time, we should have enough leaders in Corporates and NGOs who have had experience in working in the 'other' sector, so that collaboration is seen as natural rather than as a special activity presently put down under 'Corporate Social Responsibility'. • Build different models for collaboration in setting up stronger Support and Technical services - This can be done in the following way: •

Shared services houses - Build organizations which offer services to many NGOs. This would be in the nature of shared services, and perhaps even outsourced services. Accounting firms, HR firms, Recruitment agencies and Administration firms need to be encouraged to enter this space and offer services to NGOs. This would lower

cost for the latter and ensure access to professional services. ICICI Foundation along with Murray Culshaw Consulting is doing some work towards this. There needs to a network of organizations that offer different support services to NGOs leaving them free to focus on their key strengths, ie. Working with the communities. • Collaboration on technical services - India is rich in its technical services. Some NGOs have tied up with these institutions to collaborate in specific areas (ex: Rural Innovations Network collaborates with IIT, Chennai in a program - L-ramp to make innovations made in rural India robust technically). These have been sporadic and short term. There is a need to grow this and establish strong linkages which would allow the key parts of the techno-structure to be outsourced to these institutions. Putting in some of these interventions is likely to strengthen the Middle Line, who would take on tasks of guiding, monitoring, coaching the Operating Core. This group of leaders/ managers would head units, build tactics for their immediate community actions, experiment at the field level; thus freeing Leadership time at the Strategic Apex to focus on networking, raising of Funds, Strategy formation and building of this Middle cader. As seen in examples, some forward looking NGOs have worked very thoughtfully and in a deliberate manner over time to create suitable solutions to some of the issues faced by them. These need to be picked up by other NGOs, adapted and expanded for their own use, if growth and scale are important to them.

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In Conclusion It is time that the sector as a whole (and not just individual NGOs) looked at issues of organization and people. The Civil Society, Corporate organizations and the Government

need to consciously devise strategies to support this movement, which is likely to make the NGO sector vibrant and sustainable.

Endnotes 1. Quoted in Indianngos.com in http://www.indianngos.com/ngosection/newcomers/whatisanngo.htm downloaded on October 23, 2007. 2. PRIA, Invisible but Widespread: The Non-Profit Sector in India. 3. NGOs can be more complex; they can also be situated far from the community. But this picture given here represents a large majority of the present day ‘secular’ NGOs. 4. It is important to point out that many NGOs do not work directly with communities: the nature of their work is thus subtly different from those who have been described as a typical modern day Indian NGO. A separate article is required to deal with the change issues of such NGOs. 5. Programs include that of Education, Health, Legal Aid, Awareness of Rights, and programs that help to improve the income of poor communities. 6. In particular the Gandhian ones. 7. This has come about as NGOs are beginning to implement technically complex programs such as on Health Prevention, Providing Quality Education, designing and constructing watershed and irrigation programs etc. 8. http:// www2.winchester.ac.uk/bm/courses/bs3933/Mintzberg.doc. Also look up http://www.henrymintzberg.org/. Read Mintzberg, 1979 9. Pearson, 2007. 10. http://pradan.net/ 11. http://www.dhan.org/ 12. http://news.moneycontrol.com/mccode/news/article/news_article.php?autono=310198. See also http://www.icicicommunities.org/ interaction.html 13. http://www.indianngos.com/governence/murrayculshaw/fullinterview.htm 14. http://www.rinovations.org/Services

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DEFINING CHANGE AGENTS SANDEEP K. KRISHNAN Abstract

This article tries to define a change agent. Drawing extensively from the literature the paper tries to examine who a change agent is, what a change agent does, what makes a change agent, and how we can groom change agents. The interesting aspect here would be the link up of the change process models with the change agent and finally how an organization can enable change agents.

Introduction

Sandeep K. Krishnan is a Fellow of the Indian Institute of Management, Ahmedabad. He currently works with the RPG - Group Human Resources. He has presented papers on employee intention to quit in forums like the Academy of Management, USA. He has published several papers and is passionate about his work in the area of talent management.

Organizations are facing tremendous internal and external pressures to change. With this being the trend, being a change agent has become a universal competency for most of professionals. This, on one side, opens up tremendous opportunities for individuals to apply their knowledge and skills for the betterment of the organizations but also exposes the individual to be either becoming open to change or becoming the change agent. However, the change agent has a challenging role with respect to not just being an active partner adapting to change but initiating, driving, and institutionalizing change. This is in line with the Kurt Lewin's three stage process of change where there is unfreezing of the current state, implementing change, and institutionalizing new systems (refreezing) (French and Bell, 2003). Who is a Change Agent? Cohen (2006), drawing up the high linkage of the change process and the change agent states four important aspects of being a change agent. This includes initiating/ leading a project that changes the November

way in which things are done, define how the change should be, understands the reality of the change, is able to take up the resources for the change, and stick on to the agreed change process and face challenge on course. This description of what a change agent needs multiple skills. Linking up Cohen's definition of change agent and Kurt Lewin's model of change, we can see that a change agent is a person who unfreezes the current situations, who introduces the change in terms of new practices, and finally ensures that new world is established and runs efficiently. What a Change Agent Does In each of the stages i.e unfreezing, moving, and refreezing a change agent should be specific activities that enable the change. In the unfreezing stage, the action is to develop a need for change and point out why things should change from the way in which things are done around. Here we are also assuming that we are speaking of internal change agents rather than external OD consultants or management consultants and hence the complexity is more pronounced and interesting. Based on Caldwell 2007

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(2003) model of managers as change agents, one of the major reasons that a change might be initiated would be a change in the strategic vision provided by leadership that drives managers for implementing the same. Other such reasons could be the changes that a manager himself initiates through his empowerment for decision making with the need for efficiency, changing market demands, internal issues, etc. In the case of a planned change the objectives are very strongly defined and driven. For example quoting the case of Siemens Nixdorf as in Dover (2002) the culture change was driven for enhancing performance through better customer care and operational efficiency. Similar example in case of RPG, one of the India's largest conglomerates, would be the case of KEC. KEC underwent a major change in terms of culture to meet project management and client needs. The change agents here were primarily the top management team and driven from the vision of the leader. Caldwell (2003), quoting Beckhard (1969) notes that the typical role of a change agent in a planned effort is to provide consultative, technical or specialist advice in the management of change. Thus it is taken as granted that a change agent in most of the cases is driving the already agreed path of change. However, when change process when linked with leadership creates a whole new dimension to what a change agent does. It is this change agent leader who creates an inspiring vision, motivates people to walk with him, inspire confidence and then creates systems and processes for change. A broader role of a change agent can thus be defined as someone who identifies a need for change, envisages a better future based on the change, inspires people to walk with the change, and finally makes change a way of life.

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A Change Agent Model

The model given above is simplistic in terms of the role of a change agent. Fullan, Cuttress, and Kilcher (2005) give an interesting description that helps us to connect to the various processes behind it. Author points out eight steps/roles that can be connected to the model. The initiating change involves engaging moral purpose, and building capacity. This clearly involves the crux of beginning of selling the change to various stakeholders. The second step would ensure that you have the processes, people, and resources that will help in making change happen. The third step would understand the change process. This is a critical part in making things happen. The clarity on how change should be and creating ownership of different parts of it is what makes the change a reality. Fourth would be creating a learning culture. Change creates new situations and critical part here would be to ensure that learning and institutionalizing them are part of life. Fifth is to put evaluation of the change process in place. Unless clarity is there on where we stand on different aspects of the change, it is unlikely that we will get the needed results. Sixth is the factor that cuts across all the process - leadership. What makes a change agent is critical here. This enables whatever other steps are brought forward in the change process. Seventh would be making the change an integral part of the entire system. An interesting example from the RPG Group would be the implementation of Balanced Scorecard a few years back. Balanced business scorecard now links up the entire process of strategy formulation, strategy to performance measures, performance evaluation, and associated

human resource process like leadership development, employee feedback and development. Any change that is implemented without this aspect in place may have a high chance of dying out in the due process. Challenge of the change agent(s) here would be create collaboration, involvement, and buyin from as many critical stakeholders as possible in enabling success. The final step that would be crux of institutionalizing change would be to understand the transformational outcomes of change.

participate in the change process. Interestingly study by Grimm and Smith (2001) have found that young managers who have less experience are more participative and take initiative in the change process. This study was also of considerable interest because it could link a positive impact of people with MBA degree to organizational change. It was postulated that younger managers were more likely to have an MBA degree and they were more ready and inclined towards change that are strategic in nature.

What Makes a Change Agent?

As Cohen (2006) puts it together, some of the basic characteristics of change agents are courage to make the change, flexibility to adapt as the change, ability to welcome resistance, respectful treatment of staff, willingness to learn, humor as you go through change, humility to accept when things are not going well, and critical thinking to recognize when things are not working. Rosabeth Moss Kanter, a well-known change expert puts an interest perspective to one of the most relevant action of a leader as a change agent. It is always easy to ride on a success and when everything is positive. However, the striking challenge is when it is a losing streak. The critical job of a change agent here would be to restore accountability in the process of change, and bring in teamwork and collaboration to the new initiatives (Moss Kanter, 2005). Interestingly what makes a change agent can be quoted from Furnham (2002) as "the courage to fail is the courage to be first, to try something new, to be ahead of your time, to trust your instincts, to be creative - knowing it could all go very wrong with very significant consequences for the manager and who they manage."

It is widely quoted in literature that certain skills and personality traits make a person a change agent. Driving change is a difficult socio political process than a pure rational one. Some of the basic characteristics that are mentioned in the literature are the courage, patience, ability to motivate, adapting to change, ability to neutralize resistance, and ability to come back from setbacks. Furnhan (2002) states that to be part of the change process the manager should have the courage to fail. They should also use this to deliver bad news and confronting people who are poor performers. Also in case of a change there are chances of chaos and the author puts it rightly that the managers should have the moral courage to confront ethical dilemmas. The critical element here would be the ability and the skill to take people along. That is to encourage people who support change and ensure that others are given the right inputs to be motivated to be part of change. Santos and Garcia (2006) have found another interesting aspect on how managers become part of organizational change. They found that mental models with which managers operate can determine how they pursue organizational change. An understanding of the real time events and whether they can create organizational change make the manager

How Can We Groom Change Agents? As discussed in earlier sections, a change agent should basically have the understanding of the context, ability to motivate and lead, have the competence to adapt and respond to change November

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and cope up with pressure and setback. Hence, some of them come up with experience of "knowing the organization" and some comes from "knowing what is best" and rest comes from the ability to know both and use it to bring the best in terms of the change. The various characteristics of change agents come from different dispositions. Some are personality characteristics. While equating change agents with leaders, we look at some of the basic personality characteristics like charisma. Research as a whole, has defied most of these aspects that we attribute to leaders and as such to change agents. Colin (2001) for example has found that exceptional leaders are the ones who are high on humility and put themselves as the background runners to make long-term impact. As one of the critical aspect of change agent is to have the courage of failure it is ironical that we expect people who have narcissist tendencies or want to rely on their charisma more than anything else can bring out transformations. It thus depends on the organizations to build on evidences of change to give responsibilities to groom future leaders and change agents rather than going by perceptions. Training interventions that are carefully chosen to develop competencies that are identified to be critical for change management can be effectively done. Outbound training that focuses on altering mental blocks on change can be used effectively for creating an atmosphere for change. However, it has been reported by experts that outbound as a mechanism can do very less on the organizational context but it can be effectively used to make the individual a better person. The second aspect would be coaching. Coaching on specific characteristics based on role model change agents can be effective. Hand holding and creating confidence and courage can go a long way in making a mindset of change. However, a critical organizational context that can aid any change agent and change process

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as Argyris (1997) is based on two critical factors - first is to make previously un discussable problems discussable. This enables unearthing of critical issues and making change possible. A change agent should ensure that people are put at non-threatening stance to make this happen. Second critical factor would be enabling learning and information sharing in the best possible way. In the context of every day working in the organization, change agents can be nurtured only if we have tolerance to failure and experimentation is allowed. This requires a culture of allowing taking risks and empowerment. Quite certainly this boils down to how managers empower their employees and support mechanisms are provided for making the change. Conclusion This paper attempted to bring across what is the role of a change agent, what makes a change agent, and how we can groom a change agent. A change agent model is an inspirational one. However, one can be a change agent only if he/she has the necessary competencies that are essentially strategic to complement traits like courage and confidence. As John Kotter states "Leaders establish the vision for the future and set the strategy for getting there; they cause change1. They motivate and inspire others to go in the right direction and they, along with everyone else, sacrifice to get there." This is no different for a change agent who takes the leadership of the situation on him/herself and rides towards the goal. It is the ability of the organization to set up a culture that supports/ tolerates change that is the biggest enabler of a change agent.

References Chris Argyris, Initiating change that perseveres”, The American behavioral scientist, 40 (1997) Shelly Cohen, “Change agents bolster new practices in the workplace”, Nursing Management, 16 (June 2006) Raymond Caldwell, “Models of change agency: a fourfold classification”, British Journal of Management, 14 (2003) Philip A Dover, “Change agents at work: Lesson from Siemens Nixdorf”, Journal of Change Management, 3 (2003) Adrian Furnham, “Managers as change agents”, Journal of Change Management, 3 (2002) Michael Fullan, Claudia Cuttress, and Ann Kilcher, “8 Forces for leaders of change”, Journal of Staff Development, 26 (Fall 2005) MA Valle Santos, and MA Teresa Garcia, “Organizational Change: Role of Managers’ Mental Models”, Journal of Change Management, 6 (2006). Curtis M. Grimm, and Ken G. Smith, “Management and organizational change: A note on the rail road industry”, Strategic Management Journal, 12 (Oct 1991) Rosabeth Moss Kanter, “How Leaders Gain and Lose Confidence”, Leader to Leader, 35 (2005) Wendell L. French, and Cecil H. Bell Jr, Organization Development, Prentice Hall of India (2003) November

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IN PRAISE OF INDIA'S MOST SEASONED CHANGE MANAGERS GANESH CHELLA

Ganesh Chella is a product of XLRI and has over 16 years of industry experience in leading Indian and multinational companies including Cadburys, TVS, Citibank and RPG and over seven years of consulting experience. Deeply committed to the development of the Human Resources profession, Ganesh teaches, writes and engages in research. His current consulting practice provides him with immense opportunity to make significant contribution to the profession and to his client organizations. It also provides him with the opportunity to learn, experiment and grow as a professional. He is the founder & CEO of totus consulting and the co-founder of the Executive & Business Coaching foundation India Limited. Totus is a strategic HR consulting firm that partners with organizations across industries to design and implement Human Resource and organization Development solutions that meet their unique business needs.

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Arul has just closed the call. He looks at his watch and realizes that it is 9.30 pm and there is a lot more in store for him in the evening. He has to send out a couple of mails, debrief his manager about this call and also find time for small things like and asking his little daughter how she fared in her first quarterly exams in the new school. These are 'however' not the things that are going to keep him awake that night. Not his daughter's disappointment, not the significant changes in the client's specifications. He was to have convinced the client to release two of his more senior resources from the project to help staff other needs and more importantly to conform to the new staffing mix norms established by the organization in the interest of project profitability. This did not happen since the client turned down the request. He will now need to try again. Being a seasoned Project manager in this large software services company, Arul has seen it all. He has now evolved a very effective coping strategy - he just does not think about the big picture and worry himself about all the future changes and accompanying challenges. He takes one ball at a time and manages to field it well. Welcome to the everyday life of a project manager in a software company. If you thought the best change managers in India are OD 2007

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consultants with business and behavioral credentials and the ability to deploy multiple tools, technologies and techniques you are quite off the mark. The most seasoned change managers are actually the hundreds of project managers who work round the clock to deliver value and keep the engines of growth alive. This article is meant to recognize their efforts in making change management an integral part of the way they live their lives. This special issue on Change Management would in many ways be incomplete if we did not recognize and honor their efforts on the ground. Obviously, it is not that they know it all and do it the best way but they certainly "DO IT!" In writing this article I have relied on my insights gained from interactions and discussions with hundreds of project managers and other leaders in the IT services Organizations I have had to opportunity to work with across several OD and HR consulting engagements. IT is all about change Every mature profession in the world helps its aspiring members to imbibe and demonstrate the key behavioral requirements of the profession even before they commence work. Some call this presocialization. For example, no one

needs to tell a trained nurse about the importance of good bed side manners. No one ever needs to tell a trained hospitality professional about the need for demonstrating courtesy with guests. No one needs to tell a counselor about the importance of empathy. All of them have been pre-socialized to the key behavioral demands of their roles.

and some of strategic objectives of this model include workforce development, reduction of individual dependencies, people motivation and retention.

No one needs to tell a project manager that change is a part of his job. He understood this even before he starts his career in the industry.

So, what really are the dimensions of change in a project manager's life? What does he do well and what is he struggling with? What are the competencies he could get better at? These are some of the questions we will address in this article.

In reality however, despite the best of processes, much seems to depend on the abilities of the project manager who seems to play a pivotal role in managing all this change.

The Seven Dimensions of Change

Diagram 1: Drawn by Varsha.

He knows that the IT industry is synonymous with change. He learns that everything about the industry, its business model, its technology, its processes, its products and its people keeps changing and evolving constantly. In fact the Software Engineering Institutes now universally acclaimed CMM model specifies five levels of maturity of the processes of a software organization. CMM offers a framework for evolutionary process improvement. Originally applied to software development (SE-CMM), it has been expanded to cover other areas including Human Resources (P-CMM) and Software Acquisition. Level 5 of this model is all about Optimising Continuous Improvement - Process Change Management, Technology Change Management and Defect Prevention. In fact the evolution of P- CMM a is recognition of the critical role of people in securing quality

In my assessment, an average project manager has to contend with seven critical dimensions of change in his every day work. These dimensions are obviously of varying levels of complexity and ease of management as depicted in the diagram. I have therefore classified these dimensions into three levels of complexity.

Diagram 2: Ganesh Chella model of Seven Dimensions of Change

Level One Change Management Challenges • Client Requirements Most project managers seem extremely proficient in accepting this element of change. November

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They realize that clients may not be clear about what they want or may not articulate it clearly and that they may also change their minds at any time. This seems to be a non issue today. • Technology Project managers of today have seen several technological transitions. They have been part of transitioning their clients from one platform to another. They have also understood the impact of technological changes on team preferences, employee costs and availability. This too seems a non issue. I am therefore not dwelling much on these level one dimensions. Level Two Change Management Challenges • Client Environment

on their particular project. • Team One of the biggest challenges for a project manager is the transience in his team membership and relationship. I call it transience because it is now beyond change. It is a continuous onslaught of a series of everyday changes in his team, many of which he is unable to understand, appreciate and even manage. This constant state of transience is a great source of stress for any project manager. First, there is a fair amount of attrition that changes his team composition and terminates the team life ever so often. Second, is the pressure to release trained people and induct fresh people to keep the costs low, calling for constant efforts in training, socialization and team building efforts.

Many clients keep undergoing radical changes in many ways - the sponsors of the engagement might change, there could be structural realignments, there could be an M&A or even worse, the company could lose the client on account of a variety of problems. While these aspects are typically handled at a level higher than the project manager, the PM is ultimately responsible for managing its impact on the team in terms of communication and morale.

I am still placing this in the second level because managers seem to be learning quickly to manage this dimension and many will no longer complain about this being an impossible task.

It is in this area that the good project managers begin to get separated from the great ones.

Most importantly, they are able to use their relationships to get some heads up about what is on their team members' mind, when they plan to ask for a change or leave and when they need to start taking actions.

The great ones are able to predict and sense these developments and assess their potential impact on the project and even the relationship. They are also able to share these insights within the organization at appropriate levels. They are also able to come up with contingency plans. They may even alert their team members and do what they can to mitigate risks. The average ones may not do enough connect across multiple levels in the client organization and may therefore not be able to acquire these insights despite doing a good job of delivering

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The great managers tend to be better at building trust and relationships ever so quickly within the team. They also build informal networks within the organization and are less reliant on HR and more reliant on these networks to find the people they want and staff their teams quickly.

The average ones end up feeling helpless and constrained and blame the system and the younger generation for all the chaos they have to deal with. Level Three Change Management Challenges • Organization Changes The organization constantly keeps making changes to its policies and processes in

response to changes in the external environment as well as client needs and internal pressures. These include changes in hiring policies, the structure of the hiring function, the resource allocation system, pay policies, campus hiring policies, release policies, staffing mix policies, career development policies, reward policies, on-site assignment policies, training policies, and a whole host of other workforce management policies right down to things like dress code! At another level, organizations themselves go through structural changes, ownership changes and strategic changes. While it is all fine to make out a policy communication or announcement, the onus for explaining it, selling it and making it work rests with the project manager. Depending on the depth of the HR function and the organization's culture this is either shared by HR or is often placed solely on the shoulders of the project managers. Given their own inability to understand the big picture and the lack of training and preparation, many do a bad job of managing this. Some rationalize by taking the view that their life ends with the project and anything beyond that is not their problem. Some others believe that it is "management's" job to handle the change. Most seem themselves as victims of the system. This is where the maturity of organizational processes makes a huge difference. Where organizations are sensitive to the implications of the change, they limit the burden on the project manager and lead the change from the front. Weak Organizations just dump it on the PM. • External Environment Given the truly global character of the IT industry anything that happens anywhere in the world can have a huge impact on the business. This is the vulnerability with which firms operate.

The September 11 attack, the rupee appreciation, the visa restrictions, the antioutsourcing protests, the spirally wage costs and so on can all impact the industry. These and other environmental changes almost always have implications on costs and margins, risks, business continuity and so on. The final hard actions always rest with the project manager for implementation. While most project managers are generally well informed about these developments thanks to an over-active media, few are able to appreciate its direct impact on their work or what they need to do to manage it. • Competency Expectations The competencies expected of project managers have gone up significantly over the years. His job is today much more complex than it was in the early days. From being back-end coordinators they are now expected to understand the client's business and add value at a much higher and deeper level. They have to contend with much larger spans of control, far larger number of inexperienced team members and take a far greater responsibility for the profitability of their projects and for retaining and growing the account. Are project managers aware of these changing expectations and are they doing enough to equip themselves to respond to these changes? Well, I must say the situation is far from satisfactory. While many Organizations are constantly investing in the retooling and development of project managers, the problem is with the project managers' ability to wake up and smell the coffee. Many do not wake up to the need for re-skilling themselves early enough till they realize that they are not meeting the demands of the new order. The Competencies to Manage Change What then are the competencies of a project manager who is capable of managing change November

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well? In other words, what separates the great project managers who are adept at managing change from the rest?

able to create excitement and comfort around the change with the team.

• Dual Focus (bird's eye and worm's eye view at the same time)

Managers with a positive image of the future and a high sense of optimism seem to be better at embracing change compared to those who are always skeptical and are easy to point out all the potential problems with the future.

Project managers seem to be very good at seeing what is front of them but quite often poor at seeing what is ahead. While their worm's eye view is great, their bird's eye view is not. While many believe that it is this blinkered vision that keeps them focused and helps them deliver every day, this blinkered vision also inhibits their ability to predict, develop insights, synthesize and see the big picture. • Learning Propensity A lot of resistance to change emanates from fears about its consequences and about one's belief that one will not be comfortable with the changed situation. Those with a greater propensity to learn tend to have greater comfort around change. Don't your kids know more about your mobile phone than you do? • Rallying the Troops The buck stops with the Project manager. He or she is responsible for converting the visions and strategies into tangible actions and instructions for the troops. He also needs to be

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• Positive Image of the Future

To a large extent this positive image of the future also emanates from a positive image one has of oneself, one's abilities and potential. In closing Despite all the focus on process, it is the Aruls of the IT world who finally make the difference. They are the new generation of seasoned change managers with a basic level of comfort around change and that is good news. The Aruls can become great if the organization does its bit in terms of development, communication and support. In the days to come project managers are likely to be subjected to increasing pressures and changes. Organizations that nurture these managers will not only succeed but also help the likes of Arul get a good night's sleep and that is extremely important!

THE ENDURING SKILLS OF CHANGE LEADERS ROSABETH MOSS KANTER

Rosabeth Moss Kanter holds the Ernest L. Arbuckle Professorship at Harvard Business School, where she specializes in strategy, innovation, and leadership for change. Her strategic and practical insights have guided leaders of large and small organizations worldwide for over 25 years, through teaching, writing, and direct consultation to major corporations and governments. The former Editor of Harvard Business Review (1989-1992), Professor Kanter has been named to lists of the "50 most powerful women in the world" (Times of London), and the "50 most influential business thinkers in the world" (Accenture and Thinkers 50 research). In 2001, she received the Academy of Management's Distinguished Career Award for her scholarly contributions to management knowledge, and in 2002 was named "Intelligent Community Visionary of the Year" by the World Teleport Association. Professor Kanter is the author or co-author of 17 books, which have been translated into 17 languages. Her latest book, America the Principled: 6 Opportunities for Becoming a Can-Do Nation Once Again (published on October 23, 2007), offers a positive agenda for the nation, focused on innovation and education, a new workplace social contract, values-based corporate conduct, competent government, positive international relations through citizen diplomacy and business networks, and national and community service. Her previous book, Confidence: How Winning Streaks & Losing Streaks Begin & End (a New York Times business and #1 Business Week bestseller), describes the culture and dynamics of high-performance organizations as compared with those in decline, and shows how to lead turnarounds, whether in businesses, hospitals, schools, sports teams, community organizations, or countries. Her classic

prizewinning book, Men & Women of the Corporation (C. Wright Mills award winner for the year's best book on social issues) offered insight to countless individuals and organizations about corporate careers and the individual and organizational factors that promote success; a spin-off video, A Tale of 'Of On Being Different, is among the world's most widely-used diversity tools; and a related book, Work & Family in the United States, set a policy agenda (in 2001, a coalition of university centers created the Rosabeth Moss Kanter Award in her honor for the best research on work/family issues). Another award-winning book, When Giants Learn to Dance, showed how to master the new terms of competition at the dawn of the global information age. World Class: Thriving Locally in the Global Economy identified the rise of new business networks and analyzed the benefits and tensions of globalization. She has received 22 honorary doctoral degrees, as well as numerous leadership awards and prizes for her books and articles; for example, her book The Change Masters was named one of the most influential business books of the 20th century (Financial Times). Through Good measure Inc., the consulting group she co-founded, she has partnered with IBM to bring her leadership tools, originally developed for businesses, to public education as part of IBM's award-winning Reinventing Education initiative and she is a Senior Advisor for IBM's Global Citizenship portfolio.. She advises CEO s of large and small companies, has served on numerous business and non-profit boards and national or regional commissions, and speaks widely, often sharing the platform with Presidents, Prime Ministers, and CEO s at national and international events, such as the World Economic Forum in Davos, Switzerland. Before joining the Harvard Business School faculty, she held tenured professorships at Yale University and Brandeis University and was a Fellow at Harvard Law School, simultaneously holding a Guggenheim Fellowship. She chairs a Harvard University group creating an innovative initiative on advanced leadership, to help successful leaders at the top of their professions apply their skills not only to managing their own enterprises but also to addressing challenging national and global problems.

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Hundreds of books and millions of dollars in consulting fees have been devoted to leadership and organizational change. No issue of the past 15 years has concerned more managers or a wider spectrum of organizations. Yet, for all the attention the subject merits, we see every day that certain kinds of change are simple. If you're a senior executive, you can order budget reductions, buy or sell a division, form a strategic alliance or arrange a merger. Such bold strokes do produce fast change, but they do not necessarily build the long-term capabilities of the organization. Indeed, these leadership actions often are defensive, the result of a flawed strategy or a failure to adapt to changing market conditions. They sometimes mask the need for a deeper change in strategy, structure, or operations, and they contribute to the anxiety that accompanies sudden change. Years of study and experience show that the things that sustain change are not bold strokes but long marches -- the independent, discretionary, and ongoing efforts of people throughout the organization. Real change requires people to adjust their behavior, and that behavior is often beyond the control of top management. Yes, as a senior executive, you can allocate resources for new product development or reorganize a unit, but you cannot order people to use their imaginations or to work collaboratively. That's why, in difficult situations, leaders who have neglected the long march often fall back on the bold stroke. It feels good (at least to the boss) to shake things up, but it exacts a toll on the organization. Forces for Change Organizational change has become a way of life as a result of three forces: globalization, information technology, and industry

consolidation. In today's world, all organizations, from the Fortune 500 to the local nonprofit agency, need greater reach. They need to be in more places, to be more aware of regional and cultural differences, and to integrate into coherent strategies the work occurring in different markets and communities. The first two forces for change -- globalization and technology -- will inevitably grow. But it's not enough for organizations to simply "go international" or "get networked." In a global, high-tech world, organizations need to be more fluid, inclusive, and responsive. They need to manage complex information flows, grasp new ideas quickly, and spread those ideas throughout the enterprise. What counts is not whether everybody uses e-mail but whether people quickly absorb the impact of information and respond to opportunity. Industry consolidation, the business story of 1998-99, has a less certain future. But even if that trend abates, the impact of mergers, acquisitions, and strategic alliances will be felt for years. Mergers and acquisitions bring both dangers and benefits to organizations (see "Innovating in the Age of Mega mergers"). Partnerships, joint ventures, and strategic alliances can be a less dramatic but more highly evolved vehicle for innovation. However, you must not starve an alliance or a partnership. You have to invest the time and resources to work out differences in culture, strategy, processes, or policies. You also have to bring together people at many levels to talk about shared goals and the future of the alliance in general, not just their small functional tasks. Many alliances unravel because, while there is support at the top of the organization, departments at lower levels are

c) 2007 by Professor Rosabeth Moss Kanter, Harvard Business School, Boston, Massachusetts, USA. Used by permission of the author; not to be reprinted without express permission.

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left to resolve tensions, answer questions, or fill gaps on their own. The conflicts and wasted efforts that result can end up destroying value instead of creating it. You have to make sure that the goals of people at many levels of the organizations are aligned, and that people get to know each other, before you can expect them to build trust. Keys to Mastering Change Change is created constantly and at many levels in an organization. There is the occasional earthshaking event, often induced by outside forces; there are also the everyday actions of people engaged in their work. In change-adept organizations, people simply respond to customers and move on to the next project or opportunity. They do not necessarily change their assumptions about how the organization operates, but they continuously learn and adapt, spread knowledge, share ideas. By making change a way of life people are, in the best sense, "just doing their jobs." Change -- adept organizations share three key attributes, each associated with a particular role for leaders. • The imagination to innovate. To encourage innovation, effective leaders help develop new concepts -- the ideas, models, and applications of technology that set an organization apart. • The professionalism to perform. Leaders provide personal and organizational competence, supported by workforce training and development, to execute flawlessly and deliver value to ever more demanding customers. • The openness to collaborate. Leaders make connections with partners who can extend the organization's reach, enhance its offerings, or energize its practices. These intangible assets -- concepts, competence, and connections -- accrue

naturally to successful organizations, just as they do to successful individuals. They reflect habits, not programs -- personal skills, behavior, and relationships. When they are deeply engrained in an organization, change is so natural that resistance is usually low. But lacking these organizational assets, leaders tend to react to change defensively and ineffectively. Change compelled by crisis is usually seen as a threat, not an opportunity. Mastering deep change -- being first with the best service, anticipating and then meeting new customer requirements, applying new technology -- requires organizations to do more than adapt to changes already in progress. It requires them to be fast, agile, intuitive, and innovative. Strengthening relationships with customers in the midst of market upheaval can help organizations avoid cataclysmic change -the kind that costs jobs and jolts communities. To do that, effective leaders re conceive their role -- from monitors of the organization to monitors of external reality. They become idea scouts, attentive to early signs of discontinuity, disruption, threat, or opportunity in the marketplace and the community. And they create channels for senior managers, salespeople, service reps, or receptionists to share what customers are saying about products. Classic Skills for Leaders The most important things a leader can bring to a changing organization are passion, conviction, and confidence in others. Too often executives announce a plan, launch a task force, and then simply hope that people find the answers -- instead of offering a dream, stretching their horizons, and encouraging people to do the same. That is why we say, "leaders go first." However, given that passion, conviction, and confidence, leaders can use several techniques to take charge of change rather than simply react to it. In nearly 20 years working with leaders I have found the following classic skills November

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to be equally useful to CEO s, senior executives, or middle managers who want to move an idea forward. 1. Tuning in to the Environment. As a leader you can't possibly know enough, or be in enough places, to understand everything happening inside -- and more importantly outside -- your organization. But you can actively collect information that suggests new approaches. You can create a network of listening posts -- a satellite office, a joint venture, a community service. Rubber maid operates its own stores, for instance, even though it sells mostly to Wal-Mart and other big chains. These stores allow the company to listen to and learn from customers. Likewise, partnerships and alliances not only help you accomplish particular tasks; they also provide knowledge about things happening in the world that you wouldn't see otherwise. Look not just at how the pieces of your business model fit together but for what doesn't fit. For instance, pay special attention to customer complaints, which are often your best source of information about an operational weakness or unmet need. Also search out broader signs of change -- a competitor doing something differently or a customer using your product or service in unexpected ways. 2. Challenging the Prevailing Organizational Wisdom. Leaders need to develop what I call kaleidoscope thinking - a way of constructing patterns from the fragments of data available, and then manipulating them to form different patterns. They must question their assumptions about how pieces of the organization, the marketplace, or the community fit together. Change leaders remember that there are many solutions to a problem and that by looking through a different lens somebody is going to invent,

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for instance, a new way to deliver health care. There are lots of ways to promote kaleidoscopic thinking. Send people outside the company -- not just on field trips, but "far afield trips." Go outside your industry and return with fresh ideas. Rotate job assignments and create interdisciplinary project teams to give people fresh ideas and opportunities to test their assumptions. For instance, one innovative department of a U.S. oil company regularly invites people from many different departments to attend large brainstorming sessions. These allow interested outsiders to ask questions, make suggestions, and trigger new ideas. 3. Communicating a Compelling Aspiration. You cannot sell change, or anything else, without genuine conviction, because there are so many sources of resistance to overcome: "We've never done it before; we tried it before and it didn't work." "Things are OK now, so why should we change?" Especially when you are pursuing a true innovation as opposed to responding to a crisis, you've got to make a compelling case. Leaders talk about communicating a vision as an instrument of change, but I prefer the notion of communicating an aspiration. It's not just a picture of what could be; it is an appeal to our better selves, a call to become something more. It reminds us that the future does not just descend like a stage set; we construct the future from our own history, desires, and decisions. 4. Building Coalitions. Change leaders need the involvement of people who have the resources, the knowledge, and the political clout to make things happen. You want the opinion shapers, the experts in the field, the values leaders. That sounds obvious, but coalition building is probably the most

neglected step in the change process. In the early stages of planning change, leaders must identify key supporters and sell their dream with the same passion and deliberation as the entrepreneur. You may have to reach deep into, across, and outside the organization to find key influencers, but you first must be willing to reveal an idea or proposal before it's ready. Secrecy denies you the opportunity to get feedback, and when things are sprung on people with no warning, the easiest answer is always no. Coalition building requires an understanding of the politics of change, and in any organization those politics are formidable. When building coalitions, however, it's a mistake to try to recruit everybody at once. Think of innovation as a venture. You want the minimum number of investors necessary to launch a new venture, and to champion it when you need help later. 5. Transferring Ownership to a Working Team. Once a coalition is in place, you can enlist others in implementation. You must remain involved -- the leader's job is to support the team, provide coaching and resources, and patrol the boundaries within which the team can freely operate. But you cannot simply ask managers to execute a fully formed change agenda; you might instead develop a broad outline, informed by your environmental scan and lots of good questions, from which people can conduct a series of small experiments. That approach not only confers team ownership, but allows people to explore new possibilities in ways that don't bet the company or your budget. As psychologist Richard Hackman has found, it is not just the personalities or the team process that determine success; it's whether or not the team is linked

appropriately to the resources they need in the organization (see "Why Teams Don't Work," Winter 1998). In addition, leaders can allow teams to forge their own identity, build a sense of membership, and enjoy the protection they need to implement changes. One of the temptations leaders must resist is to simply pile responsibility on team members. While it is fashionable to have people wear many hats, people must be given the responsibility -- and the time -- to focus on the tasks of change. 6. Learning to Persevere. My personal law of management, if not of life, is that everything can look like a failure in the middle. One of the mistakes leaders make in change processes is to launch them and leave them. There are many ways a change initiative can get derailed (see "Sticky Moments in the Middle of Change"). But stop it too soon and, by definition it will be a failure; stay with it through its initial hurdles and good things may happen. Of course, if a change process takes long enough you have to return to the beginning -- monitor the environment again, recheck your assumptions, reconsider whether the proposed change is still the right one. Abdicating your role undermines the effort because, unlike bold strokes, long marches need ongoing leadership. Most people get excited about things in the beginning, and everybody loves endings, especially happy endings. It's the hard work in between that demands the attention and effort of savvy leaders. 7. Making Everyone a Hero. Remembering to recognize, reward, and celebrate accomplishments is a critical leadership skill. And it is probably the most underutilized motivational tool in organizations. There is no limit to how much recognition you can provide, and it is often free. Recognition brings the change cycle to November

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its logical conclusion, but it also motivates people to attempt change again. So many people get involved in and contribute to changing the way an organization does things that it's important to share the credit. Change is an ongoing issue, and you can't afford to lose the talents, skills, or energies of those who can help make it happen. Today's organizations have come to expect bold strokes from their leaders. Sometimes these are appropriate and effective -- as when a project or product that no longer works is put to rest. But bold strokes can also disrupt and distract organizations. They often happen too quickly to facilitate real learning, and they can impede the instructive long marches that ultimately carry an organization forward. That is why imagination, professionalism, and openness are essential to leadership, not just to leading change. They give organizations the tools to absorb and apply the lessons of the moment. Likewise, techniques that facilitate change within organizations -- creating listening posts, opening lines of communication, articulating a set of explicit, shared goals, building coalitions, acknowledging others -- are key to creating effective partnerships and sustaining high performance, not just to managing change. They build the trust and commitment necessary to succeed in good times or in bad. Even periods of relative stability (unusual for most organizations) require such skills. Change has become a major theme of leadership literature for a good reason. Leaders set the direction, define the context, and help produce coherence for their organizations. Leaders manage the culture, or at least the vehicles through which that culture is expressed. They set the boundaries for collaboration, autonomy, and the sharing of knowledge and ideas, and give meaning to events that otherwise appear random and chaotic. And they inspire voluntary behavior -- the degree of effort, innovation, and entrepreneurship with which

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employees serve customers and seek opportunities. Increasingly, the assets that cannot be controlled by rule are most critical to success. People's ideas or concepts, their commitment to high standards of competence, and their connections of trust with partners are what set apart great organizations. All these requirements can be enhanced by leaders, but none can be mandated. For all of the upheaval of the past 15 years, that may be the biggest change of all. Innovating in the Age of Mega Mergers Do mergers and acquisitions impair innovation? It depends on the nature of the deal and the abilities of leaders. Some consolidations, such as the effectively managed merger of Sandoz and Ciba Gigy to form Novartis, are growth-oriented. In that case, most of the pieces that were combined, and eventually sold off, were in the chemical business. What remained was a new, strategically coherent life sciences company. It can grow by building new knowledge and collecting in one place a set of diverse products that previously had been scattered. The key for leaders in a growth-oriented merger -- where the aim is to tackle new markets and do things together that could not be done separately -- is to foster communication, encourage involvement, and share more knowledge of overall strategy, special projects, and how the pieces of the new entity fit together. On the other hand, many mergers are aimed primarily at reducing capacity and cutting costs. That is the case in most of the recent banking and financial services mergers, for instance. These consolidations, and the efficiencies that result, can make good economic sense. Yet massive organizational change often drains so much time and energy that the sustainable

benefits of the long march are lost, and the temptations of the bold stroke are irresistible. Often this leaves leaders with the task of putting the best face on what, for many employees, is not a promising future. Mergers that focus on cost cutting -- often necessary to pay for the deal and to satisfy the demands of shareholders -- can threaten the funding of promising experiments and disrupt innovation. Massive mergers can also drive out the knowledge that fuels innovation. Merged organizations often lose a degree of staff professionalism because people resent losing a voice in their destiny or having to do tasks that they're not prepared for. Training budgets and opportunities for collegial exchange also tend to shrink. Most consolidations fail to create more integrated, value-adding enterprises and fall short of their promised benefits. That is what makes them such a demanding test of leadership. Sticky Moments in the Middle of Change -and How to Get Unstuck Every idea, especially if it is new or different, runs into trouble before it reaches fruition. However, it's important for change leaders to help teams overcome four predictable -- but potentially fatal -- roadblocks to change. • Forecasts Fall Short. You have to have a plan -- but if you are doing something new and different, you should not expect it to hold. Plans are based on experience and assumptions. When attempting to innovate, it is difficult to predict how long something will take or how much it will cost (you can predict, however, that it will probably take longer and cost more than you think). Change leaders must be prepared to accept serious departures from plans. They must also understand that if they hope to encourage innovation it is foolish to measure people's performance according to strictly planned delivery.

• Roads Curve. Everyone knows that a new path is unlikely to run straight and true, but when we actually encounter those twists and turns we often panic. Especially when attempting to make changes in a system, diversions are likely, and unwelcome. It is a mistake to simply stop in your tracks. Every change brings unanticipated consequences, and teams must be prepared to respond, to troubleshoot, to make adjustments, and to make their case. Scenario planning can help; the real message is to expect the unexpected. • Momentum Slows. After the excitement and anticipation of a project launch, reality sinks in. You do not have solutions to the problems you face; the multiple demands of your job are piling up; the people you have asked for information or assistance are not returning your calls. The team is discouraged and enmeshed in conflict. It is important to revisit the team's mission, to recognize what's been accomplished and what remains, and to remember that the differences in outlook, background, and perspective that now may divide you will ultimately provide solutions. • Critics Emerge. Even if you have built a coalition and involved key stakeholders, the critics, skeptics, and cynics will challenge you -- and they will be strongest not at the beginning but in the middle of your efforts. It is only then that the possible impact of the change becomes clear, and those who feel threatened can formulate their objections. This is when change leaders -- often with the help of coalition members, outside partners, or acknowledged experts -- can respond to criticism, remove obstacles, and push forward. Tangible progress will produce more believers than doubters.

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CORE TASKS FOR SUCCESSFUL CHANGE MANAGEMENT S. RAMNARAYAN

Ramnarayan is a professor of OB at theIndian School ofBusiness. He has a PhDfrom WeatherheadSchool of Management,Case Western ReserveUniversity, and aPGDIM from JamnalalBajaj Institute ofManagement Studies.He has a number ofpublications to his crediton change managementHe was formerlyteaching at the IndianInstitute of Management, Ahmedabad, OttoFriedrich University ofBamberg, Germany, andCase Western ReserveUniversity. He is activelyguiding large scalechange initiatives.He is on the boards of anumber of companies inIndia.

Organizational change can occur in many forms. It can, for instance, include accelerating growth, leading transformation or arresting decline. All these three forms of change need to be managed. In the growing literature on change management, transformational change has attracted a lot of attention. Referred to also as radical change, frame-breaking change or reinvention, this type of change often involves simultaneous alterations in strategy, structure, and culture of an organization. Transformational changes face a high risk of failure with estimates of successful transformations ranging between 20 and 40 per cent. Over several years, we have closely observed these changes unfold in a large number and wide variety of organizations. We have noticed that effective change leaders get people to assume ownership and engage with difficult problems facing the group or the organization. For doing this, they tackle major challenges required to bring about changes in people's values, beliefs, habits, ways of working and ways of life. In short, they recognize that successful organizational change is primarily about changing the way in which people think and act. Our inquiry of the change management journey in different organizations has shown that there

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are four main challenges that are crucial to the change leader's success as a navigator through the rocky process of altering mindsets. We list these challenges below and also briefly refer to different roles that change leaders would be expected to perform: (a) Appreciating Change: This requires tuning to people's mindsets inside the organization and outside forces of change impacting the organization. This task addresses the challenge of clear articulation of the destination and an appreciation of what is required to reach that destination. To perform this core task effectively, the change leader has to be a cognitive tuner. (b) Mobilizing Support: This involves more than mere exhortation of people to do the right things. It refers to strengthening influence and communication efforts to muster, assemble, and rally people together to bring about meaningful change. This task requires change leader to be a people catalyzer. (c) Executing Change: This entails designing, building and sustaining a social architecture that can establish new routines to replace old routines. Just as the mould determines the shape that jelly takes, right structures and processes create the architecture for desired cross-functional linkages and innovation efforts to emerge.

To address the challenge of executing change, the change leader should function as a systems architect. (d) Building Change Capability: This involves creating positive context that enables people to have faith in their own capabilities, take risks and learn. By engendering a feeling of optimism and hope, change leader fosters a positive belief in people that they can face challenges of change. This positive belief lies at the heart of capability building. Thus change leader should be an efficacy builder. Change management failures occur because one or more of the above challenges are not addressed effectively. In rest of the paper, we'll briefly review what each one of the above four roles entails.

Leadership

Appreciating Change A traditional organization had sought to make certain important structural interventions to be able to face greater competition. Accordingly, teams were constituted and resources were allocated. The objective was to strengthen interface management among the key functions for developing new products. For the success of the change effort, employees were required to behave in ways that would be qualitatively different from the manner in which they had been used to operating. For example, the organizational members were required to work across functional boundaries

and operate with minimal guidance and specific role prescriptions to pursue larger organizational goals and priorities. This was a sharp departure from the existing methods that were characterized by hierarchical approaches, strong functional loyalties and turf concerns. For the change to succeed, people had to communicate requirements and demands, if required to individuals, groups and functions even if they were powerful. Juniors were expected to talk openly about difficulties and voice opinions freely at meetings. They had to assume responsibility. The seniors, on the other hand, were expected to actively seek opinions, encourage dissent and support efforts to modify dysfunctional procedures. They had to feel comfortable with initiative being taken at lower levels and feedback and expectations being expressed frankly by their direct reports. No thought was given to how such changes in mindsets were expected to be brought about. Not surprisingly, these mindset changes did not occur and so the structural changes did not take root. There was also no clarity on how the inherent contradictions among different sub-goals were expected to be resolved. For instance, the sub-goal of new product development was at odds with the sub-goal of maximizing production of existing products. Incentive systems, goal setting and measurement procedures were not geared to accept possible higher rejections, extra costs and the dip in the top-line and bottom-line flowing from investments for the future. A key change management challenge is to ensure that all such factors are visualized and considered before the direction is frozen in terms of specific sub-goals and tasks. When people are able to visualize both the larger picture and their assigned tasks, they become hopeful, optimistic and committed to the transformation process. November

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We have referred to the leadership role for this key task as cognitive tuning because it is largely a process of reflection, analysis and thinking. Cognitive tuning occurs through the medium of dialogue and conversations. Change leaders must, therefore be skilled in initiating dialogue to both understand prevailing mindsets and make people aware of their mindsets. They also need to pay attention to the evolving environment. While cognitive tuning is all about paying attention to mental models both inside and outside the organization, one cannot understand the mental models of others unless one is aware of one's own mental model. Therefore, as cognitive tuners, change leaders need to be able to reflect on their own ways of thinking. This very act of cognitive tuning initiates change in an organization.

DMRC appointed additional personnel at important signals to help traffic police in maintaining smooth flow of traffic. Though it was clearly not its responsibility, DMRC also undertook road widening and road repairs where necessary to ensure that no road was closed at any time and people were not inconvenienced in any way. In the same way, power, water supply, sewerage and other issues were also pro-actively addressed.

Mobilizing Support

When change leaders emphasize the content of change at the expense of process, they may wrongly perceive the process from a limited perspective of education and exhortation. Change involves a long and difficult journey, and managers need to listen to diverse views, keep making changes in a variety of settings, and keep up the momentum of the change campaign. An important set of leadership challenges pertain to: building supportive coalitions; evaluating the interests of people whose support is needed; altering people's incentives for change; framing and crafting the message in a way that evokes support; instituting a process that is open, transparent and inclusive; consulting as widely as possible before making a decision; attend to the timing issue; and sustaining the momentum as mobilizing is not a one-time activity. This requires a blend of logic, emotions and values. That's the reason why we have termed the change leader's role as one of 'people catalyzer'.

When Delhi Metro Rail Corporation (DMRC) undertook the massive project in the Nation's Capital, the leadership realized that among other challenges, it had to generate external support from Delhi's residents, politicians, bureaucrats, contractors and several other groups. The project owes its success to effectively managing the dependencies on a wide array of these external stakeholders. To illustrate the leadership's approach, let us examine how the public support was mobilized. The leadership saw the challenge not merely in terms of communication, but as winning people over to the corporation's philosophy and approaches. For example, a number of procedures were instituted at work sites to minimize disturbances. The procedures even specified that the vehicles should not be allowed to leave the work sites without their tyres being cleaned. As the other public utilities were notorious for their inefficiency, the interface with those agencies was handled by taking additional responsibilities to ensure that there was no public discontent. For instance, when traffic diversions had to be made,

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Right through the process, there were regular community interaction programs. People were provided advance intimation and regular updates by using several media. Help lines were available to report difficulties. As a result, the project consistently enjoyed a great image in the eyes of the Delhi residents and received their support whenever required.

Executing Change In the celebrated case of Nissan's turnaround, the new leader found that the organization had

very capable people; but the organization's architecture in terms of its hierarchy, procedures, policies, and decision-making processes had contributed to a culture of learned helplessness. Compartmentalization of functions/ roles and rivalry between departments/ divisions had reached such an extent that there was a culture of blaming each other for organizational problems. Employees had lost both focus and energy. Changing anything seemed to be a huge task beyond any individual's capacity. To convert this learned helplessness into learned optimism, the leadership altered both the structure and the culture of the organization. Cross-functional teams (CFTs) were set up to address critical issues. CFTs were supported by a number of thoughtful interventions, and so they became instrumental in creating a strong foundation for the remarkable turnaround of the company. Another case that has attracted a great deal of attention is the remarkable transformation of the Indian Railways. The increase in the axle loading from 20.3 tons to 22.9 tons led to a significant impact on the performance of the mammoth organization driven by strong systems and documentation and governed by manuals and codes. The change agents recognized that resorting to directives or orders at any stage would appear superficially to hasten the change process, but would create problems at the execution stage; it would also not allow change to develop roots and get institutionalized. To make the change last, the change managers painstakingly involved different stakeholders through detailed background work, sharing and discussing these in one on one meetings, committee deliberations, exposure visits, pilot testing and so on. For example, the concerned officials from technical directorate, traffic wing, finance department, research designs and

standards organization, chief commissioner of railway safety, audit and other agencies were involved in examining different facets of the change. Important amendments were made in the engineering code, bridge code, mechanical code, preferential traffic order, and traffic schedule. The change agents were patient and meticulous in their efforts to prepare the ground for the launch of the change initiative. Their hard work contributed to effective execution and institutionalization of change. As we can see from these two experiences, a key change management challenge is to facilitate modification of mindsets by attending to four requirements: exposing people to alternative perspectives; enabling people from different functions to work together; identifying and removing roadblocks to modifying existing routines; and creating new routines to focus the organization's attention on continuous improvement. Change leadership establishes a context that facilitates these four requirements. This is done by creating an appropriate architecture that is made up of roles, responsibilities, systems and procedures. We refer to this important change leadership role as that of a systems architect. As a systems architect, leaders create crossfunctional linkages in the organization; align policies, procedures and remove structural impediments to performance and change; and create new routines for continuous improvement. Apart from the emphasis on structure, leaders also pay attention to creating a climate of hope and optimism by clarifying purpose, enhancing preparedness and providing psychological safety. Building Change Capability For a company that is almost 100 years old, Tata Steel has shown remarkable agility since the early 1990's. When the forces of liberalisation were set in motion, the leadership put in place myriad processes to prepare the November

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company for global competition. Over a hundred teams were mobilised to bring about improvements in different areas. Cumulatively, over 5000 people were entrusted the challenge of carrying out various initiatives for modernising mindsets of the company's 40,000 employees, enhancing quality, bringing about radical performance improvements through 'Total Operational Performance' (TOP), creating a market-oriented organization, debottlenecking facilities, phasing out technologically obsolete plants, adding new facilities for manufacturing value-added products, capacity expansion and so on. The entire workforce of 40,000 people was trained in certain improvement techniques to change patterns of thinking. A major change initiative called ASPIRE (Aspirational Initiatives to Retain Excellence) was launched to use teams as an instrument and source of innovation in the company. The idea was to get people to look at existing operations with new eyes, be innovative and translate the ideas into effective ground-level implementation. Not surprisingly, the company has been rated among the top five steel producers in the world for the last four years by the World Steel Dynamics. The purchase of Corus has also propelled the company to a high world ranking in terms of size. Though the company changed all the components of capability - its skills, systems, structure, strategy and culture, the heart of the

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leadership lies in building self-efficacy. Selfefficacy refers to the confidence an individual has in his or her ability to achieve challenging goals. A high level of self-efficacy makes it easy for individuals to learn new things because they experience less learning anxiety. As we have noted, the subjective world and mindsets of organizational members determine what they see and how they would think and act. This change leadership role of fostering a positive belief in people that they can face the challenges of change and overcome them has been termed as 'efficacy builder'. To build self-efficacy, leaders enhance the aspirations of people to face challenging tasks. They create positive role models for others to emulate; design incentives that induce people to set high goals for themselves; ensure that there are support mechanisms to help people achieve their stretch goals; and promote learning as a desirable goal in the organization. In short, they structure opportunities for people to set challenging goals and achieve them. Finally, it is important to note that a single leader need not necessarily address all the four sets of challenges by himself/herself. An effective change leader understands his or her strengths and limitations and teams up with other leaders having complementary strengths so that the leadership team can perform all four roles to be able to navigate through the complex challenge of altering mindsets.

DRIVING ORGANIZATIONAL CHANGE LEENA NAIR AND ANKUSH PUNJ

Abstract

Leena is an Electronic Engineer who discovered her passion for people and HR and switched lanes. She went on to complete her MBA in HR from XLRI, Jamshedpur. She has worked with Unilever for the last 15 years in a variety of roles like - Employee Relations Manager, Management Development Manager, Business Partner for the Home & Personal Care Business. She has championed many HR initiatives like Diversity, Enterprise Culture, and Coaching. With her recent appointment as Executive Director-HR, Leena has become the first woman on the Management Committee of HUL.

The only constant in the new World - Change is a major challenge in large-sized organizations where the sheer size as well as the comfort of past successes causes inertia and resistance to change. Change management is the single most important leadership accountability and driving change initiatives successfully is a key HR deliverable. In scores of big and small Change initiatives that we have driven across in HUL, it has been our experience that Change can be successful and Resistance to Change can be overcome if a whole systems approach is followed and where the complete organization along with its Structures, Systems and People, processes, are viewed in totality studying the impact of one on the other in view of the Change that is being driven in the organization. The paper focuses on certain tools at the disposal of the HR team to drive change seamlessly and embed it in the DNA of the organization: 1. Leadership Engagement Change and Culture is driven from the top. Success is half achieved if the leadership team is committed to and prepared to prescribe the Change 2. Rewards and Recognition The most effective HR tool to drive alignment in behaviors 3. Communication and Buzz Generate curiosity and excitement towards the Change initiatives 4. Capability building Up-skill and de-skill employees to align organizational capabilities with the New Organization.

Ankush Punj is the Corp Employee Relations Manager of Hindustan Unilever Limited. XLRI batch of 2003, Ankush joined HUL as a Business Leadership Trainee and in his first assignment was the HR Manager of HUL factory in Sumerpur (UP) for two years before moving into the Corporate ER role.Ankush is an avid trekker, marathon runner and passionate about reading, writing, travelling and music.

The paper also touches upon Resistance for Change and measures to overcome the same. In achieving the above we have generously borrowed from Change theories and personal experiences of driving Change in HUL.

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Driving Organizational Change Conducting business in a fast evolving environment where the rate of change itself is accelerating every minute is a challenge which most of us have not experienced in the past. Even to be relevant in this world of Change, organizations have to continually adapt and evolve - call it the era of Survival of the Agile and Adaptable. In large organizations like ours, the sheer size and the inertia makes embarking on a change initiative itself a challenge, as it calls for acknowledging the fact that historical success does not guarantee future success. Real change is not incremental but usually fundamental and accompanied with a lot of resistance and pain. In our experience of driving change especially in large organizations, we have evolved certain method to its madness which has proved rather fruitful; this includes abundant borrowings from Change theories as also learning we have acquired en route. As an HR team, we find ourselves in the middle of all sorts of change initiatives, viz, restructuring a department/ team, driving behavioral change, creating a growth mindset, promoting inclusion, improving the effectiveness processes and teams towards delivering organizational objectives. Driving behavior/culture change is the toughest change process to deal with it, and this paper focuses a little more on those aspects. Making sense of the Change - the Basic Ingredients It is imperative to begin with identifying the triggers in the external environment that are forcing an organization to undertake the change process, while simultaneously map the internal drivers for change and then review the organization's People, Systems and Structures to identify the facilitators and the inhibitors towards this Change process. Viewing any of the above elements in isolation

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can be catastrophic. Rather change initiatives that are often brought in under the guise of total quality management, re-engineering, or strategic planning often fail because the underlying culture is not addressed or fundamentally altered to align with the structure and processes. Edgar Schein postulated three levels of culture; starting form the outermost layer of physical artifacts which include observable daily features of organizational life such as activities, rituals, jargon, office layouts, and so forth, the middle layer of values and beliefs espoused by the organization and the innermost core level of basic assumptions including our deepest and most comprehensive explanation of reality - our views of fundamental truths about people and the world While most organizations succeed in bringing about a change at the superficial artifacts level however to drill down and challenge the basic assumptions and changing those is the most difficult process. These may often not even be evident at the surface; as is the case of Values, which often may differ between what is espoused and what is really existent! So while the organization structure, systems and the Corporate Purpose read one thing, the way the organization is run is an altogether different story. To initiate on the path of driving organizational change, it is imperative to diagnose the existing organization culture; and its fit with the current and proposed business strategies and create a vision for the preferred future. Driving Change - Role of HR Driving Change is one of the most important and difficult responsibilities in an organization; in fact it is the essence of leadership as rest is more or less secondary. Human Resources as a function plays the pivotal role in every aspect of driving Change in the organization; creating a shared need for

change, preparing the leadership and the organization at large for the inevitable Change and then seeing the process of Change through! In our experience the success of the Change process is determined by a multitude of factors of which Top Leadership forms a single most important element.

Aside from Leadership team visibly demonstrating the desirable behavior ("Walk the Talk"), the organization's reward and recognition models too must align themselves around the Change behaviors desired. Employees are quick to learn what it would take one to make it up the organization ladder;

Tools to Drive Change - Top Leadership Engagement

• what the top leadership team displays,

The single most critical role of the HR Champions in their organizations is to closely engage with the leadership team and induct them into the Need for Change. The process of leading change is a shared leadership accountability.

• behaviors and initiatives that they get recognized for,

Any major change initiative in an organization has to be guided by the top management team. The success of a change initiative lies in its sustenance and being woven into the very fabric of the organization. This is possible only if the top management team is as driving and living the Change that they espouse. Leadership conversations as well as demonstration is important. Eg. If consciousness for personal safety is being embedded in a organization, then the leaders at every forum must talk about it, must engage their teams on safe and unsafe behavior. They must equally ensure that they personally 'live' safe behavior, viz, using a safety belt at all times in their cars, following simple safety norms. People ultimately practice what leaders practice and not what they preach! HR at all times must play the role of the conscience keeper to alert leaders to the gaps between what they 'say' and what they 'do'. Tools to Drive Change - Rewards and Recognition What gets rewarded; gets driven! The most visible cue an organization offers to its employees' on desirable and undesirable behaviors is through its rewards structure.

• people who get recognized,

• individuals who are put on fast track programs etc They modify their way of working to align with the rewarding behaviors to grow faster in the organization. Tools to Drive Change - Communication and Buzz It is vital to create a lot of buzz and excitement around any Change initiative. A sense of curiosity around what is going to Change and what holds in the offing helps generate a positive welcoming vibe for the Change initiative being driven. A simple measure of effectiveness of Communication is the number of positive messages and the number of negative messages that are communicated in the organization's formal and informal (grapevine) networks around any Change initiative. If the net of the two is positive, the success of the Change initiative is far more assured than if the net is negative. Now one can sit and wait for the cows to come home or play the more proactive role of the "Change driver" (the HR team) and actively feed into the network as many positive messages as possible. The trick here is to identify the most active nodes which literally are far more wired in the organization than the others and feed those with more positive messages to be drilled down across the November

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organization. Important, it is, to realize that in any Change initiative it is the 10% of the resources who lying at either end of the positive (early adopters) and the negative ends (change resisters) can sail through or capsize the entire initiative. Identification of the same is extremely critical, and while at one end those in the favor of the Change should be encouraged and visibly recognized in the system, the alienation or separation of those at the far end of the negative tunnel is also equally essential for the success of the Change initiative. If the Noah's Ark has to take forward all that is good and desirable in the new world; it has to begin by identifying and segregating the unaligned and incongruent!

they do not understand or find essential. This can easily be tackled through the process of Communication, Creating a compelling vision of the future, Appreciative Enquiry processes etc. However more often than not, resistance to Change does not owe to lack of understanding or knowledge but because of a more fundamental problem…Change challenges the status quo. This is a bigger and a more deepseated problem to resolve.

Tools to Drive Change - Capability Building

• Change in position, status, earnings or even importance

Lastly, some change initiatives may call for acquisition of newer skills and competencies, adoption of newer ways of working and interpersonal dealings; this may necessitate the organization to undertake formal capability building initiatives. However this would rarely be an impediment and thus appears at the bottom of the list because invariably our capable and star resources once, they identify the behaviors and skills that get rewarded and revered in the organization, invariably either emulate the same or find ways of covering those capability gaps on their own in order to stay ahead in the organization. Resistance to Change The toughest challenge with any Change initiative is that it is always accompanied with Resistance and the more sweeping the Change, the stronger the Resistance Why is there a resistance to change? Resistance to Change is usually on account of the following two broad reasons: Sometimes on account of lack of information or understanding of why the recommended change is so inevitable; so people resist what

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Big or small, every change challenges the status quo and may cause: • Redundancy • Change in job content • Change in social grouping

Richard Beckhard and David Gleicher beautifully captured Resistance and how to overcome the same in the following formula: D V F > R (e + p) Where D = Dissatisfaction with the Current ways of working V = Vision created by the organization of "What is possible" F = Concrete steps that can be taken towards the Vision R = Resistance(economic as well as psychological) The push and pull between these forces determines the success or the failure of a Change initiative. Resistance is also referred to as the cost of change; and in the above equation is segregated into economic and psychological cost of change. Even if financially the cost of change is low, the change will still not occur should the psychological resistance of employees be at a high level.

However the good news is that the above factors are not static and in our experience of driving change initiatives the dynamic factors on the left had side can be effectively loaded with effective deployment of the four tools of Leadership: Engagement, Reward and Recognition, Capability building and Communication and Buzz to ensure that the balance tilts in favor of Change. The greatest challenge in D is that often people learn to live and "manage" in the existing ways of working and the "dissatisfaction" often becomes a way of life not usually surfacing quite openly in the organization. To drive a change initiative it is critical to heighten the levels of dissatisfaction with the process/ behavior that needs to be changed. This can often be done through initiatives like "Appreciative Enquiry"! Other initiatives like "co-creating" a shared vision, eg., what is the organization you want to be a part of, evolving a theme, an anthem etc are some initiatives that help to create buy in as well as creating a vision of the Ideal/desired state and preparing the organization for Change. Inclusion of all stakeholders through different interventions. As the organization formally steps into the journey of affecting change, Communication and Capability building play a critical role in further tilting the balance in favor of the Change. Concrete steps taken towards achieving the Vision need to be visibly seen and felt by the employees, periodic updates on progress made, seeking feedback, informal conversations, training people on new ways of

working etc all help drive change through and through the organization. Was the Change Initiative successful? At the end of any change initiative the question that would always confront the leadership team would be "Has the Change been successful?" To answer this, it is imperative to get the Vision that it had set out for the organization. Change is affected only if the desired business goals as was visualized to begin with has been achieved in the end. As most Change initiatives involve behavioral change, formal dipsticks from a cross section of people impacted by the Change should be undertaken to measure the impact of the Change. The success of a change initiative has to be measured at different levels. At input level are the milestones being met, at the output level are the Business goals being met. The change impact has to be measured or reviewed. Closing Remarks Kurt Lewin had described Change as a simple three step process such as Unfreezing, Changing and Refreezing. Moving too quickly through the stages can endanger the success of a change effort. People typically transit through a series of emotional stages as they adjust to the need for a drastic change in the lives; and that is why the HR team is indispensable to the Change process. As every change process is invariably a behavioral change process, the HR teams are usually placed in the "eye of the storm" and owe the responsibility of sailing the organization through the stormy seas through innovative practices designed around Change models and prescribed tools.

References Beckhard, R. (1969). Organization Development: Strategies and Models. Addison-Wesley, Reading, MA Gladwell, Malcolm (2000). The Tipping Point – How Little Things Can Make a Big Difference. Little, Brown & Company Schein, Edgar (1992). Organizational Culture and Leadership. Jossey-Bass Inc., California. Silverman, Lori L. (1997). Organizational Architecture – A Framework for Successful Transformation. Partners for Progress November

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MEASURING ORGANIZATIONAL CULTURE AND CHANGE RAJEEV KUMAR Abstract

Organizational change invariably entails some impact on organizational culture. However, organizational culture must be qualitatively and/or quantitatively measured to comprehend the changes. After briefly introducing the concepts of organizational culture and sub-culture, various qualitative and quantitative techniques for interpreting the nuances of organizational culture are reviewed in this paper. Practitioners can make more informed decisions about occurrences of cultural change based on this review. As early as 1965, the concept of culture was gaining prominence in business education and research (Wadia, 1965). Over the last four decades, culture has become a buzzword in social sciences. Executives and researchers both recognize its role in any organizational change effort. Since the germinal study of Pettigrew (1979), a number of research studies have used organizational culture as a variable. Both qualitative and quantitative techniques have been employed to measure organizational culture. This paper presents a brief introduction to the concept of organizational culture and sub-culture. An evaluative review of techniques used to interpret organizational culture is presented subsequently.

Culture

Rajeev Kumar, a Fellow from IIM, Ahmedabad, and an MBA from IIFM Bhopal, is an Assistant Professor of HRM at the Institute of Management and Technology, Ghaziabad .He has previous work experience of more than 4 years across Hewitt Associates and an NGO-Society for the Promotion of Wastelands Development .

The concept of culture was originally used in anthropology (Wadia, 1965). Culture, as initially used in anthropology and later in sociology, referred to a way of life, shared norms and values. It was supposed to operate at subconscious levels, and yet in a powerful manner. Scholars offered several definitions of culture, and Kroeber and Kluckhohn (1952, as quoted in Detert, Schroeder and Mauriel, 2000) identified several common elements in the different definitions of culture. Combining these commonalities with another review provided by Wadia (1965) yields the following attributes of culture: • Culture is historically created • Culture guides the behaviors of individuals

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• Culture is inherent in explicit and tacit beliefs, customs, values and morals. • Individuals acquire the constituent elements of a culture as they live in a society. Sub-culture In a society or a group, there may be some characteristics that distinguish one group from another. The term sub-culture is often used to denote such categories. Sub-cultures develop to address some common problems or experiences of a group (Daft, 2008). The need to distinguish between culture and sub-culture is particularly important during the change efforts in a large and complex culture. A more directed discussion on culture and subculture is presented below while describing organizational culture.

Organizational Culture and Sub-Culture Organizations have been conceptualized as socio-technical systems (Parikh and Garg, 1992). People who constitute an organization (employees, managers, owners, etc.) come from a societal culture, or possibly sub-culture. The interplay between this "social" reality and "technical" rationality of organizations is a defining feature of organizations. This view of organizations makes culture an integral part of any organizational change effort. The concept of culture in organizational research is more than two decades old now. The credit for introducing culture in organization theory generally goes to Pettigrew (Detert et al., 2000). However, the concept has often been used vaguely (O'Reilly and Chatman, 1996). At the same time, the realization of the importance of organizational culture in the context of organizational change has also grown (Detert et al., 2000). A wide variety of specifications of organizational culture prevail in literature. But over the years, some agreement has emerged around the following key features: • Organizational culture contains some combination of artifacts, values and beliefs and underlying assumptions that organizational members share about appropriate behavior. (Cook and Rousseau, 1988) • These shared conceptions act as a normative guide for behavior (Daft, 2008). • Organization culture is holistic, historically determined, socially constructed and exists at variety of levels (Hofstede, Neuijen, Ohavy and Sanders, 1990). The many levels of organizational culture are depicted in the following picture (Schein, 1985): It should be noted here that the real interpretation of organizational culture in the

context of organizational change efforts is quite complex. A renowned expert in the domain of organizational change and culture, Edgar H. Schein, has aptly summarized these complexities when advising consulting psychologists to avoid the trap of assuming "…that your client knows what culture is and does, and, worse, you assume that you know what culture is and does" (Schein, 2003: 79). Nevertheless, it is useful to be aware of the techniques that can provide some grip over the different nuances of culture in an organization. Therefore, a review of such techniques is presented here. Overview of Techniques The methods to measure culture can be broadly put in two categories, qualitative and quantitative. It should be noted that some scholars advocate the use of multiple methods to measure organizational culture (Martin, 1992). Blalock and Blalock (1968) suggested that firstly one should use qualitative techniques, to be supplemented by quantitative assessment subsequently. In the following sections, a review of various methods is provided. Qualitative Techniques Qualitative methods do not attempt to ascribe a number to various aspects of organizational culture. They allow researchers and practitioners the flexibility of digging deeper into various aspects of organizational culture. Some of the classic approaches used to study organizational culture involve the following: • Case studies: A case study focuses on understanding the nuances of a single setting in depth. Case studies can be done at multiple level of analysis, i.e., individual, group or organization. Typical techniques of data collection for case studies include interviews, archives, observations, etc (Yin, 1994; Eisenhardt, 1989). November

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• Ethnographic studies: This technique is particularly important in social sciences, though organizational sciences have increasingly used it. It involves a long period of systematic observation by a researcher. During the phase of observation, the observer almost merges with the culture s/ he is studying. Extended time required for such studies, however, is a drawback. • Action research - This method is being increasingly employed in social development sector. However, its use in organizations is limited. In an important contribution, Trice and Beyer (1984) proposed that organizational culture can be studied through rites and ceremonies followed in an organization. Metaphors can be useful in studying culture (Morgan, 1997). Quantitative Techniques Organizational culture is an all-encompassing concept that needs to be broken into manageable proportions for study (Meek, 1988). The quantitative measurement of culture focuses more on what a culture has (Smircich, 1983). A general agreement seems to be that quantitative approaches are more capable of measuring the general, shallow level of culture, and qualitative studies are more capable of penetrating the deeper levels of value system, assumptions, etc (Ashkanasy, Broadfoot, and Falkus, 2000). Quantitative methods try to capture the manifestation of culture only, which may occur as a behavior (a manifest action) or a thought or feeling. These methods do not have the capacity to penetrate and directly touch the deeper layers of culture. Several instruments have been developed, but unfortunately they vary widely in format, items, etc. These instruments can be clubbed in two broad categories (Ashkanasy et al., 2000): • Typing scales - These classify organizations into particular taxonomies.

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• Profile scales - These describe the culture of an organization. Ashkanasy et al. (2000) reviewed 18 scales of organizational culture. Some of these scales measure norms while some other measure values. Of these, complete reliability and validity assessment was reported for only two scales and partial reporting was available for four other scales. It should be noted here that reliability and validity assessments help determine the scientific soundness of an instrument, and hence one should avoid using scales with unknown reliability and validity. An important issue to consider here is the scientific equivalence of scales when translating scales for usages in local languages. One way of ensuring this is back-to-back translation (Brislin, 1986). This is an accepted procedure for translating scales in some other language. In this procedure, a bilingual translator translates the original scale into a local language. Then a second bilingual translator translates the local language version back into the original language of the scale (mostly English). A third bilingual compares the original and back-translated version and the discrepancies are sorted out. Concluding Remarks It is important to realize the importance of organizational culture in the efforts aiming at organizational change. Though it would be erroneous to assume that even an insider would have complete grasp over organizational culture (let alone an outside consultant), it is useful to adopt scientifically discussed and tested techniques of interpreting organizational culture. This paper offers a brief review of such techniques which can be useful for practitioners dealing with issues of organizational culture and change.

References Ashkanasy, N. M., Broadfoot, L. E. and Falkus, S. 2000. Questionnaire measures of organizational culture. In N. M. Ashkanasy, C. P. M. Wilderom and M. F. Peterson (Eds.). Organizational Culture and Climate. Sage Publications, Thousand Oaks. Blalock, H. M. and Blalock, A. B. 1968. Methodology in Social Research. McGraw Hill, New York. Brislin, R. W. 1986. The wording and translation of research instruments. In W. J. Lonner and J. W. Berry (Eds.). Field Methods in Cross Cultural Research. Sage, CA. Cooke, R., & Rousseau, D. 1988. Behavioral norms and expectations: A quantitative approach to the assessment of organizational culture. Group und Organizational Studies, 13: 245-273. Daft, R. L. 2008. Understanding the Theory and Design of Organizations. Cengage Learning, New Delhi. Detert, J. R., Shroeder, R. G. & Mauriel, J. J. 2000. A framework for linking culture and improvement initiatives in organizations. Academy of Management Review, Vol. 25. p. 850-863. Eisenhardt, K. M. 1989. Building theories from case study research. Academy of Management Research. 14, p. 532-550. Hofstede, G., Neuijen, B., Ohavy, D. D. & Sanders, G. 1990. Measuring organizational cultures: A qualitative and quantitative study across twenty cases. Administrative Science Quarterly. 35, p. 286-316. Martin, J. 1992. Cultures in Organization: Three Perspectives. Oxford University Press, NY. Meek, V. L. 1988. Organizational Culture: Origins and Weaknesses. Organization Studies. 9, 453-473. Morgan, G. 1997. Images of Organization. Sage, Thousand Oaks. O’Reilly. C. A., III, & Chatman, J. A. 1996. Culture as social control: Corporations, cults, and commitment. In B. M. Staw & L. L. Cummings (Eds.), Research in Organizational Behavior, vol. 18: 157-200. Greenwich, CT: JAI Press. Parikh, I. J. and Garg, P. K. 1992. Theory of socio-technical systems. In I. J. Parikh and P. K. Garg (Eds.) Organization Theories, Issues and Applications. Indian Society for Individual and Social Development, Ahmedabad. Pettigrew, A. M. 1979. On studying organizational cultures. Administrative Science Quarterly. 24, p. 570-581. Schein, E. H. 1985. Organizational culture. In R. Kilmann, M. Saxton and R. Serpa (Eds.) Gaining Control of the Corporate Culture. Jossey Bass, San Francisco. Schein, E. H. 2003. Five traps for consulting psychologists or, how I learned to take culture seriously. Consulting Psychology Journal: Practice and Research, 55, 75-83. Smircich, L. 1983. Concept of culture and organizational analysis. Administrative Science Quarterly. 28, p. 339-358. Trice, H. M. and Beyer, J., M. 1984. Studying Organizational Cultures Through Rites and Ceremonials. Academy of Management Review. 9, 653 – 669. Wadia, M. S. 1965. The concept of culture. Journal of Retailing. 41, 1, p. 21-30. Yin, R. K. 1994. Case Study Research – Design and Methods. Sage Publications, CA. 1 Reliability estimates communicate to what extent the items of a scale measure a common attribute. Validity assessments tell if the attribute getting measured is the one that we want to measure. November

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MANAGEMENT OF CHANGE: CRITICAL FACTORS TARUN SHETH

Abstract

Management of change is essentially the management of direction. In my opinion this is the core, fundamental point. In a way, the direction can itself be a means to an end. However, the choice of direction involves the choice of ends. Strategizing change, choice of the change agent, the cost of change and implementation are all means to support the fundamental choice of direction. The second part of management of change is execution. Execution includes planning for change as well as executing its key elements, including handling communication and human resource and cultural issues. Both the above issues are part and parcel of a leadership initiative and hence leadership is probably the most important part of management of change. While there are many elements to management of change, we are going to touch on the above key areas due to limitation son the length of the article. In this article we shall make observations on business organizations. The term organization can apply to governments, social communities, voluntary and informal bodies etc.

Tarun Sheth taught at the University of Baroda and IIM, Ahmedabad. Worked with Hindustan Lever as head of Organization Development for all companies in India, i.e., HLL, Lipton, Brooke Bond and Ponds. Currently consulting with domestic and international companies for HR strategy, systems, structures compensation, recruitment, training and coaching.

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Direction

are being addressed.

Management literature on change does include the issues of direction but the vast majority of writings focus on managing change and assume that the direction is a given. At the organizational level, all the elements or parts are interrelated and therefore managing change implies analyzing the interrelationships and then managing the process. While it is important to know the interrelationships, the trick is in knowing and choosing the direction and then bringing in the management of interrelationship in the change process.

Organizational framework for identifying change areas

In the overall organizational situation the direction can be in any area. For the purpose of convenience we present a list through which you could identify or choose directions in various areas depending on the issues that 2007

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The following is an indicative list of areas that can aid in identifying change in direction and then prioritizing and managing them: I) Individual • Role clarity • Fitments in the role • Competence/skills • Personality/Motivation II) Group • Goals • Focus • Structure • Skills/ Competence • Morale III) Functional • Marketing/Sales

• Finance and Accounts

this choice can give different results.

• Technical/Production

Take the telephony business. A large industrial group decided to go for the telephony business. The new direction required defining the business, management of government and its legal provisions, creating a marketing organization, bringing in technology and creating a structure that could provide focus, direction, supervision and execution. The primary direction for change required creation of a consumer-oriented business, recruiting people with experience in consumer marketing and building an organization that could focus on market, technology and customer relationships.

• Innovation/R & D • Information Processing/IT • Compliance/Legal IV) Procedures • Entry/Exit • Procurement • Accounting/Finance/Control • Development/Rewarding/Planning/ Review V)

Leadership • Consistency with Objectives/Clarity of Goals • Competence/Ability to carry people • Conservative/Change oriented • Achiever/risk taker

VI) Culture • Values/Beliefs • Norms • Employee Oriented/Control Oriented VII) Structure • Organization Structure • Hierarchy/Levels • Focus • Accountability • Supervision • Cost of the organization Leadership and change Organizations which are autocratic and do not allow free communication and freedom to disagree can make the right decisions but the lack of freedom does not give it any protection from wrong decisions unless it is too late. Sometimes you choose the right direction but the quality of management of the process in

The company was successful in christening the new business attractively, going to a new location and some specialist recruitment in sales and marketing. However, it brought leadership from the old business whose experience was in commodities and controlling costs; units were peopled with individuals with a marketing background but authority was diffused and there were issues of integration of the old with the new. As a result of the above, the first three years of its existence saw a lot of churn and failures. The choice of wrong leadership may even mix otherwise seemingly good business initiatives. Hewlett Packard merged with Compaq and put Carly Fionna to manage the change. She did not live up to the challenges of the job and had to leave. The business went through difficult times and stabilized only with a change in leadership. The Tatas who have also ventured into telephony failed to provide focused leadership and support for the change in the direction of a new business. They could have done much better but haven't. Bharti Airtel, which was relatively new, less resourceful and lesser known in the market started slowly but through management of the direction and process of change has come out November

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on top at least in numbers and growth. Although the above is a very brief account, it shows that when an organization embarks on a new business it needs to define directions, provide focused leadership, create processes appropriate to the nature of the business and clearly accept the deviation required from the past. The last one requires either new leadership to be brought from outside or picking up leaders from the existing organization with the right mind set. The thing to avoid is to appoint successful individuals from the existing business who not may be the right fit in the new business. Choosing a Direction and Managing Change Successfully IBM IBM is a good example of a company managing direction. When its progress got plateaued it felt the need for change of direction. It was not easy with existing leadership as more often than not they would dish out more of the same and cling to the past. It is the change in leadership that brought back its glory. They even took this logic further to sell their laptop division to the Chinese company Lenovo. Tata Tea One of the more successful examples of choosing the right direction and coming out on top is Tata Tea. It started as a company which owned plantations in the north and the south and was more a commodity player while other companies like Brooke Bond, Lipton and Wagh Bakri prospered through branding the commodity bought from Tata Tea. It made the decision of branding and marketing tea many years ago but the execution was poor and hence the gains were not visible. Things have changed with the acquisition of Tetley, operational leadership given to executives who understand the tea business, induction of marketing professionals, reducing stake in plantations (a high cost and labour intensive proposition) and focusing on branding,

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product development and customer satisfaction. The impact of these changes and consistency in execution is there for all to see. Debate the choice Choosing the right direction requires debate at the highest level by people who know the ground realities that include customers and the government. Entrepreneurs are good at this but some successful entrepreneurs fall in the trap of autocratic decisions for change. Such decisions may come out right as the top persons judgement can be right. However, without the benefit of differing views there is no protection if it goes wrong. Bajaj Auto's continuance with scooters, while Hero Honda ran away with customers and profits is a case in point. External Advice The decision to change direction can come from many sources. One useful channel is external consultants. As a director of a large national bank I had been observing that all PSU banks were playing within the same constraints, doing the same things and vying for organic growth. The new private sector and existing multinational banks showed that retail banking and investment banking required different skills, ambience and mindsets. Even with retail banking you need to understand the customer and raise your service levels considerably. The bank hired a professional consulting group which brought research data and market information to the table. The Chairman and Senior Executives supported the recommendation for changes in direction. The bank has started the execution of the recommendations and is benefiting from it. One important point that comes out of this experience is that while changes in direction are made in a smaller unit or part of the business, if successful, it should be carefully taken through the organization as appropriate. Trying things on a smaller scale enables experimentation, reduces cost and resources

and gives the freedom to fail. Change in Ongoing Businesses It is important to ensure that once the direction is chosen the new business is structured to provide focus and accountability. ITC chose to go into hotels as a business several years ago. They provided focus to the fledging business and accountability by creating a distinct organization and leadership with focus and accountability. The business has now grown into a very profitable division. Focus, leadership and accountability can help even existing business that require rejuvenation and/or meet tough competition. When Nirma was actively eroding Hindustan Lever's market share in the early eighties it chose to fight the battle in the field on the sales front. The company put three of its best young managers on the sales side. They turned the tide and two of them went on to become chairman of the company later. Both ITC and HLL examples suggest the importance of leadership when changing direction in existing business or perking it up. Choosing a Wrong Direction An Indian company that had been doing very well in manufacturing technology based commodities of good quality decided to change its strategy and change to branding the same and recruit FMCG managers to bring in the change. While it is true that Intel and Gujarat Ambuja cement have been successful in branding their commodity, there are more examples of people who have failed. In the case of this company the market did not accept this change. Its problem got compounded by the fact that the newly inducted expensive managers could not adjust to the underlying technology of the products and from a profitable business it slid to a loss. It has now changed direction and is on its way back to health. Multinational companies operating in India at times benefit from changes of direction initiated abroad after a lot of research and

debate. But they are also at the wrong end of receiving the stick in India when the change of direction initiated abroad does not jive with realities in India. For instance, Unilever's decision to hive off the chemical business and focus on ice creams may be consistent with the parents view of its 'core business' but may not be in sync with local realities. When People Are Affected One of the most difficult areas of implementing directional change is when it affects existing people with long service adversely. Recently, a large engineering company invited consultants to do a job evaluation of all managers. They had several hundred managers whose jobs had to be evaluated and this evaluation would affect several thousand others. This company did not have a good performance evaluation system and managers were promoted on a time bound basis to a higher level even if they continued in the same job. The consultants warned the management that a proper job evaluation will result in many jobs going down as their exalted status is only due to the fact that the incumbent has got into a higher grade in spite of doing the same job. The management in an aggressive mode agreed as they felt they needed a system. By the time the project was getting over the top management received several messages from people who feared their jobs might go down. In the end the company backtracked and very little of the consultants work was implemented. I suspect in this case the company decided to go ahead with the job evaluation project and fantasized about its will to be tough. Conclusion To conclude, management of change requires the choice of direction and then the management of various processes to support the directional change. Successful companies debate the direction, provide focus through organizational arrangements and leadership and then manage the processes.

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ORGANIZATIONAL CHANGE: THE FORMIDABLE XI RAJIV DUBEY

Organizational Change: The Formidable XI With so much written on organizational change, the only meaningful thing I can attempt is to pen the learnings from my own experience in the corporate world in the past thirty two years. I will keep it simple and stupid, largely because that is all I am capable of, and partly because of my fond hope that of the few people that actually read this article, some may resonate with and remember a thought or two.

Rajeev Dubey, is an Economics graduate and MBA from the Yale School of Management. He is Alumnus of INSEAD, France, and the Harvard Business School-TMTC Tata Strategic Leadership I Course, Ashridge Strategic Management Centre, UK, the National Institute of Advanced Studies, Bangalore, and CII- Aspen Institute, USA, Human Resource Executive Program at Stanford University, USA.

I/we have a dream: Clearly this has always been the source, and sustaining power, of any organizational change. The clearer this dream and the more forcefully it is shared, the larger the number of apostles it creates who then spread the WORD so that it enters the DNA of every person in the organization, the greater is its power. And for it to be a potent force it must touch a deep inner chord in people, activate some higher-order purpose that makes ordinary people own the dream and do truly extra ordinary things.

Rajeev joined the Tata Administrative Services (TAS), the central managerial cadre of the Tata Group, in 1975, and after a career spanning 29 years in the Tata Group, of which 7 years were as Managing Director, first of Tata Metaliks and then of Rallis India, Joined This dream needs to be talked about Mahindra & Mahindra again and again from every in 2004, he is currently possible platform, and many President (HR & Corp. people must do the talking. The Services) & Member of the Group Management power of the WORD and Board. He is on the Boards INTENTION is awesome, and its of several Group full potential must be unleashed. companies, including the Chairman of Mahindra II From dream to action: If the dream is not converted into Insurance Brokers Limited.

S.M.A.R.Tly defined WHAT,

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WHO, HOW and by WHEN, organizational change will remain a dream. This drill-down of the dream into deliverables for every individual in the organization, done with all the rigor and discipline of project management, is an exercise whose importance as a necessary and critical success factor cannot be overemphasized. I am particularly impressed by the power of the Japanese Policy Deployment methodology and its variants. III The Virtuous and Potent PDCA (Plan, Do, Check, Act) Cycle: Needless to say, these deliverables need to be regularly and systematically reviewed, lessons learnt from experience and continuous improvements made. This needs to be done with the same rigour as the conversion of the vision to specific deliverables, or else implementation/execution will remain as elusive as a will-o-thewisp in the mist and dark. The above conditions are about strategy, process, system and metrics and address the perennial three questions • Who/where are we? • Where do we go from here? • How/do we go there? These are necessary, but not sufficient, conditions for successful organizational change. I must

therefore shift gear and venture into softer (but actually much harder!) dimensions and critical aspects of behavior/attitude that will convert the necessary into sufficient conditions for change.

the self-confident to be able to see it in this light. How many of us can do so? And what price are we willing to pay for it? VI Listen : Most of us are Masters at telling others what to do, but how many use the power of listening to connect with and understand reality, to grasp opportunities, to see the sources of problems and their solutions too. The voice of the customer, the employee, the supplier, the competitor, the winds of change….

IV Trust: If you think of it, business and commerce-in fact human civilization-is based on trust : our belief that people will do what they say (and hopefully say what they mean). If this belief gets diluted or compromised, no initiative can deliver its potential. Hence it is critical that leaders are In my experience, the leaders who listened trusted and in turn trust those that "follow" empathetically-not those who pretended to them. Trust ultimately depends on leaders listen-were truly able to create transformational being authentic : thought, speech and action change. The others were great at writing articles are aligned so that people believe that and giving lectures to spell-bound audiences!! leaders will do what they say, that different masks will not be worn for different Of course, the art and power of listening must occasions, that they will Walk the Talk. percolate throughout the organization if its full Mahatma Gandhi was perhaps the most power is to be harnessed. outstanding in this regard, and hence widely VII May a thousand leaders bloom (with regarded as one of the greatest leaders in apologies to Chairman Mao!): Any major modern times. change requires leadership initiatives V Inspire, Especially When There is Failure: (within certain boundaries of course) Every movement goes through its ups and through the length and breadth of downs, and it is precisely when the going is the organization. tough that we need to stand by each other, But it is equally true that in most organizations when leaders need to focus on strengths to these boundaries are much more tightly defined overcome weaknesses, to remind their than they ought to be if the required energy followers "You can do it, I am with you". In and momentum of the change process is to be such situations one would do well to achieved. Clearly the command and control remember Napoleon's statement "Morale is approach needs to be revisited, for the pace and to all other factors as four is to one". Too complexity of change can no longer be managed often have I seen blame-games and witch- by supermen CEO s who know more about hunts bring organizational change to a everything than anyone else. grinding halt, in fact push it back, when the Fortunately, many organizations have realized going is not good. this and I have seen more and more change Tolerating, in fact celebrating, failure (again initiatives being driven by large numbers of within limits) is in fact an important ingredient empowered leaders and teams of both blue and in the samundra manthan of change which white-collar employees -and they inevitably unleashes innovation in organizations, for surpass expectations. Giving up power ends failure often (perhaps always) paves the way up creating much more power! This is going to for success. But it requires the brave, strong and be the Golden Age of the Leader as Mentor, of November

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the gardener who enables a thousand flowers to bloom. VIIINo Gospel Truth : A corollary of distributed leadership and empowered teams, is a culture which encourages relentless questioning of the unquestioned and the unquestionable, without penalizing/killing the brave soul who tells the Emperor that he has no clothes on. This culture which encourages questioning & challenging the status quo, is a powerful complement to listening as a major source of INNOVATION. IX From the Tyranny of either/or, to the Power of AND: Creating synergy out of seemingly conflicting forces and objectives, and the ability to create WIN - WIN situations, have been the hall-mark of the most successful change initiatives I have seen. This is a paradigm shift which will become increasingly important as we move from competition to co-operation, to a world where sustainability becomes a major challenge, and where we face threats to things we have taken for granted and ravaged over the course of civilization: air, earth, water and climate. X The Triumph of Good Over the Perfect: Many change initiatives have floundered because the search for the perfect way forward has led to sacrificing many things that were clearly good and desirable. This led to slow-down and eventual death. On

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the other hand, more often than not, those who dared to take the risk and challenge and moved ahead with initiatives / solutions that were good though not perfect, and learnt along the way, created great successes. These were also organizations which kept it simple and stupid, and unleashed enormous potential from doing so. XI Satya, Prem and Seva : Finally, the organizations which were successful at transformational change seemed to have been powered by the energy of their core values. They firmly believed that success would be an empty and meaningless reward if it were achieved by sacrificing the core values of the organization, and the human beings who were its source. For me personally, I would prefer not to have success if doing so would entail sacrificing: SATYA: Do I speak the truth as I see it, regardless of the consequences? PREM:

Do I have compassion - can I put myself into the shoes of those that I deal with? SEVA: Can I be of service to someone who is in need, especially if he/she is less fortunate than me?

This is a tall order, a formidable XI. Can anyone get it all right? Probably not, but it may be worth trying.

COMMUNICATION EFFECTIVENESS, JUSTICE PERCEPTIONS AND EMPLOYEE COMMITMENT DURING ORGANIZATIONAL CHANGE RANJEET NAMBUDIRI Abstract

This paper examines the relationship between justice perceptions and employee commitment in the context of organizational change. Extant literature reveals that organizational justice perceptions are correlated with employee commitment in a change context. However, the underlying processes governing this relationship have not yet been completely understood and hence a review seems necessary. This paper, which is conceptual in nature, proposes a model linking justice perceptions with employee commitment moderated by organizational and supervisory communication. It is proposed that perceptions of justice would have a positive impact on employee commitment in an organization that is undergoing change intervention. It is suggested that organizational and supervisory communication moderate perceptions of justice to hasten the restoration process of employee commitment in a changing environment. Managerial implications of the review are discussed. Key Words: Communication, organizational justice, employee commitment, and organizational change • Introduction

Ranjeet Nambudiri is an Assistant Professor in OB & HRM, a Fellow in Management from IIM (Ahmedabad). He has presented research papers in several international conferences including the Asian Academy of Management Conference (Shanghai, 2004) and the 3rd Workshop on Trust Within and Between Teams organized by the European Institute of Advanced Studies in Management (Amsterdam, 2005). He has published research papers in several national journals.

'Change' is an extremely significant phenomenon, discussed extensively in the context of organizational action. It is by now very well accepted that most, if not all organizations undergo deliberate transformation during their lifetime. Firms undergo change in an effort to gain more efficiency and competitiveness. These interventions are often undertaken as a response to environmental volatility, desire for enhanced organizational performance, as a problem-solving measure or as strategic decisions. Organizations change to address new challenges, priorities and missions (Cobb et al., 1995). These interventions could take shape either as mergers, downsizing, restructuring, training, technology transformations or implementation of new work-place practices and various other models of change. November

The interventions could be fundamental in nature, thus aimed at effecting radical, long-term and long-lasting change or could be more peripheral aimed at solving an immediate-term problem (Cummings and Worley, 1997:30). Equally well accepted, are propositions, which give evidence pointing to both positive and negative outcomes of organizational change. Change, though initiated with the purpose of bringing about positive outcomes like improved organizational and individual performance, often unwittingly, brings with it negative outcomes like reduced organizational commitment, turnover intent, stress, reduced motivation, dissent and actual employee turnover. Organizational change interventions are posited to have several negative consequences, including but not limited to personal loss, burnout, 2007

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anxiety (Kets De Vries & Balazs, 1997), reduced commitment to the organization (Brockner, Konovsky, Cooper Schneider, Folger, Martin & Bies, 1994) and reduced self-esteem of the survivors (Wiesenfeld, Brockner & Thibault, 2000). It is inevitable that change interventions will cause stress on the targets of change, i.e. the employees (e.g., Wooten & White, 1999) and concerns about the fairness of change processes will naturally be raised time and again. • Conceptual Foundations Theories of Justice The three widely accepted concepts of justice are distributive justice, procedural justice and interactional justice. Organizational justice is the term used to describe the role of fairness in the workplace (Greenberg, 1987). Distributive Justice Change in its basic nature involves a redistribution of resources and power (Cobb et al., 1995). These reallocations are often wide reaching and have the potential to impact a great range of people in the organization. Quite naturally, there are concerns regarding the fairness with which this resource re-allocation is executed. The set of people who have been divested of resources and power would resist the change and are likely to perceive lack of justice. At the same time, those people who have benefited from the reallocation may have experienced similar feelings prior to the reallocation. Hence, the decision-makers always need to bring about the change considering the delicate trade-off involved. Deutsch (1985; in Cobb et al., 1995) has outlined the three criteria of equity, equality and need as means of ensuring distributive justice. The equity criterion proposes that equitable norms based on merit are crucial in creating the perception of distributive justice at the time of allocating rewards or resources. Equality emphasizes that rewards, which are equally distributed, contribute significantly towards perceptions of distributive justice. The criteria

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of need focuses on individual need as a measure of allocating resources. Brockner and colleagues (Brockner, Greenberg, Brockner, Bortz, Davy & Carter, 1986) note that in business organizations, the primary objective is economic productivity and hence equity would be the dominant criterion rather than equality or need. Procedural Justice Thibaut & Walker (1975; in Wooten & White, 1999) have pioneered the research on procedural justice, by focusing on how distributive and other decisions are made. Procedural justice looks at the fairness of the 'procedures' used for decision making. Since change efforts or interventions often have the consequence of increased ambiguity and uncertainty, it becomes natural for concerns about fairness of procedures to be addressed by organizational development research. Procedural justice emphasizes the issues of 'how the ground rules are constructed' (reconstructing) (Folger, 1977), 'who is involved in the rule construction process' (representation) (Leventhal, 1980; in Cobb et al., 1995) and the 'opportunity to voice or redress one's grievances, (recourse) (Sheppard, 1984). These three issues are central to the application of procedural justice to OD research. Brockner and his colleagues (Brockner, Konovsky, Cooper-Schneider, Folger, Martin & Bies, 1994) have based their study examining the justice-commitment relationship on the six dimensions of consistency, suppression of bias, accuracy, representation, ethical standards, recourse, and representation and proposed that advance notice of the layoff to the victims forms an integral part of procedural justice. Interactional Justice Interactional justice is a concept that had emerged fairly recently as compared to the distributive and procedural justice theories. Bies (1987), in one of the pioneering works on

interactional justice focused on the 'social accounts' given by the agents or leaders of the organization while explaining distributive decisions. Hence, this line of thought evaluates the 'reasons' given by management to justify the decision and contribute towards justice perceptions. Greenberg (1987) furthered this argument by stating that 'properly constructed and communicated accounts can help mitigate a wide range of negative attitudes produced by disappointing outcomes.' Interactional justice can be separated into interpersonal and informational components and the interpersonal component is sometimes proposed to be similar to procedural justice (e.g., Viswesvaran & Ones, 2002). It is reasoned that if management is perceived to treat the employees well, it is likely that the employees respond through greater commitment and enhanced performance. Two factors particularly relevant to the interpersonal aspect of interactional justice are, (1) whether the subjects believe that the reasons for the decision were clearly and adequately explained (Bies et al., 1988), and (2) whether the subjects were treated with dignity (Bies et al., 1988). Thus, issues of interactional justice seem specifically relevant in the change context. Organizational Commitment Organizational commitment, was initially proposed by Porter et al. (1974) who noted that organizational commitment was characterized by the following,

withdrawal, absenteeism and intent to leave. • Communication Commitment

and

Employee

Communication processes are an integral part of organizational systems. Organizations, when viewed as 'information processing systems' (Hall, 2001), need to receive, process, analyze, store and transmit information. Organizational communication has been an integral part of organizational theory, since the pioneering work of Barnard (1938). Barnard (1938) has been cited by Hall (2001) as stating, "Communication occupies a central place in organizational theory because structure, extensiveness and scope of the organization are almost entirely determined by communication." Communication processes in organizations are either 'strongly individual or strongly organizational' (Hall, 2001). This article refers to communication as the organizational process of interaction and information processing, including communication by the organization through formal and informal modes and also communication by the supervisor as an organizational agent. This means that organizational communication or communication as referred to here, indicates all those processes, which enable an organization to convey meaning within the organization and to the external environment.

• "definite desire to maintain organizational membership."

In the era of organizational change and interventions like downsizing, corporations have increased dependence on effective communication systems. The knowledge organizations of today are relying enormously on effective internal and external communication processes for improved employee performance and commitment.

Mathieu & Zajac (1990) in their meta-analytic review of organizational commitment have identified antecedents like personality traits, job characteristics, group and leader behavior and consequences like job performance,

Issues of fairness have been addressed extensively by the various theories of justice like distributive justice (Deutsch, 1985; in

• "strong belief and acceptance of the organizational goals and values", • "willingness to exert considerable effort on behalf of the organization", and

• Justice Perceptions and Employee Commitment

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Wooten & White, 1999), procedural justice (Thibaut & Walker, 1975; in Wooten and White, 1999) and interactional justice (Greenberg, 1987; Bies, 1987). Organizational development, or the study of organizational change has explicitly acknowledged the significance of justice in its literature. There is ample evidence that change efforts are fairly successful owing to perceptions of fairness in the intervention (e.g., Cobb et al., 1995). Studies have also shown that different forms of justice are useful in analysis at different stages of the change effort (e.g., Novelli et al.; in Wooten & White, 1999). Distributive, procedural and interactional justice are discussed concurrently with the humanistic orientations that characterize OD practice (Wooten & White, 1999). It has been fairly conclusively proposed that organizational fairness is a "psychological mechanism that can mediate employee resistance to change"(Folger & Skarlicki, 1999).

organizational citizenship behavior (e.g., Cobb et al., 1995). Research evidence shows that communications that "convey causal, ideological, referential and penitential accounts enhance employee perceptions of fairness" of the intervention and contribute to positive work and attitude related outcomes (Cobb et al., 1995). This clearly points towards the moderating role played by communication effectiveness on justice perceptions. There is however, some debate about whether the forms of justice have an additive or interactive effect (Brockner & Wiesenfeld, 1996). To summarize, it can be held that an individual's reaction to organizational resource allocation during a change intervention is dependent on distributive justice, procedural justice and interactional justice which in turn gets affected by the communication effectiveness.

There have been various studies, which have linked organizational justice with change related outcomes like stress, turnover intent, employee turnover, dissent and reduced motivation. Justice perceptions contribute to concerns about the following issues among, both victims and survivors of organizational change, • Legitimacy of the change intervention (Brockner, Grover, Reed, DeWitt & O'Malley, 1987) • Fair and just communication of the change intervention (Bies, 1987) • Decision rule and procedures used to arrive at a layoff decision (Folger & Greenberg, 1985; in Brockner, Grover, Reed, DeWitt and O'Malley, 1987) • Fairness of compensation and severance packages offered (Brockner, Grover, Reed, DeWitt and O'Malley, 1987). Studies have shown that the three forms of justice have a significant influence on employee responses like organizational commitment and

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Figure 1: Proposed Model of Relationship Between Communication Effectiveness, Justice Perceptions and Employee Commitment.

• Implications for Managers Employee commitment during organizational change is one of major concerns for organizations, because it directly affects the organizational performance. Declining commitment often results in turnover and organizations also stand to lose some of their best employees as a result of poorly managed interventions. Given that organizations spend enormous amount of resources in hiring, training and motivating skilled employees, it becomes imperative to ensure that the intervention is implemented with utmost care

and in a manner that is perceived as fair, equitable and just. Communication processes that enhance perceptions of fairness go a long way in ensuring that benefits of the intervention outweigh its negative consequences. The major challenge is to ensure that the employees affected by change perceive fairness in its treatment, in the decision rule used to implement the change and in the rationale behind the exercise. It is evident that employee attitudes like involvement and commitment are the most difficult to recover fully following a change intervention. A logical focus would be the new psychological contract under which the employees and management would operate and ensuring that breach of the previous psychological contract is perceived

as an unavoidable event. The management should try and put in place occupational reinforcements that help the employees to recover faster and leave them with a sense of security. It is suggested that change agents should try to ensure a fair interplay of all the forms of justice while implementing interventions because of the unchallenged impact that all forms of justice have on psychological outcomes like organizational commitment. This of course, is easier said than done, but then the foundations of OD practice rest on humanistic orientations like fairness, ethics and justice and hence the justice framework clearly has a significant role to play in any OD intervention.

References Bies, R.J. (1987). The predicament of injustice: The management of moral outrage. In L.L.Cummings, & B.M. Staw. (Eds.) Research in Organizational Behavior (Vol. 9, pp 289-319), Greenwich. CT : JAI Press. Bies, R.J., Shapiro, D.L., & Cummings, L.L. (1988). Voice and justification: Their influence on procedural fairness judgments. Academy of Management Journal, 31, 676-685. Brockner, J., Greenberg, J., Brockner, A., Bortz, J., Davy, J., & Carter, C. (1986). Layoffs, equity theory, and work performance: Further evidence of the impact of survivor guilt. Academy of Management Journal, 29(2), 373-384. Brockner, J., Grover, S., Reed, T., DeWitt, R., O'Malley, M. (1987). Survivors' reactions to layoffs: We get by with a little help for our friends. Administrative Science Quarterly, 32(4), 526-541. Brockner, J., Konovsky, M., Cooper-Schneider, R., Folger, R., Martin, C., & Bies, R.J. (1994). Interactive effects of procedural justice and outcome negativity on victims and survivors of job loss. Academy of Management Journal, 37(2), 397-409. Brockner, J.,& Wiesenfeld, B. (1996). An integrative framework for explaining reactions to decisions: Interactive effects of outcomes and procedures. Psychological Bulletin, 120, 189-208. Cobb, A.T., Wooten, K.C., & Folger, R. (1995). Justice in the making: Toward understanding the theory and practice of justice in organizational change and development, Research in Organizational Change and Development ,(Vol. 8, pp 243-295), Greenwich, CT: JAI Press. Cummings, T. & Worley, C. (1997). Organizational Development and Change, Singapore: Thomson South-Western. Folger, R. (1977). Distributive and Procedural Justice: Combine impact of voice and improvement on experienced inequity. Journal of Personality and Social Psychology, 35, 108-119. Folger, R. & Skarlicki, D. (1999). Unfairness and resistance to change: Hardship as mistreatment, Journal of Organizational Change Management, 12(1), 35 Greenberg, J. (1987). A Taxonomy of organizational justice theories. Academy of Management Review, 12(1), 9-22. Hall, R. (2001).Organizations: Structures, processes and outcomes. Indian edition: Pearson education Inc., 2001. Kets De Vries, M.F.R., & Balazs, K. (1997). The downside of downsizing. Human Relations, 50, 11-50. Mathieu, J.E., & Zajac, D.M. (1990). A review and a meta-analysis of the antecedents, correlates, and consequences of organizational commitment. Psychological Bulletin, 108, 171-194. Porter, L.W., Steers, R., Mowday, R., & Boulian, P.V. (1974). Organizational commitment, job satisfaction and turnover among psychiatric technicians. Journal of Applied Psychology, 59, 603-609. Sheppard, B.H. (1984). Third party conflict interventions: A procedural framework. In B.M. Staw, & L.L. Cummings, (Eds.), Research in Organizational Behavior, (Vol. 6, pp 141-190), Greenwich, CT: JAI Press. Viswervaran, C., & Ones, D.S. (2002). Examining the construct of organizational justice: A meta-analytic evaluation of relations with work attitudes and behaviors. Journal of Business Ethics, 38, 193-203. Wiesenfeld, B.M., Brockner, J., & Thibault, V. (2000). Procedural fairness, managers' self-esteem, and managerial behaviors following a layoff. Organizational Behavior and Human Decision Processes, 83(1), 1-32. Wooten, K.C., & White. L.P. (1999). Linking OD's philosophy with justice theory : post-modern implications. Journal of Organizational Change Management, 12(1), 7-20. November

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MANAGING PEOPLE IN MERGERS AND ACQUISITIONS D PRASANTH NAIR Abstract

Mergers and acquisitions, as a form of Corporate restructuring, are a common feature of the global business scenario, especially since the 1990's, driven by the changing business dynamics. One key factor in ensuring success in the context of merger is the ability to integrate the organizations effectively. The management mantra for mergers and acquisitions, more often than not, has been 'make them like us'; an approach which research and practice, have indicated is not the best. Given the fact that the critical managerial challenge is to manage the 'People and Organizational issues' to deliver value in line with the strategic objectives for the merger, the paper seeks to understand the different approaches to Integration, factoring in the strategic and organizational variables. The paper also recommends proactive managerial actions to manage the employee reactions and create an environment to facilitate integration. This paper seeks to establish that the success, which is meeting the strategic and financial objectives set forth, depends upon the ability of management to identify and foresee key issues and problems that come up and evolve a plan, driven by the strategic objectives and factoring in the context, realities and issues with respect to both, organization and people.

Context:

Prasanth Nair is a Fellow of the Indian Institute of Management, Ahmedabad. His dissertation was on The Organizational and Human Issues in Mergers and Acquisitions. Prasanth started his career in the engineering field with GEC Alsthom India Limited. After his Fellowship, he worked in HR function at different levels in the RPG Group and Wockhardt. Currently, he is President and Head-Human Resources for Thomas Cook India Limited.

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Mergers and acquisitions, as a form of Corporate Restructuring, are a common feature of the global business scenario, especially since the 1990's, driven by the changing business dynamics. Mergers and acquisitions (M&A) worldwide are expected to set an all-time record of more than $3.57 trillion before this year ends and the Asian M&A market saw about 5200 deals worth $200 billion by September 2007. Interestingly, while M&A is dominated by strategic, financial and operational concerns and perspectives, research conducted across the globe aimed at analyzing the true benefits has indicated that 50% to 70% of M&A's are financial failures, and one of the main reasons for the failure are people and organizational issues. Given the criticality of this dimension, this paper will focus on:

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• The Human Issues in a M&A context • Managing 'Organization and People' Issues in the Context of M&A. The Human Issues in an M&A Context Given the fact that an important variable that contributes to success in mergers have been identified as the 'People and Organizational' issues, it will be important to understand the dynamics underlying the variable. A merger is more than just an act of bringing two different companies together like pair of boxes and many a time, in the pre-merger periods, dominated by financial analysis, the myopic focus stays limited to that. Notwithstanding the importance of strategic, financial and operational analysis, the fact is that the essence of an organization is its employees and

the merger, in whichever form has an impact on them and thus, the 'People and Organizational Issues' need to be factored in and addressed in the context of merger. The dynamics involved in the merger process gives rise to different kinds of uncertainties in the merger processes. Previous research has shown that employees react unfavorably to mergers and acquisitions. There are two conditions that generate deprivation: discrepancy between actual and desired outcomes and a discrepancy between actual and deserved outcomes. An organization transformation process like merger could affect the desired and deserved outcomes and impact the actual; thus increasing the perception of discrepancy. This could result in a feeling of deprivation, leading to adverse reactions (Buono and Bowditch, 1989). It has been argued that the individual responses in a merger or acquisition process are part of a fairly predictable syndrome of merger related stress and tensions. Again, human responses arise from four factors: 1. Culture clashes that arise when dissimilar cultures come into contact with each other. The merger or acquisition requires members of one organization to interact with members of the other organizations with different cultures, behaviors, ideas, manners and working styles. Cultural differences between merging organizations influences the extent of employees participation and the creation of an atmosphere supporting capability transfer. 2. Further, separate from cultural differences, there exists an intense feeling of "we versus they" resulting in distrust, tension and hostility towards the other. It has been sufficiently documented that there exists a strong 'We versus They' feeling even in cases where perceived cultural differences were not very large.

3. Uncertainty associated with Process: Uncertainty, as a reaction, is caused when there is lack of understanding about the causal relationships between the actions and the potential outcomes of those actions. Since the process of Merger and the changes it brings forth are evolutionary and the final outcomes are not known during the pre-merger and through merger period, it creates uncertainty and ambiguity in individuals, along personal, professional and organizational dimensions. Uncertainty, in context of merger leads to dysfunctional outcomes like stress, lowered job satisfaction, distrust and decline in commitment, affecting job performance. 4. Anxieties on account of the effect or perceived effect it has on career plans through transfers, job loss, relocation, loss of individual influence and the uncertainties associated with these changes (Buono and Bowditch, 1989; Larrson and Finkelstein,1999). These factors, as mentioned earlier, give rise to negative reactions in individuals--often manifesting itself in active opposition (e.g. voice, voluntary exits and sabotage) and passive opposition (e.g. absenteeism, disobedience), -- reducing their commitment to successful integration of the organizations and the extent to which they are willing to cooperate with the members of the other organization (Weber et al, 1996). As such, the negative human responses do have an adverse effect on the individual performance and effectiveness; in the long term having an affect on the organizational effectiveness. Managing 'Organization and People Issues' in the Context of M&A Given the fact that mergers and acquisitions would continue and there are bound to be negative reactions from individuals in the context of merger, the critical element is what November

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can be done, to manage these, so as to effect a smooth transition and deliver value in line with the strategic objectives for the merger. The success, which is meeting the strategic and financial objectives set forth, depends upon the ability of management to identify and foresee key issues and problems that come up and evolve a plan, driven by the objectives and factoring in the context, realities and issues with respect to both, organization and people. This paper attempts to understand the process by which the People and Organizational issues can be managed in the context of Merger. This is done through: • Understanding the Variables which will Determine the Integration Plan. • Studying the different Approaches of the Integration Plan. • Key Actions in the Integration Plan. Understanding the Variables Which Will Determine the Integration Plan: The management mantra for mergers and acquisitions, more often than not, has been 'make them like us', depending on the power equations based on the nature of deal. Research and practice, have indicated that this is perhaps not the best approach to management of a merger and point to the consideration of additional criteria for deciding on the extent of change required, depending on the mode of value accrual. The value accrual in the context of merger would be through either Resource Sharing, Skill Transfer and Combination Benefits, or a combination of these. Given that fact, in a pioneering research, Haspeslagh and Jemison (Haspeslagh and Jemison, 1991) have stated that the integration plan to be adopted should be based on two additional criteria: • Need for Strategic Interdependence - This relates to the degree of strategic interdependence that needs to be established between the two companies. This is drawn from the strategic objective of the merger, which spells out the mode of

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value accrual. For example, for value creation through Resource sharing and skills transfer, a high-to- moderate strategic interdependence may be required, while for value creation through combination benefits, the strategic interdependence required may be low. • Need for Organizational Autonomy - This relates to the extent to which it is necessary to maintain the autonomy of the company in order to preserve its distinctive skills. The extent of Organizational Autonomy would relate to both, the need from a business strategy and need from an organizational point. Studying the Different Approaches of the Integration Plan The consideration of these characteristics will enable the choice of an appropriate Integration Plan. The integration plan, will determine the extent of changes in either one or both the organizations, which in turn, will need to be factored in, the roll out of Key actions. Even though both these variables exist on a continuum and plotting them would require data collection and analysis, for the purpose of having a better understanding of the process, both these variables have been shown as 'high' and 'low'. Figure 1 illustrates the context, taking into account the two variables and suggests an approach in each context (Haspeslagh and Jemison, 1991). Need for Organizational Autonomy

Low

Holding

Absorption

Low

High

Need for Strategic Interdependence Acquisition Integration Approaches (Haspeslagh and Jemison, 1991)

• Symbiosis: A scenario, where the strategic interdependence required for value creation

is high, implying that there would need to be changes done; but at the same time, the need for autonomy, from an organizational point, is also high. The approach is to balance the need for driving the extent of changes, while preserving the need for autonomy. This is a challenging scenario and the process takes time. • Preservation: In this scenario, the need for strategic interdependence is low, implying that the changes are not really required for value creation. In fact, conferring a high degree of autonomy to nurture and keep the source of value creation intact, leads to value creation. A high degree of autonomy is granted for enabling the same. • Absorption: In this scenario, the need for strategic interdependence is high, implying that there need to be changes made for value creation. At the same time, the need to preserve the boundary or identity of the organization is low. The suggested approach is to fully consolidate the organizations with the ultimate aim of dissolving all boundaries. • Holding: Here, the need for strategic interdependence being low and need for preserving the autonomy is also low. But, as the changes need not be made and value creation is possible without that, the suggested approach is to have a holding structure. The integration approach would influence the extent of change in Organizational identity, the Business model adopted, the Structure (which will include roles and reporting relationships), the Work Processes and the Human Resources Policies. As discussed in the first section, each of them, depending on the extent of change would have an impact on the people. Based on the Integration approach adopted, the magnitude of impact would vary. The Integration approach would also determine whether people in both organizations would get affected or whether the negative emotions are limited to one organization.

In order to manage the employee reaction and enable a smooth transition, towards meeting the strategic objectives, it is necessary to have a focused Integration Plan. While the details of the plan would depend on the approach adopted and the context of the merger, there are certain necessary actions that need to be incorporated in the plan, which will be discussed in the next section. Key Actions in the Integration Plan Given that, there will be negative reactions in the context of merger and it is necessary to manage them in order to meet the strategic objectives, it is critical to have a focused plan for Integration. As mentioned above, while the details of the plan would depend on the approach adopted and the context of the merger, there are certain key actions, as identified by research and observed from practice, evolved into a 4C model, that are recommended as part of the Integration plan for creating an environment to facilitate value accrual. The 4C's are: • Contingency Analysis and Planning • Communication • Co-Opt • Collaborate • Contingency Analysis and Planning: In many a case, the integration proceeds with focus on issues that come up and on a dayto-day time line. It is quite clearly a recipe for failure. An important step towards successful integration is to have a plan in line with the Integration approach. The larger plan would then need to drill down with a focus on micro issues. In a context, where a lot of variables are fluid, there might be unexpected situations and hence there is a need for contingency planning for a worst case scenario from both a business and organizational viewpoints. • Communication: Mergers and acquisitions place new demands and pressures on the

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communication process because of the insecurity and uncertainties associated with the combination process. There are two basic types of communication that should be included - first, to keep the organization members informed about the merger, its implications, and its implementation and secondly, to facilitate the work getting done. In the context of merger, there can be no 'over communication' - people would welcome communication. Employees are more likely to react positively when they are well informed about the positive aspects as well as the negative aspects than when they are forced to rely on hearsay and speculation. Also, it is not only important what is communicated, but also how it is communicated. For communication to be effective, it needs to be seen as credible. The information should be released in an honest, open and timely manner and there should not be attempts to distort the truth and manipulate people. • Co-Opt: For a smooth transition to happen, there should be an attempt to involve individuals from both the organizations at various levels. Setting up of integration teams, or teams focused on projects, crossfunctional challenges can be used as mechanisms for driving this. Integration teams have been found to be a very effective mechanism to share information, sort out operational issues and facilitate execution of the Integration plan. Moreover, the teams can serve as conduits of accurate information and be identified as sources that employees can turn to. They help the members to know each other; which help resolve much of the "we-they" attitude that inhibits the integration process. The greater the number of shared experiences that can be produced early on in the process, the faster a set of symbols and shared meanings will develop with which organizational members begin to identify, which will facilitate the integration process. • Collaborate: It is important for a successful

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transition that the organizations start working together and build a culture of collaboration and trust. In the context of merger, there might arise, a natural reluctance to work together. Hence, platforms and triggers need to be put in place to enable cooperation. Co-opt is a powerful mechanism to build trust and facilitate collaboration. In addition to it, sending the 'Right Signals' help in this process. Right signals, which appeal to common values of fairness, respect, care and reciprocity, serve to break down cultural barriers and lead to mutual development and implementation of a common organizational purpose. Another step in this direction is the need to enhance reciprocal organizational understanding. This will enable the organizations to work on knowledge and skill transfer, both of which will directly impact the value creation process. The intensity and magnitude associated with each of the Key Actions will depend and vary, based on the Integration Plan adopted and the context of the Organization(s). The details - like when, who, what and how - also need to be finalized after factoring in the context. It must be kept in mind that the 4C's are merely the starting steps in the Integration plan, which would need to address, along with the macro issues, the issues at the micro level. At the same time, the Key Actions (4C's) enable creation of an environment for successful execution of the Integration Plan. Conclusions: • Studies have shown the failure rates in mergers at 50 percent and one key reason is the failure to manage people and organizational issues that arise, in the context of merger. • The dynamics involved in the merger process lead to employees reacting unfavorably to mergers. This could be due to culture differences or uncertainty associated with the process or anxieties on account of the impact on role; or a combination of these.

• Successful integration approach needs to factor in the business objectives and the organizational context. The variables that need to be taken into account for determination of the approach to Integration are 'Need for Strategic Interdependence' and 'Need for Organizational Autonomy'. Further, drawing upon research studies which, based on the mutual relationship between these variables, there are broadly, four approaches to Integration: Symbiosis, Preservation, Absorption and Holding. • In the context of merger, irrespective of the Integration approach adopted, there arises unfavorable reaction from employees - the difference being in the magnitude and whether it is across one or both the organizations. The paper recommends 4Cs

(Contingency Planning, Communication, Co-opt and Collaboration) as the Key Actions in the Integration Plan. Based on the approach towards Integration and the context of the merger, the intensity and the modus operandi of each of the Key Action would vary. • It must be remembered that managing a merger process is sensitive and to be successful, it needs to factor in the human and emotional element. As leading researchers in this area, Buono and Bowditch puts in perspective, "If mergers and acquisitions are to be successful over the long term, the basic nature of such change as a human process...must be acknowledged, understood, and integrated into the planning process."

References • Ashford, S.J, C. Lee and P. Bobko (1989) : “Content, causes and consequences of job insecurity: A theory based measure and substantive test”; Academy of Management Journal , (32), 803-829.

• Bastein, D.T. (1987): “Common patterns of behavior and communication in corporate mergers and acquisitions”, Human resource Management, 26(1), 17-34.

• Blake, R.R. and J.S. Mouton (1985) : “How to achieve integration on the human side of the merger”, Organizational Dynamics, 13(3), 41-56. • Bowditch, J.L. and A.F. Buono (1982): Quality of work life assessment, A survey based approach, Boston, Aurburn House. • Bowditch, J.L. and A.F.Buono ( 1987): Great expectations: when the hopes for a better life following a merger turn sour, National Academy of Management, New Orleans.

• Buono, A.F. and J. L. Bowditch (1989): The human side of mergers and acquisition, Josey-Bass, San Francisco, CA. • Chaterjee, S., M.H.Lubatkin, D.M.Schweiger and Y. Weber (1992): “Cultural differences and shareholder value in related mergers : Linking equity and • • • • • • • •

human capital”, Strategic Management Journal, 13(5), 319-334. Haspeslagh P.C. and D.B. Jemison (1987): “Acquisitions- myths and reality”, Sloan Management Review, 28(2), 53-58. Haspeslagh P.C. and D.B. Jemison (1991): Managing Acquisitions : Creating Value through Corporate Renewal, Free Press,New York. Jemison, D.B. and S.B. Sitkin (1986): “Corporate acquisitions : A process perspective”, Academy of Management Review, 11(1), 145-163. Larrson, R. and S. Finkelstein (1999): “Integrating Strategic, Organizational and human resource perspectives on Mergers and Acquisitions’: A case survey of Synergy realization”; Organizational Science; 10(1); 1-26. Marks, M.L. and P.H Mirvis (1986): “The merger syndrome”, Psychology today, October; 36-42. Nahavandi, A. and A. Malekzadeh (1988): “Acculturation in Mergers and Acquisitions”, Academy of Management Review, 13(1), 79-90. Schweiger, D.M. and A.S.DeNisi (1987): “The effect of realistic merger preview on employees : A longitudinal field experiment”, National Academy of Management meeting, New Orleans. Weber, Y., O. Shekar and A. Raveh (1996) : “National and corporate culture fit in Mergers / Acquisitions : An exploratory Study”, Management Science; 42(8); Aug 1996; 1215-1227.

WEBSITES

• John McGee/Blackwell Encyclopedia of Management: Strategic Management – Website retrieved on 21st Oct’07 at http:// • • •

www.blackwellpublishing.com/content/BPL_Images/Content_store/Sample_chapter/9781405118286/ McGee_sample%20chapter_Blackwell%20Encyclopedia%20of%20Management%20Stategic%20Management.pdf Acquisition Integration Approaches: Website retrieved on 27th Oct’07 at http://www.12manage.com/ methods_haspeslagh_acquisition_integration_approaches.html M&A Deal Tracker: Website retrieved on 25th Sept 2007 at http://bw.businessworld.in/html_uploads/Deal_Tracker.html# Corporate India goes shopping — And lands smart deals on foreign shores, Website Retrieved on 25th Sept 2007 at http:// www.thehindubusinessline.com/iw/2007/01/14/stories/2007011400170700.htm

Endnotes 1 For the purpose of this paper, the terms “merger” and “acquisition” would not be differentiated. The term ‘merger’ would denote ‘Merger and Acquisition’. Research has indicated that such combinations are homogeneous in nature and typically have same repercussions on the firms and their human resources (Buono and Bowditch, 1989).

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HR: AN EVOLVING FUNCTION D HARISH Abstract

This article explores the changing role of HR as a function and HR practitioners as professionals. With the changing business and organizational context, HR as a profession is evolving and is strategic partner in many of the long term interventions. Action that is reactive to the context is natural but a conscious professional evolution that can enable the function to be prepared with capability to cope with changes of strategic nature is the key.

Introduction:

Harish is Vice-President HR Services, Unilever (Asia, Australia, Africa). He is an alumnus of XLRI, Jamshedpur. He has 22 years of corporate experience across India and UK, mostly in Hindustan Unilever where his last assignment was VicePresident - HR. Harish was recognised with "Exemplary Leader Award" for Excellence in HR both at the regional and national levels as part of Employer Branding Awards 2007.

HR as a profession has evolved over the years. It has in many ways responded to the changing context and demands. It has come to be recognised as an integral part of business. In some organizations it has even gained a place of pride and recognized as a function of strategic value. Currently, the business scenario is fast changing and we are witnessing a number of new horizon sectors coming into being. In these times of fast-paced change and short-cycle reviews there is a mad rush to get into an action mode. I recognise many HR practitioners caught in that fastaction syndrome. In spite of fast changing business context I find many similarities in the focus of HR response in the past and in the present. The following is an exploration of the HR function's evolution to understand the apparent paradox and determine ways going forward. Looking Back: Many years ago the HR professional existed only in the context of a factory environment. In this scenario he was expected to be the conscience keeper of the

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management with respect to all labor related issues. He was expected to balance the pulls and pressures between management and labor. He was expected to ensure that the employees were treated fairly and the management got the best out of its labor without unduly exploiting them. It was clearly an imbalanced relationship with far greater power vested in the management hands and hence the strong possibility of management not being responsive to the genuine needs of the labour. It was to guard against such a scenario that the government regulators envisaged the need for the position of the labour welfare officer which is the earliest "avatar" of the HR professional. With the advent of the trade-union movement the role of safeguarding the interests of labor was assumed by the communist ideology touting labour leaders. The HR professional now had to "rebalance" the equilibrium between management and labor (with labor taking quite an aggressive posture with the support of trade union organizations). From a predominantly labor welfare orientation he had to assume the role of an arbitrator between

management and the labor leaders to ensure that the labour leaders do not start abusing their new found power. Quite often this also entailed the HR professional to wield the stick to enforce discipline at the workplace. This often resulted in his being viewed as biased towards management. The fact that the HR person was in the payroll of the company definitely added to the dilution of the perception regarding the neutrality of his stance. In an attempt to wean away the employees from the clutches of the trade unions the management charged the HR professional with the task of introducing newer and more appealing activities/benefits to keep the employees motivated and focussed. Over a period of time the various HR activities that were initiated called for a large amount of administrative focus in managing them efficiently. This then started taking centre stage in the life of the HR professional. With growing competition in the market place and easy access to technology and finance the business leaders started realising the importance of the People edge to business success and started expecting the HR professional to focus on attracting the right quality people and developing the appropriate skills amongst the existing people. The growing interest in training and development, learning center, quality circles are outcomes of this phase. The realization that the workplace culture impacts almost all of the people issues has started to bring attention to both the tangibles and intangibles, the hardware and the software, the furniture and the philosophy, the work and the values, the rewards and the recognition. Today there are many examples of Culture related work and thanks to involvement of experienced OD practitioners/ consultants these are no longer isolated initiatives but more comprehensive in their approach, leveraging all aspects of HR. TPM,

open offices, vision workshops, instant and visible recognition schemes, objective performance management process and performance linked rewards. Many of the leading thinkers and writers in the area of HR have exhorted the need to get more strategic in our approach and one of the key levers of Strategic HR is leadership. The high impact of Leadership on talent management, organization culture, and eventual business performance has clearly shifted the focus on developing leadership capabilities within the organization as a key enabler of success. A large number of HR professionals have begun to discuss leadership development and some have indeed started to influence and contribute to development of leadership within their organizations. As the HR professional found the demands on his contribution changing he sought to build his own capability to meet the changing demands. Therefore from the stage of becoming familiar with the regulatory guidelines to be able to provide all facilities that were expected at the place of work he moved to building his capability to negotiate successfully with the trade union leaders. He also had to develop his knowledge of the jurisprudence so that he could enforce discipline within the bounds of law. He then started becoming creative in the design of benefits and provision of facilities which made the employees happy and motivated. The big step was in understanding of human psychology so that she could predict the effect of her initiatives and activities on people and their consequent behavior. (please note that shift in the gender of the HR professional at this stage of evolution! ). More recently the understanding of business and ability to contribute more directly to business performance has become key to being more strategic in their approach. Looking Ahead In many of the organizations belonging to the new horizon segment the HR practice is being November

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dictated by the "fires of the moment". The most daunting challenge seems to be one regarding Talent retention. This seems to have therefore triggered a series of response around making employees happy in their current company. The provision of pick up and drop, frequent social gatherings, birthday celebrations, gift vouchers and dinner coupons etc. are targeted at keeping the employee contended and not think of a change. This is in many ways similar to the efforts to keep them away from unions. Reflecting on the past we know that, however creative one may be, these activities provide only a short term solution to the challenge. Understanding this, a number of HR professionals have focussed on value adding training programs which has a slightly longer term benefit both to the employee and the organization. A few of the enlightened HR leaders have adopted a comprehensive approach and their response reflects a deep understanding of the HR functions evolution in the traditional sectors. They are not just responding to the immediate demand but initiating efforts which are more broad-based in nature and addressing longer-term needs. Unlike other professions like accounting and medicine where the professional regulatory bodies are keeping track of the learnings from recent developments and insisting that their professional members comply with emerging standards, there is no mandatory adoption of new frameworks and practices in HR. It is usually left to the initiative of the practitioners to update themselves and follow what they deem appropriate. This is a pity, for many HR professionals are failing to see the opportunities and lessons. Beware of employee backlash if you do not listen to their intrinsic professional aspirations. The way in which they will assert themselves may not necessarily be through trade unions but maybe through heightened attrition and blog campaigns. This could be more lethal than the historical "gherao" or strike.

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A study of history often helps one to prepare for the future, for there is no doubt that history repeats itself. However, it is in your hands to write the history of tomorrow by doing things ahead of its time and hence address some of the needs before they become a Herculean challenge. For example, you can work on leadership development and organization culture even as you grapple with the talent attraction / retention challenge and this will help your business unit skip a few of the evolutionary (and painful) steps and catapult into the realm of outstanding business performance. Of course in keeping with the times we need to update ourselves with the possibility of technology leverage for various HR deliverables. The novel initiatives of job fairs, campus presentations and employee referrals have started gaining wider currency. With global knowledge being accessible more easily we need to adopt/adapt various experiences in the area of people performance. The balanced score-card approach and the strategy into action model are accessible to all for improved business alignment. The use of online surveys and instruments has made our feedback information, people and team assessment easier and more robust. These should enable us to address the issues in a faster and better way. Thankfully HR is an evolved function and we must recognise that. We need to learn from the experiences of the past and incorporate it into our functional knowledge base so that we perform as an improved version of our functional forefathers. Failing to capitalise on that is purely our loss and we will be painfully driving our organizations to learn through first hand struggle. In today's' highly competitive environment it is unforgivable fool-hardiness. No doubt the future will bring with it newer challenges and opportunities which will demand and provide for further evolution of the HR professional.

ONE REASON FOR FAILURE OF CHANGE INTERVENTIONS PVR MURTHY On a lot of occasions, change initiatives misfire, ventures and projects go haywire due to a phenomenon called mismanaged agreement (also known as "the Abilene Paradox"). Many years ago Professor Jerry B. Harvey discovered that the fundamental problem of contemporary organizations is the inability to cope with agreement--not conflict. He finds that most agreement in organizations is actually false consensus. It occurs because many people feel they might be isolated, censured or ridiculed if they voice objections. When members do not share their feelings and opinions in an authentic manner, groups end up working towards inappropriate goals leading to organizational failure. The Abilene Paradox is a paradox in which a group of people collectively decide on a course of action that is counter to the preferences of any of the individuals in the group. It involves a common breakdown of group communication in which each member mistakenly believes that their own preferences are counter to the group's and do not raise objections. Jerry B. Harvey coined this term. The name of the phenomenon comes from an anecdote narrated by Harvey to elucidate the paradox:. "On a hot afternoon visiting in Coleman, Texas, the family is comfortably playing dominoes on a porch, until the father-in-law suggests that they take a trip to Abilene [53 miles north] for dinner. The wife says, "Sounds like a great idea." The husband, despite having reservations because the drive is long and hot, thinks that his preferences must be out-of-step with the group and says, "Sounds good to me. I just hope your mother wants to go." The mother-in-law then says, "Of course I want to go. I haven't been to Abilene in a long time."

The drive is hot, dusty, and long. When they arrive at the cafeteria, the food is as bad. They arrive back home four hours later, exhausted. One of them dishonestly says, "It was a great trip, wasn't it." The mother-in-law says that, actually, she would rather have stayed home, but went along since the other three were so enthusiastic. The husband says, "I wasn't delighted to be doing what we were doing. I only went to satisfy the rest of you." The wife says, "I just went along to keep you happy. I would have had to be crazy to want to go out in the heat like that." The father-in-law then says that he only suggested it because he thought the others might be bored. The group sits back, perplexed that they together decided to take a trip which none of them wanted. They each would have preferred to sit comfortably, but did not admit to it when they still had time to enjoy the afternoon." The phenomenon may be a form of group think. It is easily explained by social psychology theories of social conformity and social cognition which suggest that human beings are often very averse to acting contrary to the trend of the group. Likewise, it can be observed in psychology that indirect cues and hidden motives often lie behind peoples' statements and acts, frequently because social disincentives discourage individuals from openly voicing their feelings or pursuing their desires. This anecdote was also made into a short film for management education. The theory is often used to help explain extremely poor business decisions, especially notions of the superiority of "rule by committee." A technique mentioned in the study and/or training of management, as well as practical guidance by consultants, November

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is that group members, when the time comes for a group to make decisions, should ask each other, "Are we going to Abilene?" to determine whether their decision is legitimately desired by the group's members or merely a result of this kind of group think. The "Abilene Paradox" is related to the concept of group think in that both theories appear to explain the observed behaviour of groups in social contexts. The crux of the theory is that groups have just as many problems managing their agreements as they do their disagreements. This observation rings true

among many researchers in the Social sciences and tends to reinforce other theories of individual and group behaviour. Researchers in this field have proposed various means by which groups can avoid such dysfunctional behaviour. None have proven more effective than the inclusion of people with diverse backgrounds in the decision-making process. Groups so comprised tend to be more effective in avoiding the Abilene Paradox and tend to be able to make much better decisions overall. From Wikipedia, the free encyclopedia

References • • •

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Harvey, Jerry B. (Summer 1974). “The Abilene Paradox and other Meditations on Management”. Organizational Dynamics, 3 (1). Harvey, Jerry B. (1988). The Abilene Paradox and Other Meditations on Management. Lexington, Mass: Lexington Books. Harvey, Jerry B. (1999). How Come Every Time Get Stabbed In The Back, My Fingerprints Are on The Knife?. San Francisco: Jossey-Bass. http://www.abilineparadox.com/ November

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IPO: A POWERFUL INTERVENTION IN ORGANIZATIONAL CHANGE RAVI VIRMANI Abstract

Transformation from a privately owned company to a public company through IPO involves a number of Changes while planning and executing IPO. Living up to the expectations and demands of stakeholders itself forces organizations to bring in changes effectively.

"IPO, is a process not an end game. After the IPO, and organization must meet the operational requirements of a public company while delivering the value it has promised its stockholders." Ravi Virmani is a management consultant with over 20 years of consulting experience. He is the co-founder of Noble & Hewitt in India. Currently based in Singapore, he is the CEO of Trust Associates Pte. Ltd.

The IPO has too often been seen only in terms of an intense transaction that begins with the selection of investment bankers and the drafting of a prospectus, continues with road shows, and ends with the first day of trading. But it does not stop there. After the IPO the organization must meet the operational requirements of a public company while delivering the value it has promised its stockholders. But it does not start there either. Research shows that CEO's of the most successful companies (in terms of post IPO performance) began transforming their company strategically, operationally and financially in a process that sometimes began years before they went public. Improvement initiatives in the area of strategic planning process, accounting and reporting systems, investor relations, and employee incentive compensation, were identified as contribution most to the most to post-offering performance.

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Beyond Financials A recent research, surveyed portfolio managers to gain insights into the key financial and nonfinancial metrics they use when making a buy or sell decision. Not surprisingly, the research shows that superior financial performance measured against comparable companies is paramount. More surprisingly, though, the research showed that non-financial measures accounted for 40% of a portfolio manager's decision making. The key non financial metrics: • Quality of management • Innovation • Ability to attract and retain talented people • Management credibility and brand image. These findings underscore that value is often found off the balance sheet. Which is why Company Executives who wants to realize the greatest value at the IPO and in the public markets must understand, manage, and communicate the non-financial metrics for their company. Management Pressures The main paradigm shift is that the CEO and the team are no longer 2007

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working only for the promoter or a promoter staffed board. The Board composition and its activist role poses a challenge to the Management team - initial response is that of 'being out of the comfort zone' - denial - and then acceptance of the fact that we too can be challenged, questioned and at times be refused the permission 'to do so '. This transition process in turn has implications on the company culture, practices, and past historic beliefs in the organization. For the first time, perhaps, insiders face bringing new players into what has been, in essence, a private party, diluting their ownership interest and losing at least a measure of control over the direction that the corporation ultimately takes. Public scrutiny resulting from disclosure of a company's operations may be painful enough to a formerly private corporation, but actually letting a large number of "outsiders" have a voice in corporate governance is an entirely different matter to a management team not accustomed to shareholder oversight. In addition, as the officers of a newly-public company quickly learn, the company's new owners will expect a certain return on their investment, subjecting management to performance pressures it may have never before experienced. Substantial time and effort, and thus dollars, must be expended in dealing with the investing community in order to ensure that investors and analysts remain satisfied with the company's performance over the short term, while at all times keeping in mind, and working towards, management's long term goals for the company. Finally, fiduciary obligations with respect to minority ownership interests have been expanded by the courts in recent years and cannot be taken lightly when planning to let others into a previously closed circle of ownership. The other aspect that becomes critical post an organization going public, is the need for good corporate governance practices. The

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requirement would be for a Board of Directors that is independent has high levels of financial expertise and one that follows and operates in a Committee Structure. The pressures felt at the leadership levels have a widespread impact in terms of expectations from others within the organization. The impact is widespread and felt on aspects such as: • • • • • • • •

Investment decisions Business planning Cost reviews Hiring of senior talent Succession planning Accountability Outcome orientation Incentive compensation

Managing Employee Expectations If not managed well, the employee perception is that the Culture has changed for the worse, and motivational levels take a turn towards south. Decisions are then 'interpreted' as harsh. Even though the decision is not a tough one, and would have been taken in a similar manner 'earlier too' but now its perception changes dramatically. The level of review and challenge becomes relatively more in-depth - that's for sure, how much more in-depth will be relative in each instance. Organization's need to come to terms with a period of intense change initially and then Change becomes a Constant! because the fundamental shift is that the investors expect extraordinary returns . This over-arching expectation ushers in a 'hardening' impact on work culture. And the fun things begin to disappear in the wake of this Investor expectation. Missing forecasts, and missing budgets now have far reaching implications. Earlier the promoter Board in its more 'acceptable response will' now behave very differently in terms of missing forecast, falling share price, and business projections.

In expectation of such a reaction, rightly or otherwise, management teams and their CEO begin to take very business focused, hard numbers and 'no nonsense' approach. This invariably, would work at max, as a short term remedy. Organizations undergoing the IPO journey must, must accept two maxims Maxim 1. Culture will Change Maxim 2. Performance Enhancement The sooner these are internalized and accepted, the less the transition period for the Organization and greater will be the focus on creating shareholder value. No matter how much Google founders claim that the fun culture will not change, Several recent IPO organizations have proved that a dramatic change in culture does happen. Acceptance of the above two maxims provides an opportunity to pro-actively redefine the culture, retain the fun stuff, retain the heritage if feasible and prepare the organization and employees for what's the new landscape, what will be different, how dynamic will the performance expectation be, what additional resources and infrastructure will be made available and how the concept of accountability and incentive compensation will look like. The erstwhile paradigm of success and career growth will now have a new meaning and a combination of these changes emerges the new 'avtaar '. A visionary CEO can use it to his advantage and provide the leadership to steward the Ship through the 'perceived' turbulent waters to an ocean where the dynamics are not the same as cruising along the River Nile. The dynamics of a result-oriented organization committed to creating shareholder value thus becomes a way of life rather than a maze of ambiguity and "we shall cross that bridge when it comes".

Often an IPO is planned and perceived, as merely a capital-raising exercise for definitive business needs. And apparently it is so, there is no denying the fundamental purpose. However the dilution of ownership, the expectation of institutional investors who in turn have to serve their commitments! And it's this cyclical commitment to capital, which makes your own business relatively smaller than it is. Your business initially is reported 'big' in terms of market capitalization at IPO time, and yet in the cycle of the capital flow which the IPO has now aligned you, your organization is now a part of that capital flow and you have to play your piece in the orchestra. Organizational Readiness eventually happens, and if it more by design in a pre-planned manner then your influence over it is likely to be greater than "as we go along agenda". The management team needs to regroup and complete its process of acceptance and the redefinition of the two maxims. Having then planned a road map, the CEO can decide the pace and timing of communication and execution of Change depending upon his assessment of the organization readiness. Caution has to be exercised so as not to create panic of an oncoming tsunami ! Each CEO in his style and assessment should be able to lay the course, as how will your organizations graduate from one league to another. This obviously requires building the necessary road map and the support systems. In conclusion, the sustainability of success desired by way of IPO is through the nonfinancial metrics and the credibility of the senior management team to execute on it. The IPO journey is a vehicle, which prepares you to leap frog to higher business goals, and in this aspirational evolution, success may be proportional to the level of preparation and execution.

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FROM A SAPLING TO A FOREST: THE SAGA OF THE DEVELOPMENT OF HRM IN INDIA UDAI PAREEK and T.V. RAO

This is a personal account of the change the authors introduced in one organization through evolving, experimenting and implementing HRD, spreading it to other organizations and its diffusion and institutionalization at the national level. While the authors romanced with HRD as a part of change, they developed commitment and became life partners of HRD in India. Both singly, and together, they have been contributing to the development of HRD in India.

Udai Pareek, a Distinguished Professor at the Institute of IHMR, is an internationally acclaimed academician and a living legend in HRD. He is on the Management/Governing Boards of the Academy of HRD, IIHMR, ISABS, JIM and several other organizations. He has authored and edited several books and has contributed a large number of research papers to national and international journals.

The Beginnings In 1973 after joining the Indian Institute of Management, Ahmedabad as the Faculty, Udai worked with late Professor S. K. Bhatacharyya on the problems in Larsen and Toubro subsequent to its reorganization by Professor Bhatacharyya. The main problem was conflict between two independent roles created in the organization (DGM Planning and DGM Operations). While doing role clarification and role negotiation exercises, Udai realized the need of working on the larger issues of development of people. With TV Ra, later joining the Faculty of IIM, Ahmedabad, Udai shared this concern, and both TV and Udai decided to work on designing a new way of developing people in an organization. They made a proposal to the Chairman. Shri N.M. Desai, CEO of L & T, arranged the discussion with the top group, and accepted the proposal to try out the new system of developing people. The authors would like to pay tribute to the foresightedness of Shri N. M. Desai in agreeing to experiment with a new system.

Dr T V Rao is currently Chairman of T V Rao Learning Systems and Chairman of Academy of Human Resources Development, Ahmedabad. He was Professor at the Indian Institute of Management, Ahmedabad, for over 20 years beginning 1973. He has also worked as L&T Professor of HRD at XLRI, Jamshedpur, during 1983-85. Dr. Rao is the Founder President of the National HRD Network and was President of the Indian Society for Applied Behavioral Science (ISABS). Dr. Rao has several publications to his credit.

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L&T Experiment: Its Main Thrust After extensive interviews and discussions (including with A. M. Naik currently the Chairman of L&T who was a Manager at that time) the authors prepared a proposal to introduce what they called human resource development. This was in mid 70's. They had not come across any such term in the western literature, and appropriately thought of re-orienting personnel system from administration to development. A comprehensive NHRD

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system was designed, requiring managers to perform development role through coaching and performance management. Two main features of the proposed concept of HRD were that HRD dealt with all the human units of the organization (from persons to the total organization), and It was value-based. Fortunately,L&T had a very competent personal officer, Dr. Dennyson Pereira, who was excited with doing new experiments. The authors have already published the detailed experience of developing HRD in L & T (Pareek & Rao, 1998). The following 15 principles were shared with the organization as the guiding principles for designing the HR function. • Focus on enabling capacity • Integrating the development of people with Organization Development • Maximizing Individual Autonomy and Growth through increased responsibility • Decentralization through Delegation and Shared Responsibility • Participation Decision-making • Balancing adaptation to and changing organizational culture • Balancing differentiation and integration • Balancing Specialization and Diffusion of the Function • Ensuring Responsibility for the Function • Balancing Linkages within and with other functions • Building Feedback and Reinforcing Mechanisms • Balancing quantification and qualitative decisions • Balancing internal and external help • Planning evaluation of the function • Continuous review and self-renewal

The following 11 systems were reassigned in details: A.

Human Resource Administration

1. Manpower planning 2. Recruitment and placement 3. Performance and potential appraisal 4. Promotion salary administration 5. Staff administration 6. Information and data processing B.

Human Resource Development

Training Organization Development and Research Employee Feedback and counseling Career development and career planning B.

Industrial Relations

Worker Affairs Attention was paid to structure of human resource function. Detailed recommendations were developed for implementation of the system and functions. To help the organization take decision, detailed description of the HR functions was prepared, including critical attributes for each function. These were also done through interviews and discussions. Since the details have been published elsewhere, we are focusing here only on the process of success of the system. The Factors of its Success This was one of the most successful change management, from successful implementation of change to its diffusion and institutionalization at the national level. Several factors contributed to the success of change. Some of these are briefly mentioned below. 1. Committed top: When the proposal was discussed with N.M.Desai, and Holk Larsen both of them showed deep interest in reNovember

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designing the personnel system. L & T was very successful company, and there was no apparent reason for it to think of new system. But foresighted as the top management was, they welcome the idea of giving a lead in a new area. Both the CEO and the top management were interested and discussed the proposal in detail. 2. Appointment of High level implementation Task Force: They promptly appointed a high level Task force headed by a General Manager (G. A. Advani) along with some of the top management team as members. The task force functioned for nearly three years in introducing and monitoring the implementation of the system. 3. Placement of the System at High Level in the Organization: One of the conditions the authors stated for the success of the new function was its strategic placement. Generally at that time the personnel function was given low priority and was generally placed at the lower level in the organizations. We convinced the management that the function could not succeed unless it was strategically placed at a higher level. It was agreed and the position of Vice President, HRD was created in the company. 4. The Competent Head of the Function: While selecting a person to head the new function, it was strongly recommended that a very competent person should be given the responsibility. Fortunately, the CEO agreed to request S.R. Subramaniam (SRS), highly respected competent Engineer, to head the function. Subramaniam ensured thoroughness and effective implementation of the various parts of the new system. It may be mentioned here that later, after the retirement of N. M. Desai, Subramaniam became the CEO of the company. The success of the new function very much depended on the competent leadership provided in the organization.

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5. The Strong Internal Resource: No change can succeed unless there is strong and competent internal resource to implement and monitor the change. It was fortunate to have Dr. Dennison Pereira as the internal resource. Dr. Pereira combined his insightful experience in the organization with his academic competence and child-like excitement to search new ways of solving problems. There is no doubt that the success of the system owes a great deal to Dennison's role in the beginning of the new function. 6. Involvement of all Levels of the Organization: The authors emphasized that the systems and processes being introduced must be discussed in various forums of employees, helping them to raise questions for any modification in the system as required. Workshops and seminars were held on the new systems and procedures. People raised questions and seem to welcome the various changes being planned. This facilitated the success of the system. 7. Developing Internal Competence: The Company needed several people to help in implementing the new system. It was necessary that the system and process were adopted with the help of key line managers. Therefore, an extensive training programme was organized to develop relevant competencies for implementing the systems. Over a hundred internal managers were developed to communicate the system all through the company. The term L&T University was used informally by these members to represent the new education and learning they were facilitating through the HRD system. Spread to Other Strategic Organizations Udai had worked with late Professor Bhattacharyya on the second reorganization of the State Bank of India. The new HRD system was also developed for SBI. Shri R K Talwar, the Chairman of SBI took personal interest.

Then the system was recommended for the other state banks, and their CEO s were so excited by the new concept that they suggested to take the responsibility of introducing the system themselves! Later, TV volunteered to work with Bharat Earth movers Ltd. To introduce and stabilize the new system. Capitalising on this experience both Udai and TV offered the first workshop on HRD systems at the Indian institute of management at Ahmedabad in 1979. A draft of their proposed book on designing and Managing HR systems was circulate din this workshop. Later a course and series executive development programs were started by Udai and TV at IIMA to popularize and promote HRD. Crompton Greaves, State Bank of India and its associates and a few other organizations followed this initiative and Udai and TV worked as their consultants in introducing and implementing the HRD systems and starting new HRD departments separate from personnel. The spread of change to these strategic organizations has been well documented (Rao, 2004). Diffusion of Change: Networking Strategy At that time Udai went on a long consulting assignment, as USAID OD Advisor to the Health Department of the Government of Indonesia, TV continued the work of diffusing change in India. Larsen & Toubro created a Chair on HRD at XLRI Jamshedpur, which was taken up by TV in 1983. One of the conditions of the L&T Chair required L&T professor to give an annual public seminar on his work. TV used this to get L&T host the four-day seminar at Mumbai, where more people could attend. The seminar focused on the recent experiences in HRD. About 40 persons participated in the seminar. TV presented the integrated HRD model developed at L&T. Dennyson spoke about how it was being implemented. Susan spoke about their attempts at Assessment Centers. The seminar explored what was happening and not happening in HRD, how

many organizations were not able to understand the right spirit of HRD, the helplessness of HRD managers in convincing some CEO s etc. A number of success stories were also shared and there was new enthusiasm in all the members. Rajen Gupta shared his struggle in Jyoti Ltd and the support he was getting from the top. Subhash Durlabhji shared how HRD was an integral part of the Japanese philosophy. PVR shared HR practices at Sundram Clayton member of the TVS Group. TV shared his concern for continuing the process of learning from each others' experiences. The response was very positive. As expected, in response to a suggestion from TV who was leaving XLRI to return to IIMA, the members proposed continuation of the Initiative under a new banner. Several suggestions were given. It was Rajen Gupta who suggested that we call this body network as the term network means connecting with each other. The suggestion was readily accepted to set up HRD Network. It was also agreed that different cities should have such Networks. T P Raman and his colleague Mohan agreed to give facilities and promote it in Mumbai. PVR and Chandrasekhar agreed to do this for Chennai. Prasanna and Kishore Rao agreed to do this for Bangalore. Rajan Gupta agreed to do this for Baroda. TV volunteered to explore for Delhi. Coordinators were appointed, briefing them about organizing such Networks. Fr Abraham agreed to stay behind in Mumbai to visit L&T and get the material for the first newsletter. The newsletter was supposed to disseminate the new knowledge about HRD. It was agreed to have one intellectual article by an academician, one essay profiling in details the practices of accompany, a few case lets of problems and issues, which may be posed to the reader, some references and bibliography and news items. Fr Abraham and TV thought of getting every number sponsored by a company committed to HRD and having done November

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some good work worthy of sharing. It would meet cost of printing of 2000 copies of the newsletter and also the mailing it free to all HRD chiefs and CEO s in the country. L&T was the natural choice as every one was talking about L&T in relation to HRD. L&T readily agreed. Abe stayed on in Mumbai to prepare feature on L&T. TV wrote an article on HRD. Rajen Gupta's dilemmas in Jyoti was converted into a case let the first newsletter was published. The seminar proceedings were also published as a book "Recent Experiences in HRD". Then TV returned to IIM, Ahmedabad, and continued to promote networking. In the fist newsletter the idea of forming the HRD Network was announced. TV worked with: State Bank of Patiala, Indian Oil, Sundaram Clayton, Hindustan Petroleum, MMTC etc. While Abe continued to coordinate from XLRI, TV helped in setting up National HRD Network. Somanth Chattopadhyay drafted the constitution of NHRDN in a hotel in Madras where they happened to work on a joint assignment. S. Chandrasekhar facilitated this initiative to form the South Indian chapter of NHRDN at Madras with the help of the Madras Management Association which launched the first meeting of the chapter. Institutionalization of Change: There is a long history of the evolution of the National HRD Network. The main milestones of the developments are given below. The names are indicative of the kind of persons involved and the lists are not exhaustive. The lists are largely limited to those office bearers who played active roles. A large number of HR professionals like Balaji, Mali, Aquil, RR Nair, Rupa Padki, Nagaraj, Pallabh, Hari Iyer, Gopal etc. played a very supportive role and kept the Bangalore chapter provide leadership. G.P. Rao was all over. • Foundation and Culture Building: (TV Rao, Fr. E. Abraham, S. Chandrasekhar, PVR

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Murthy, K.K. Verma, Anil Khandelwal, KS Rao, H N Arora etc) • Stability and Growth (MRR Nair, Udai Pareek, Anil Sachdev, Arvind Agarwal, Shashi Khanna P K Sarangi, Rakesh Kumar, Keith D'Souza etc) • Turbulent Times Management (Rajesh Vidyasagar, VS Mahesh, Debashish Mitra, Arvind Pande, Baburaj Nair) • Turn Around (TV Rao, Satyanarayana, YRK Reddy, Arvind Agarwal, Udai Pareek, Rupa Padki, P V R Murthy, Bangalore team and Delhi team) • Going places (Santrupt Mishra, Arvind Agarwal, G.P. Rao, P.D. Dwarkanath, Delhi Chapter, Pune Chapter and other members of current team) • Going Global (in process) Different individuals contributed to development of NHRDN at different stages. Of these, stage 3 of turbulent time took place by accident. V.S. Mahesh and Rajesh Vidyasagar left for UK and USA in the middle of their terms and Arvind Pande was busy providing stability to SAIL. During this period, NHRDN slowed down but all core activities continued. An interim committee had to be set up to rejuvenate NHRDN and TV shouldered that responsibility and got an Executive Director appointed to pay full attention to NHRDN. During the turbulent times, when VS Mahesh left the country, TV took over again as Interim President and ensured that the next President was appointed and that no activity suffered. Thus, twice in this period TV had to play the role of managing NHRDN's stability and continuance. The credit of a big launch of the HRD network should be given to Chandrasekhar of L&T, assisted ably by Mukunadan and PVR Murthy at Chennai, Anil Khandelwal and KK Verma of Bank of Baroda and Fr Abraham. The

Newsletters used to be published and mailed from Ahmedabad. This continued until Keith D'Souza joined XLRI and Fr Abraham returned to XLRI as its Director. In the Initial years TV was self appointed President of the NHRDN and Fr. E Abraham was Secretary and Treasurer of the NHRDN. There were no paid members. In a short time NHRDN established itself and chapters were opened wherever there were interested people. It was registered as a Society and membership was made open. The journey from then for the next five years has been that of hard work and perseverance. No one knew NHRDN and many did not see the reason for NHRDN when ISTD was serving the same purpose. Only those who saw the distinction between HRD and training appreciated the need. The First national Conference is a record of sorts. It had a full day devoted to CEO presentations. Starting with Dr Krishnamurthy who inaugurated the program many CEOs made presentations. They include: Suresh Krishna, Venu Srinivasan, M V Subbaiah, Deenadayalu of MRL, Arunachalam, and KK Nohria of Crompton Greaves etc. A printed version of the conference papers was distributed. All sessions started on time and ended on time. There was a great cultural program by a troupe of Krishnaswamy Associates. A special issue of economic times devoted to HRD was brought out (courtesy IIM colleague and editor of ET Manu Shroff). This was the turning point for the popularization of NHRDN and NHRDN never looked back since then. In this conference the next conference was planned to be held in Delhi and the director personnel of SAIL took a lot of interest and we promptly requested him to Chair the next conference to be held two years latter. To distinguish NHRDN from others and to communicate that this is not yet another body for fellowship annually but a serious body that

does its work professionally, we wanted to give enough time between the first and the second conference. While the preparations for the second conference began almost two years in advance the preparations for the election for the next President also began. MRR Nair was requested to take charge as the next President so that there was also some synergy between the NHRDN proceeds and the conference at Delhi. The Delhi Conference two years alter was also a great success. The programmme started on time even when the Chief Guest Dr Abid Hussein did not arrive in time. He appreciated our starting the conference without waiting for him. It was attended by over 600 delegates and a book was distributed. The Conference set benchmark in size of the Conference, performance on time, themes and academic content, and put now NHRDN fully on stream. Some initiative in governance practices helped NHRD to evolve as a vibrant democratic organization. During the tenure of the authors as President of NHRD , two provision of built in the constitution, one that each person would be a President only for one term and would not be re-elected. The other provision except was to avoid election, and search the next President by a team appointed by the Governing Board. Elections introduce politics in the process, and therefore, it was thought important to have some other modes for searching the President. Arvind Agarwal, during the tenure as President, introduced another useful tradition that the search committee, after identifying the potential President, would interviewed the CEO of the company to negotiate release of time and energy for the candidate to be appointed as President. The provisions has made NHRD a really democratic body. Today NHRDN has over forty chapters, nearly twenty and odd publications to its credit, collaborating with CII to develop HRD models November

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and assess HR professionals and is collaborating with International bodies. By any means it has done a great service to young HR professionals. It has given opportunities to many young managers to test out their leadership potential and has helped a number of young professionals to acquire HR knowledge and set their careers in the right direction. Strengthening the Academic Base: The Academy of HRD The Academy of HRD is an education and research centre set up by the National HRD Network. It is an autonomous institution with its own members. It's founding members consist of organizations like SAIL, Voltas, Tata Steel, Crompton Greaves, Gati, Dr. Reddy's Laboratories, Visakhapatnam Steel, Satyam Computers, ILFS etc. corporations. It is located in Ahmedabad and its campus eventually planned to be in Hyderabad on a ten acre land donated by Dr. Reddy's Laboratories. It has done remarkable work in its initial stages. Though its pace has slowed down in the recent years, it has been contributing silently through its Doctoral and certificate programs. AHRD contributed a great deal so far to Human Capital Formation among HRD Professionals in India. However, there was much more scope. AHRD could have been a globally recognised institution and would have been considered the only place to go or main place to go for scholars across the world. The great dream still remains a dream - the great dream was to have its own campus, data-bank, and library, residential accommodation furnished for scholars to visit, write, renew and disseminate

their work. The relevance and need for such an institution still exists today. Its doctoral programme could have become a flagship programme and would have contributed a great deal to HRD knowledge. In the last 20 years, NHRDN has grown vastly. The seeds for its growth were sown and foundation was laid in the first three years. The agenda of learning from each other continues. The annual or biannual conferences and the chapter meetings for learning from each other and networking continued. The chapters have grown in number. The culture of publishing papers to be distributed during conference continues. The Future Division kills and Integration builds. It is high time that all of us recognized the need and value of integration: integration of "Personnel and HRD" or "OD and HRD" or "Business and HRD" or "AHRD and NHRD" or "NIPM and NHRDN." Integration and collaboration is the only answer for future success. Overemphasis on separate identities and ownership, especially for professional bodies and institutions whose owners are all professionals and not any one or few individuals, is dysfunctional. Divisive thinking is detrimental.. The future of the HRD movement is in realizing that we have not even touched the most important sectors like education, health, infrastructure, government etc. where HR interventions are most needed. We need to pay attention to these strategic sectors. The spirit of HRD lies in learning from each others: teachers, managers, doctors, nurses, in fact all citizens involved in the pursuit of change and development.

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Pareek, Udai & T.V. Rao (1998). Pioneering human resources development: The L & T System, Hyderabad: Academy of Human Resource Development. 165p. Rao, T V (2004) Future of HRD, New Delhi: Macmillan November

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CHALLENGE OF MANAGING ORGANIZATIONAL PREPAREDNESS-ICICI K RAM KUMAR Abstract

In this article we look at the changes that are happening in terms of socio - economic, educational, and demographic aspects of the society and organizational ecosystem and the associated changes needed in the mind set of managing an organization. Drawing up on the case of the financial services industry and specifically of ICICI, the changes required and expectations from HR, employees, and top management are described. The various interventions that are aligned to this change are also described here.

Introduction

K Ramkumar is the Group-Chief Human Resources Officer at ICICI Bank.He has 22 years of work experience in private and public sector industries. He has earlier worked in Hindustan Aeronautics, Hindustan Lever Limited, and ICI India Ltd. Apart from human resources, Ramkumar has also had exposure in managing manufacturing plants.

India finds itself in a unique phase in its existence viz being in the vanguard of not only the Asian economic growth but also the Global economic hope. For the first time, its demographics and reservoir of human talent is turning out be a huge strength. A neardouble-digit GDP growth is powered by the service sector and the resurgent manufacturing sector. By 2020 Indian population will have an average age of 28 years. Currently 60% of the population has more than 30 years of productive work life. Rarely has any country had 500 million people with so much productive work life. However the galloping economic growth and the young demography brings along with its challenges. These challenges are linked to socioeconomic, educational, and demographic aspects of the society and organizational ecosystem. Education A broken education system which does not have any relevance to the new economy. India produces 3 million graduates and November

half a million engineers annually. India's pool of university graduates (<=7 years experience) is estimated to be 14 million - 1.5 times that of China's. Yet, less than 1/4th of this pool are employable in organized industries, given poor linguistic and social skills. Equally, course curriculum focused excessively on learning theory by rote creates graduates with few skills applicable to industry of today. This creates gross shortfall in the inventory of industry ready talent. Poor quality vocational education in the technical discipline and absence of vocational education in the service sector. Estimates suggest that by year 2010, Banking industry will add 1.1 million new jobs, Retailing will add 1.5 million, Telecom 4.6 million and Hospitality 33 million jobs. A large percentage of these jobs is likely to be in front line sales and customer service. Yet, vocational education, aimed at core skill building rather than imparting theoretical knowledge, is often looked down upon by academia as well as students. The consequence would be significant under-capacitization of vocational education sector. 2007

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Socio - Economic Highly mobile and churning workforce resetting the norms of "what is acceptable attrition". The scarcity of industry-ready talent has resulted in too many employers targeting the same limited talent pool. This has created high churn and wage inflation, with attrition in high growth sectors at 20-35%. This combined with exploding employee numbers, means that at any point in time as much as 50% employees could be less than an year old in the organization. This creates an adverse "new" to the "accultured" ratio, challenging the DNA of organizations. The challenge is who holds and inculcates the organizational DNA and the institutional ethos to the thousands who join the organization every year. Confusion among the employees who want the benefits of the capitalistic system but the security and comfort of the socialistic system. While individual choice and potential supernormal rewards for extraordinary contribution are desired, the flip side of undesired consequences for less than expected delivery is deemed unacceptable. This creates an unrealistic expectation that one should get the super-normal rewards and at the same time there should be no down-side risk. This in turn will result in a young and anchor less leadership in organization wanting meritocracy without appreciation of the risks and the inequity & differentiation which characterizes it. Rapidly globalizing organizations faced with the challenge of balancing exporting talent to other parts of the world and coming to terms with differing work cultures of host countries. E.g. notions of required work hours, work-life balance, private space vary significantly across geographies. In such situations, what kind of trade-offs does a globalizing organization make? Ensure a homogeneous work culture by continuing to export talent? If overdone, this

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may compromise brand proposition to local customers. Adapt work culture of the host country? This may compromise the work ethos that makes the organization competitive. Demographic Plummeting average work age leading to middle management talent crisis and the challenge of young leading the young. Low median age of the population translates into an advantage at the entry level pool, yet poses a serious challenge at middle and senior level managers. At these levels, experience and maturity built over time are critical; yet current phase of outstripping growth has meant that talented yet inexperienced managers have been fast-tracked into middle management roles. Relatively few middle level managers have significant age, experience and maturity gap when compared to their subordinates. The Change Challenge with ICICI Drawing from the overall challenges that are explored, in the context of financial services industry and specifically of ICICI we can link it up as below. The financial service Industry has been growing at 30% over the last 5 to 6 years. ICICI Bank has been growing at 35 to 40% year on year during the same period. Given the challenges listed in the context, the following mind set changes were required at the leadership level with respect to talent acquisition and deployment: From outsourcing investment on training to line managers taking ownership for training raw talent. Seeing the role of manager not simply as delivering on tasks through one's team but also as builder of organization's talent pool. Not simply a net consumer of talent but a net creator of talent. From insistence on readymade talent to raw talent that is trainable. From seeing compensation as the sole lever for attracting and retaining talent to investing in learning for accelerating time to

productive deployment of raw talent. Looking at the ability to take raw talent and en-skilling and deploying it as a competitive advantage, creating a cost barrier for competition. From demanding bodies on job to letting new employees go through thorough pre-training for at least 4 weeks right from day one of joining. Making a shift from "manning" of jobs to the rigor of "license to operate". From endlessly complaining on attrition based on the old paradigm to investing in a bench and innovating systems and processes that counter the effects of attrition. From complaining about the education system to investing in creating appropriate content and curriculum for the universities and training the teachers and professors for creating the external eco system. As industry leaders, making a shift from perceiving self as beneficiaries or victims of the current institutional eco-system, to being builders of that eco-system. The corresponding challenge for the HR function was as follows: Linking up with the challenges and the needed changes, HR function needed to realign itself on the following lines. • From being recruitment agencies to ecosystem developers. This required developing capability and stature to engage with and intervene in the education system of the country. • From being administrators of learning to creators, structures and innovators in functional and behavioral content, methodology and medium of learning. Looking beyond the "best-practices" to experimenting with mobile, gaming and simulation technologies. Investing in and gaining credibility as domain experts in instruction design and valued partners for creating learning content across domains.

• From hiring external trainers to trainers of thousands of internal trainers. Creating a pool of internal trainers to deliver leadership, behavioral and functional learning. Focusing on building institutional capability rather than buying skills. • From looking at HR function as provider of services to "Business" to HR function managing the "Business of People", with line responsibility for sourcing, en-skilling and deploying talent. The Challenges with Employees were as follows: The changes that are required need a different orientation from employees. The changes are explored in the following lines. • To cultivate an orientation to year long learning, that will be tested for proficiency. Looking at training as work, in certain cases, license-to-operate on work. • To change from class room and instructor led learning to blended learning of Elearning and class room learning. • To be moved to domains they have not worked earlier, with a pre-condition of learning functional content before being deployed to the new domain. Systemic Interventions The major mindset change that was required was to get the organization to see attrition more as the consequence of the nation's high economic growth and hence a structural external supply issue rather than an internal culture or compensation issue. This led to the initiatives of the organization and its leaders to choose the approach of investing in easing supply through the following initiatives: • Partnering with NIIT to create the Institute for Finance, Banking and insurance. This will deliver 5000, 6-months pre-trained employees in the first year and by year 3 it November

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will deliver 25,000 pre-trained professionals to the Industry. • Investing in the Academy for Banking and Insurance in alliance with Manipal University, which in year-1 will deliver 1000 Managers who have been pre-trained for one year. By year-4 this will deliver 4000 Banking domain trained managers. • Creation of a slew of Academies for Branch Banking, Sales, Credit, Collections, Operations etc. which will deliver high quality accredited professionals year after year. • Moving away from an Urban and English centric talent acquisition to a broad based inclusive talent acquisition fro Semi-urban and Rural India. Focusing on job success factors such as problem solving and relationship skills, rather than linguistic abilities. Creating capability to en-skill raw talent in language and social skills. • Looking outside of India to the International Universities to service the Global requirement of talent rather than export talent only from within. Creating an employer brand in campuses across the globe. The Meritocracy Challenge At ICICI meritocracy governs both performance and leadership talent assessment. The age-old confusion between performers and leadership talent required to be cleared both among leaders and employees. To add to this the much maligned forced ranking system in both performance and talent management required to be put in context. Both these challenges were tougher in the context of a highly mobile young work force that was prepared to exit if not ranked in the top half. The middle level leaders were reluctant to own up to the system and very often took refuge in pointing upwards towards the bosses. While both the leaders and the employees wanted a meritocracy, their comprehension of the true character of the same or the willingness

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to accept the consequences thereof were poor. Add to this the culture of stretch, which is not negotiable. All this lead to a system where there is uncompromising differentiation in growth and rewards. While this engendered a culture of achievement orientation, it also encouraged competitiveness and high pressure all round the year. We at ICICI believe that one cannot create a culture of meritocracy without the top management willing to be unrelenting and unwavering in its clinical execution. We believe that its success is more in its execution than in the articulation of the philosophy. The top management and the operating levels should be willing to live with the attendant noise in the system and not mistake it for dissatisfaction and roll back the execution or water it down. We have found the following to be the essential necessities to change a work place to meritocracy: • Clarity that meritocracy is not going to be popular and tolerance for noise in the system. • Clarity to the middle management that they will qualify to be senior management leaders only if they own this and show ability to institutionalize this philosophy. • Willingness to be clinical, unrelenting and unwavering in its execution. • Transparent and inclusive process, were all levels of management are involved in its execution. • Communicate, communicate and communicate year round the non-negotiable nature of stretch and relative ranking system. • A system that is open to audit by any employee and reining in any senior leader from exercising favors. • Emphasizing that meritocracy is an economic reward differentiating philosophy and not a fair or equity based philosophy.

Conclusion There is a broad agreement that growth momentum of Indian economy is set to continue over foreseeable future. ICICI Bank has the ambition to be a significant global player in the financial services industry (among top-25 banks in the world) by 2010. While evolution of the eco-system is underway, as a process it occurs, not instantaneously, but over a period of time. This means that the change intervention for organization preparedness is far from its logical conclusion.

The two-pronged approach of intervention within the organization on meritocracy and in the outside system to create talent supply will need to continue. The analogy to explain this phenomenon is that of riding a bicycle. Bicycle is inherently unstable and requires significant adjustments and gathering of forward momentum to make it stable. We have now gathered that forward momentum. Yet, exactly like a rider on bicycle, we need to continuously make the micro-adjustments to keep the bicycle steady and moving in desired direction.

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BRINGING ABOUT ORGANIZATIONAL CHANGE-PHILIPS INDIA VINEET KAUL

Vineet Kaul currently heads the Indian Subcontinent HR function for Philips and is also an Executive Director on the Board of Philips Electronics India Limited. His career as HR professional spreads over 31 years across a range of assignments and enriching experiences. He is on the CII National Committee for HR and IR and is also the immediate Past President of the Mumbai Chapter of the National HRD Network. He is a recipient of a number of prestigious awards as a HR professional.

Change is part of everyday life and all of us experience it. There are changes which we see in the family, society, the economic and political environment too. All of us understand and also gratefully acknowledge that change is indeed the essence of everyday. With all this awareness, education and experiences - still each one of us finds Change Management as a challenge in Organizations today. CEO's would also put bringing about change as one of their priorities today. My own experience and most of you would also agree is that whatever and however much we deliver in this area, there is still always a lot to be done. Look at our own country. During the past 20 years or so indeed a lot of change has occurred and we are in a very different situation than before. However, despite the steps taken and results achieved - we still continue to have a lot to do. The same principle applies to Organization Change. It is a given - and as one colleague remarked - "It is like a Treadmill you are on it". Well, it is all up to you as how you wish to manage self vis-à-vis the speed on the Treadmill. Organizations I feel do not have many options today. The immediate Agenda of many organizations is how do we cope with change? Do we anticipate and proactively prepare the

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Organization? Are we leading the change process? Or are we constantly repairing the impact of change? Whilst we have many programs to address the subject in our Organizations - are we doing enough? Will we be able to sail through the troubled times? Is there a clear strategy and approach available which can steer us through? These are some questions on the minds of leaders in Organizations. Why do organizations look to Transform and Change? Interestingly, very often success could be a very important cause. Sometimes it makes the Organizations complacent and arrogant. Accumulated costs, structures and processes during growth phases are difficult to reduce during tough times. Also, being too focused on the interests of only 1 or 2 stakeholders at the expense of others is a cause of the Organization not doing well! In addition to these "internal" reasons, there are also "external" or environment related causes that require organization change. • Regulation: An excellent example is the deregulation process and opening up of the Indian economy which has made the markets much more dynamic and provided consumers many more options. • Technology and its speed of

change is indeed the engine which fires up the organization. Bringing newer products and also changing processes is forcing organizations to gear up in the real sense. • Globalization is another linked reason, with trade barriers being pulled down and free market accessibility e.g. the full impact of the WTO is still to be felt. • Last but not the least is the Customer. The shifts in customer preferences can be traced to a few demographic changes - aging in the West and younger generation in India, changing role of women, etc. Companies that fail to keep up with the changes their customers are going through will gradually lose them. Companies that survive in the long run are those that are able to dynamically adapt to their changing circumstances. Interestingly, you will observe the above four causes are also under constant change. We do not have the comfort of addressing "one" of them and then moving on to the "second one", because all of them are exclusive and also inter related at the same time. This makes the subject very challenging. I would venture to add that it is a "chakraviyuh" which will be continuous and never come to a stop. Designing HR Interventions - Considerations: Organizations are like living beings. Just as we all go through different life stages, we can also identify a number of stages in the life of an Organization. HR interventions need to be designed keeping in mind the context in which the organization is operating. Let me illustrate the above with the Philips India experience. If we look at the developments in Philips India in the last decade, we identify three phases: • Restructuring Phase from 1996-2001: During this period, the Company went through a difficult period of low growth and low productivity which was addressed through a turn around strategy.

• Revitalization Phase from 2001-2005: The Management Team was able to turn around businesses. However, measures taken to improve performance took their toll on morale and motivation. Therefore, the need for re-vitalization in the Organization. • Growth Phase from 2005 onwards: With the business performance in place, the Company embarks on a growth strategy.

Depending on the issues at each phase, we evolved appropriate HR interventions. Some of the key initiatives taken are given below: Restructuring Phase: Improving Operational Efficiencies The Management deliberated and evolved a turnaround strategy which involved divesting of unviable businesses and optimization of costs including headcount. Being a 75-yearold Company, we did not see our legacy as a handicap but dealt with it as a challenge and opportunity. It took us a few years especially as we were spread across six states and had 11 Unions across the country. Many restrictive practices had got in place and these were obstacles which had to be overcome. However, by taking a few measures and actions we had full flexibility, all non-core activities are outsourced (they were run in-house earlier), all activities towards reorganization and rationalization are carried out with full participation of employees. In our plants today, a part of the wage is linked to plant November

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yield/quality and/or skill based pay. The wage increases have also kept below the regional trend for similar Companies. Interestingly, in addition to the Union -- a settlement is also accepted individually by each employee in a respective location. We have also gone through quite some divestments and all these processes have definitely had good outcomes, which solely reflects positively on the leadership.

Survey Tools. All in all, these have been very effective in bringing about changes in the Organization and thereby Company benefits as a whole. As a Company, we do encourage cross-functional as well as quality improvement project teams and hold competitions at the country level and also depute the winning teams for International level competitions.

Driving Performance Culture

Today I see this as indeed the greatest challenge before us as an Organization especially due to the fact that we have different product divisions across different industry segments as well as being located across various parts of this country. As one Company, we are indeed putting in more effort in order to have better lines of communication across the Organization. Common platforms, learning events and workshops do supplement the existing practice of periodic newsletters as well as town meetings in the Organization. We also launched a number of programs aimed at building Employee Engagement. For example, the Employee Outreach Program, where a team of Senior management meets employees at their respective locations and hold Open House at each unit. Our efforts paid off as evidenced by the high scores Philips India achieved in the company-wide global Employee Engagement Survey conducted.

We had identified this as a very major need and hence have been actively working on this area. The process comprised of proper deployment within the teams, regular tracking and measuring of performance both at business and individual levels as well as linking compensation to achievement of targets. For the last 8 years, we have also gone into differentiation in compensation, which becomes quite aggressive to the extent of being at least five times in one grade itself. Revitalization Phase Creating a Conducive Work Environment Employees have responded very well to bring change in the work place. To give an example, we have been able to bring about a shift in work culture by improving work place management, which in turn has helped to build an open and cordial environment, which enhances productivity. All services have been outsourced so as to provide good quality, costs and delivery at the workplace. Employees responded well to our decision to reduce the number of paid holidays in a year from 18 to 10 days in all commercial establishments. I do not think this would have been possible in the normal course. All across the Company, the employees are involved in the journey to excellence and you will find departments working on their improvement plans and using Business Balanced Score Card and Process

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Communication

The Growth Phase: Talent Management Talent Management has been identified as a priority area given our growth agenda. Career planning and development receive focus as also having the advantage of different businesses where we are also able to provide opportunities for people within the Organization. Very specifically, we are focusing on identification/ development and positioning of our High potential employees as also having functional

and regional development programs. We also have a Career Centre, which is an internal job portal, where employees can apply for positions across Philips organizations worldwide These activities are part of our overall Talent Management process and stand the Company in good stead with providing Managers for our present and future requirements. Key Learnings I will now move on to a few key learning's which we have gained through experience. To summarize, a successful change process normally involves the following five steps: a. Develop an Initial Plan: This starts with painting a picture or "creating a vision". Whatever be the state of Organization or nature of the business, this is an important step to put together as many pieces together e.g. what is it that we want? Where should we be? Where do we want to be? What is the status today? How do we feel we will get there? Why do we want to be there? What is not going well today? With many of the initiatives and changes that we worked on - in quite some of them, I realized that the time and effort spent in envisioning and putting a plan was very useful and also formed the Foundation for the next steps ahead. b. Building a Sense of Urgency: This to my mind is the most critical part in organization Transformation. It is indeed a catalyst to bring about the change. Having a sense of urgency whilst mostly addressing a "crisis" could also be directed to address "major opportunities" too. In other words, it is not only in tough times that we need to bring this sense of urgency - but also looking to market realities in grabbing opportunities. It is popularly believed that the urgency rate is not high enough until 75% of the management is honestly convinced that business-as-usual is

totally unacceptable. Organizations that have been successful in getting this step right - have experienced that it smoothens very much subsequent actions and communication that are necessary in terms of change. We all know that a crisis very often bonds large Corporations and it is this state that brings people together. • Forming a Core Group to Lead the Process : Whatever may be the prevalent practices - it is observed that most often the bottleneck is at the Top. Even otherwise the troops in the Organization look to the Top i.e. the leadership. Be it for direction, guidance and even role modeling. Hence, I find that in an Organization wide Transformation - it is useful to have a core group/steering team at the helm. Here I often support a Top-Down approach which all would understand very easily. The key people involved in this team have to be persons who are in the leadership group of the Organization and have the mandate to lead and deliver the end results. Of course, it is clear that the leadership group has to own and bring about change. But, often this role needs to be orchestrated and be seen across in the Organization - more important is that a "passion" in the whole process should be evident rather than be perceived as one more initiative / instruction flowing from the Top. A key challenge is therefore getting to the Right Leaders to steer the process and also more importantly encouraging these to work as a team. • Communication: This part does not need much explaining - but truly the role it pays in the Organization, needs some explanation. Organizational Transformation heavily banks on a very good communication across the Organization and its various stakeholders. We have numerous examples of the Organization, for whom good communication has made the day (achieve results). Simply put - the Organization is people and people need to know a lot about the November

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need for change, what will change and what not, how does it impact the individual in the Organization etc. etc. Organization Change is not as difficult - but we constantly need to communicate, the Vision, the need, the what, how, why and numerous questions that we anticipate and also cannot anticipate. Let me clarify that we communicate not only by our words but also by our actions. A compelling vision, leading from the front, open houses, continuous communication with all levels of Organization is something many of us practice - The quality of communication - does it seek involvement, opinions and transparency of the leadership are all put to test in a journey of Transformation & Change. I have experienced that open, fact based and the passion with which we communicate is an indication of success in getting to the results. After all, what better results than when all employees in the Organization are able to understand the purpose of Transformation and also play their roles in a manner which creates harmony and the Organization change gets in place. It is also possible that this process does take time but I would say that it is worth the while and just rushing through this step is not advisable. • Track Achievements and Recognize Achievements It is useful to create some milestones as we embark on the journey to Transformation in the Organization. These milestones are indeed points of arrival and also help in reviewing and seeing where we have reached. After all, Rome was not built in a day - so we have to look at opportunities and signs of achievements. To take an example, a total change in the way of working and culture will take some time as we go along. However, we can always be vigilant for some indicators which are really "shortwins" and small successes. These need to be tracked and highlighted. Very often it is a few incidents or people who really take the major

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steps/action for change. Now this to my mind is an ideal opportunity to highlight to the rest of the organization. Also, such individuals or teams need to be recognized and even recorded so that they indeed are seen as the role models. Very often such recognition apart from motivating the individual or team along - kindles a positive feeling amongst the rest of the organization too. The behaviour improvement actions need to be publicized and also rewarded. If it calls for a celebration - please do it. Very often, these opportunities are missed out and later it can be too late. Employees do need positive stokes and hence these opportunities for recognizing short wins are a must do. The appreciation works wonders and indeed charges up the environment. This is exactly what the organization requires in its journey to bring change. It reinforces the strong positive feelings of the few individuals and goes ahead in getting more to the flock of the vital few. Believe me, it is not difficult to do these acts, however the risk of loosing out by not doing these is much more. • Consolidate and Institutionalize Whilst short term wins and gains take you ahead on the journey of change, it is necessary that these changes are consolidated and there to stay. We also need to guard against things slipping back to the earlier times Very often good things happen and these should be replicated as required across the Organization, to expedite the change process. Conclusion To conclude, Change is inevitable and an intrinsic part of life. Success lies in looking at it not as a "threat" but as an opportunity for transformation. In designing HR intervention, one needs to take a holistic approach by designing appropriate strategies and processes to provide end to end solutions and more importantly, involving people in the transformation process.

ORGANIZATIONAL CHANGE-MARUTI SUZUKI S.Y. SIDDIQUI

The Context

• The changing business environment in India with the globalization setting in almost all sectors including the Auto Industry

The period from 1996 to 2007 can be considered as the second phase of the Company which also experienced the Globalization of Automobile Industry in India. The entry of global players in the Auto industry in India meant that there was a very specific need for Maruti to change and prepare to handle the global competition pro actively.

• The changing structure & identity of Maruti from a PSU to a 50:50 JV (between Government & Suzuki) and then to be a Private Sector company (Mid 2003 onwards)

Jagdish Khattar, Managing Director Maruti Suzuki often says that "We thank our competitors for creating excitement and getting the best out of us to offer better products and services to our customers".

The Journey of 26 years

This necessitated the Company to introspect, reassess and redefine its Business and Organizational Strategy. It was important for the company to come out of its comfort zone and fight to retain its leadership position. Both the media as well as the experts had at that time written-off Maruti as another Government enterprise which will succumb to the pressures of globalization.

The need for organization change at Maruti Suzuki was necessitated linked to two important variables:

S.Y. Siddiqui is Executive Director human resources at Maruti Udyog Limited. He is also responsible for corporate HR for Suzuki Powertrain (engine company) and Suzuki Motorcycles. He is on the board of Maruti Suzuki and part time director on the board of Suzuki group companies Suzuki powertrain and Suzuki motorcycles.

Maruti was incorporated in 1981 as a public sector company and started its business operations in 1983 in technical collaboration with Suzuki Motor Corporation Japan with the objective of making small cars with latest technology and economic price offerings aiming at the affordability by the masses. If one may observe, the first phase of Maruti lasted from 1983 to 1995. This phase saw the revolutionary launch of the initial models and unprecedented commercial success of Maruti. It also saw the consolidation as well as unopposed growth of Maruti. The company enjoyed a virtual monopoly with a market-share in excess of 80%. The first few models launched by the Company viz. 800 and Omni still remain one of the bestsellers. November

Inspite of the adverse business scenario and negative Industrial Relations environment in the company, the entire Maruti team regrouped and emerged as a strong and committed team and under the excellent leadership of Jagdish Khattar, who took over the reins as the Managing Director in August 1999" the company has undergone a big change both on the business as well as on the Industrial 2007

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Relations perspective and emerged as a winner retaining 55% of the market share with a healthy and growing bottom line. In 2003 Govt. of India decided to disinvest its stakes in Maruti. The launch of Maruti's IPO which was one of the most successful in India's history, restructured the company's Equity with 54% by Suzuki thus making Maruti a Private Sector Corporate & part of Suzuki Motor Corporation, Japan. That was the time that the company decided to drive another major change initiative aimed at Organization and People Strategy Need for Change Organization Culture of Maruti reflected high Business focus and commitment; high target and result orientation and strong business systems and processes. However, it also reflected an Inward-looking approach; strong compartmentalization and functional boundaries; looking up culture with low risktaking behavior; bureaucratic & slow decision making process and culture lacking the celebration approach. The HR Function was IR centric, centralized, administrative, and control oriented. The HR focus was Policy and rule driven and not people driven. The HR processes were conventional, slow with bureaucratic decision making. In 2003 too it still reflected primarily a conventional approach to HR Policies far away from the prevailing HR trends. Above all it was lacking sensitivity to both business & people connect. The People profile has been warm, competent and with an element of pride being a Marutian. But the people profile was impacted by the Culture and also the role of the HR Function over the years. It thus did reflect a conventional mindset. There were conflicting views on the HR needs expressed by the young managers vis-a-vis the relatively older population. Also

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the perception about the HR role being a black box, policy and rule driven and insensitive to the people needs, meant a clear disconnect between people and HR Philosophy of Organization Change at Maruti • Integration of change initiatives with the Business and Organizational strategy • Organization Change aimed at redefining and developing an Enabling Culture • Focus on People development and Institutionalization of capability building processes Periodicity and consistency of OD interventions • Leadership development processes for all levels including the Top management • All change Initiatives driven from the top The Strategy of Organization Change at Maruti • To build on the successful past, commitment and competence of people by launching the change in an appreciation mode • Emphasize the need for change linked to external environment & as a pre-requisite to future success of the company • Create ownership and participation towards the change initiatives through strong and consistent two way communication and education process • Focus on the senior pros to lead & the young population to drive the change • Organization change to be gradual and linked clearly to business needs Organization Change Initiatives at Maruti To initiate the Organization Change at Maruti the first pre-requisite was for the HR function itself to change. Hence HR Team had to prepare itself to change before attempting the Organization Change Initiative. It took some real time and effort to first initiate the change

in the HR thinking, approach and the HR credibility at Maruti. The effort involved introspection and brainstorming sessions, informal and formal training, exposure to external HR fraternity, the strong HR linkage to business and people and aggressive HR leadership and direction. It also involved cutting open the HR cross-section view to the key stakeholders - People, Functional heads, Directors and the Board. It required a participative, consultative and flexible approach to define new or redefine existing HR Policies, Systems and Processes. Some key directions were as follows: • HR's transition from a stand-alone identity to Integral part of Business

gap between the Indian senior colleagues & our SMC counterparts. Hence the balancing act required sensitizing them individually for ownership of the Organization Change initiatives. Above all it required a tremendously patient, educative and flexible approach to discuss, deliberate and convince our SMC colleagues on some of the new concepts, policies etc. From 2003 onwards, the Organization Change Initiative was launched through various OD interventions at five different levels: • Top Management • Senior Management • Middle Management

• HR identity and credibility as mere Staff support to Strategic part of Business

• Junior Management

• From Manpower costs to Investment in People

Leadership Retreat for Top Management

• From Labor Law compliance to Strategic IR Perspective • Personnel Administration to People Connect • Technical Training co-coordinator to wholesome People Development • Discipline concept to developing and sustaining positive Work Culture The Success of any Organization Change Initiative depends to a large extent if it is owned by the Top Management and if it starts from the Top. Hence deliberating the Organization change perspective with the Top Management specially the Japanese colleagues at Maruti was critical and cumbersome at times. Sometimes one realizes that life is so simple if corporate communication is based on English only. Also it was an enormous task to overcome the Cultural gaps between SMC, Japan and the People issues in the Local context of our country. At times we could observe a fairly clear

• Technicians/operators The key objective was to build & strengthen the Top Leadership Team at Maruti including the Indian and Japanese Directors. The effort was to shift gears from an operational focus and review perspective to Strategic Business Planning & Transformational People Leadership. The first initiative in this regard was full of ifs & buts, language issues & the cultural subtleties involved between the Japanese culture of SMC Japan & Maruti's Indian ground realities. The balancing was tough and required tremendously patient approach as there were Business Success and learnings in both models. The Leadership Retreat involving all Directors, over two & a half days residential at Bangalore, was facilitated by Dr. Pritam Singh and Dr. Asha Bhandarkar with focus on: • Team Building perspective i.e. Leadership Team of Maruti Suzuki •

Self-development focus for each Director based on feedback from others

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•

Develop a Strategic Perspective of Long Term Business Plan

• Leadership Training by Dr. Pritam Singh & Dr. Asha Bhandarkar at MDI

•

Mentoring/Coaching role to develop next level people.

• 360-Degree Feedback Process

•

Creating a new curve for Maruti

• Potential Assessment through Assessment Centers & Feedback sessions

Leadership Development Initiatives for Senior Management Senior Management The focus was on global business perspective, people management and people development, and leading and managing change. Leadership development was facilitated through: • A two and a half day Leadership Training at NCR (Jaypee Greens, Greater Noida) •

External Training nominations at premier Business Schools

•

Two weeks, Training at Europe - meeting thought Leaders from Corporates & Academia through ESCP EAP Business School (Germany, France and UK)

•

Leadership Assessment of each person & Feedback Session

•

On the Job - Coaching and Mentoring Role for young professionals

•

360-Degree Feedback Process

•

Developing them as Internal Assessors & Trainers.

Leadership Development of Middle Management The focus was on exposure to the external business environment in India, people management and people development, and accepting & facilitating change. The need was to develop them to play an effective leadership role as the first interface with young population. The development was facilitated through: • Leadership Training by GE International • Nominations to external Trainings at Leading B- Schools

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• Performance Feedback Sessions

• On the Job - Coaching & Mentoring Role for young professionals • Developing them as Internal Assessors and Trainers Change Initiatives for Young Managers • Create an Enabling Culture • Positive and high performing • Free flow of communication • Appreciation and celebration • Fostering innovation and creativity with patience to absorb failures • Mentoring/Coaching for all Campus Joinees (Graduate Engineer Trainees, fresh CAs, MBAs & graduates). This resulted in "On the job" development that is customized to the individual and yet is flexible -- formal or informal. Senior professionals in the company selected as mentors. Training on mentoring has been provided to all mentors. To help the fresh joinees to settle in the Company, all campus joinees are also provided with buddies who are relatively younger professionals. • With a view to develop all-round business managers who can become General Managers in future the following initiatives were emphasized: • Job Rotation- Good performers who have spent five years in one function have to be necessarily rotated to other functions. The job-rotated individuals return to their parent function after around 3 years.

• Cross Functional Teams (CFTs) on critical projects are formed which give exposure to young managers which fosters Team Working, Experimentation - tolerance for failure, Empowerment, Innovation and Learning. • Stretch Assignments such as employees at Manager/Sr Manager level acting as Department Managers (General Managers), selection of Area Managers as Regional Managers, etc. • Clear Career Growth Paths • Fast Track for high performers and high potentials • Normal Track for good performers • Extended Track growth for solid citizens Change Initiatives (Workmen)

for

Technicians

After the VRS of 2001 & 2003, focused interventions for Technicians were launched to bring in positive culture and mindset change. To achieve this, training initiatives were introduced to educate and change the mindset of workmen. Another big impact was created by the participative approach in resolving IR issues through Employee Relations Development Committee (ERDC). Structured communication channels have also helped the company not only to manage the Industrial Relations but also to evolve a environment of trust, confidence and mutual cooperation. Company has also created opportunity for

developing family connect through 'Parivar Milan' (Weekly half-a-day event in which approx. 40 technician families are invited for plant visit) and 'Family Day' (Annual event in which all the Maruti employees along with their families, are invited for a evening full of entertainment, fun and celebration). Subsequent to this Company has also introduced Reward & Recognition program for all employees. Strengthening Internal Communication Processes - directly lead by MD • MD's quarterly Communication Meetings for young managers and for middle managers • MD's quarterly informal 'Tea-Group' meeting with young managers • ED (HR)'s quarterly Communication Meetings for young managers and for middle managers • ED (HR)'s quarterly informal 'Tea-Group' meeting with young managers 2007-08 onwards, Maruti is now entering into the third phase. This is going to be the most critical and will define the future of Automobile Industry as well as Maruti. Now we are looking at re-defining our Business Strategy & Plan as well as continue our journey on Organization Change at Maruti Suzuki. As per our honest evaluation, we have covered only 50% -- 60% of the distance so far and thus have to continue our journey to reach the destination by 2010 --

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IT WILL BE DONE, I HAVE TO DO IT: A STORY OF PCBL ASHOK GOYAL At times some of the most challenging aspect of one's professional life is to bring out a massive change. The turnaround of PCBL is an experience that I cherish and is fresh out of oven. Taking Over the Reins Ashok Goyal is an IIT Kharagpur and IIM Kolkata graduate. He has 30 years of multi domain and cross industry experience over the globe out which 16 years have been in various companies of RPG Group, i.e., Ceat, Harrison Malayalam, KEC International and Phillips Carbon Black Limited.

PCBL, a part of RPG Group is pioneer and market leader in the Carbon Black Industry in India with market share of 41%. In spite of being the market leader, PCBL was lagging behind in profitability with respect to the major competitor (Market Share 33%) and the gap was continuously increasing. For FY06, PCBL had declared PAT loss of (-)

He is currently spearheading Phillips Carbon Black Limited (PCBL), a jewel in the RPG group of Industries as its Managing Director. He has taken the company through a journey of turnaround and consolidation in nine months and the company has now embarked upon an ambitious growth path. He is known as a "TurnAround Artiste" in the RPG Group

Rs. 14.64 cr and the position had further worsened in Q1 FY07.

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The comparative position is given in figure 1

Figure 1 : Competition scenario pre turnaround

The Company vision is to become a global producer by 2008 with capacity of 450,000 MT but due to poor financial results the Company had not initiated any action during 2005 and 2006 for expansion to enhance capacity from the existing level of 270,000 to realize its vision. It was dismal in terms of how 2007

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things were going for a company that was the market leader. PCBL Journey: My Experience In this article, I am sharing the strategies implemented, leadership challenges faced and the culture change initiatives taken which enabled organization to transform. From a loss making entity in quarter 1 of FY 07 to have profitability at par with competition in quarter 3 of FY 07, the journey was nothing but exciting. I believe any organization can be turned around if we as leaders basically have a belief that "Nothing is Impossible" and have that feeling and conviction developed across the organization by leading by example. Strategy Over the last 18 years I had an opportunity to take over and turn around divisions/companies which were in crisis mode due to losses being incurred. When I look back, I find the common elements of strategies applied were: a. Identification of operational efficiency gaps in each functional area by benchmarking operations with domestic and international companies and thereafter removal of the gap by achieving mindset change. b. Continuous reduction of Competitive Disadvantage the company had due to ~

i. Technology • Plant location

• Develop innovative culture and change mindset

• Culture

Consolidation Phase

c. Gradual increase of competitive advantage quotient and thereafter embarking upon "Sustainable Growth Path".

Reduce Competitive Disadvantage

Competitive advantage was defined by one of the Indian industrial leaders as under ~

Build Competitive Advantage

"When the water level starts rising, the level should come to your chin while all the others are drowned". I have found the above a very simple way of communicating to all stakeholders in the company including workers and unions the criticality of building competitive advantage quotient and ensuring that no action or decision taken gives the company competitive disadvantage. The Benchmarking exercise should be done with total honesty and for doing same one should take inputs from all available sources i.e. published data and inputs from own employees, Ex-employees of competitor, consultants, customers etc. We need to avoid trap of justifying the gaps due to reasons beyond our control but instead should focus on preparing action plans to overcome the gaps with innovative solutions. Having identified the gap and prepared the action plan, same should be shared with everyone in the organization so that there is a public commitment to deliver the results. Based on the concept of competitive advantage, the strategies applicable for a company in different phases of growth are as under. Turnaround Phase Reduce Competitive Disadvantage • Benchmark operations and identify gaps. • Develop clear strategies to cover gaps • Implement strategic actions as per time schedule and monitor benefits. • Capture opportunities

• Build on strategies of turnaround phase Growth Phase • Execute growth/diversification plans effectively at locations and with technology which gives competitive advantage. • While growing ensure continuous improvement in operational efficiencies. Sustainable Growth Phase • Build a Business model which is not easy to copy and has high entry barrier • Follow Organic and Inorganic growth • Ensure organization continually reinvents itself Leadership Challenge Turnaround Phase The leadership challenges in this phase are to create a culture of high performance and change the mindset of the people. The step wise approach to achieve these challenges is : Step 1 • Develop high level of commitment at the Management Team level which sets an example for others in the organization. • Share vision and ensure acceptance of the challenges across the organization to achieve same. • Challenge the Management Team Members who are leaders for their functional areas with assignments and targets which provide stretch to enable them and their team members to draw on their full potential • Lift aspiration of people November

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• Lead from front by example Step 2 An organization becomes sick or performs badly with respect to competition in the same industry only because of basic flaws in the mindset of the people in the organization which leads to wrong strategies and actions. Unless the mindset are changed, company performance cannot improve. PCBL as an organization was focused on market leadership and market share in each market segment and had lost sight of contribution levels leading to having market leadership but not profit leadership. In commodity market for a product like Carbon Black where there is no price premium or brand loyalty, a company has no choice but to achieve Cost Leadership which would lead to Profit Leadership. Only with adequate generation of internal funds, company can invest and expand to maintain Market Leadership. As such, it was critical to have this basic change in thinking i.e from : Market Leadership

The Alignment of mindset leads to correct operational practices which resulted in Superior business results The Leadership Challenge is to create a VIRTUOUS CIRCLE ~

Some of the examples of mindset change done in the various functional areas in PCBL are as under ~

Cost Leadership

The leadership challenge is to identify the appropriate mindset required across the company in each functional area and for arriving at the same, it is critical to understand what are the key industry drivers for the industry in which the company is operating which would give maximum benefit in terms of revenue and profit as well as reduce competitive disadvantage and increase competitive advantage quotient for the company.

In PCBL the operational efficiency gaps were covered only by such mindset changes across the company in internal and external stakeholders leading to an annualized benefit of more than Rs.90 cr in three months.

The process followed was as under :

• Captures opportunities and continuously innovates

Identification of new mindsets required

Ensuring everyone shares the specific new mindset

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Consolidation Phase Leadership Challenge in this phase was to ensure that • organization continues with strategy of cost cutting and maximizing contribution

• Maintains momentum to ensure ongoing high performance Growth Phase In an organization which turns around and

consolidates in a short period of four to six months employees are likely to develop inertia and a feeling of "We are the best" which can lead to loss of momentum. We therefore need to identify new strategic needs for changed competitive condition to overcome inertia. This can be done by creating positive crisis as under: • Convince employees that current performance was good but not good Enough • Develop new strategic challenges to galvanise people into action • Create an enemy which could be a threat to survival of the company. In PCBL having achieved cost leadership in the turn around and consolidation phase new strategic challenges identified and communicated were : • Achieve Service Leadership • Achieve Quality Leadership Positive crisis was created by communicating the new Demand and Supply scenario of excess supply due to expansion by competitor in which survival would depend on being better in Service and Quality to maintain market share. It is critical to reflect on the strategic health of the organization in the Growth Phase when company is financially doing well. In most of the cases we do this when organization's profitability is on the declining trend. Having identified the strategic health gaps which are giving competitive disadvantage, we need to communicate same across the organization and develop innovative solutions to overcome same. The other Leadership Challenges during this phase are ~ • Ensure execution of growth plans at optimum cost and as per schedule

• Preserve the culture of high performance developed. - By continuously reinforcing and renewing mindset - Consistently improving and increasing job content of everyone - Ensuring no burnout by work-life imbalance It is extremely critical that the Core Team is willingly participating in the journey of "accelerated growth" as the work pressure would need personal sacrifices by way of lack of time for family. During this process we need to ensure that we as Leaders are "Energy Givers and not Energy Taker" through any action of ours. Sustainable Growth Phase For PCBL to remain on Sustainable Growth Path, the challenges are • Achieve Service & Quality Leadership • Make PCBL Carbon Black a branded product • Enter Speciality Carbon Black business • Continuously expand capacity • By generating adequate internal profit to finance growth • Identifying locations for expansion with secured and captive Feedstock supply which will give long term competitive cost advantage • Grow at international locations The above would enable creation of entry barrier by increasing the competitive advantage quotient substantially. Culture Change To build a culture in the organization where individuals have an approach of "I have to do it" "It will be done" is the biggest leadership challenge. November

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In PCBL we have been focusing on this through communication and interaction in various Forums with the employees and the unions. We firmly believe that "I am doing my best" or "I shall try my best" are approaches which do not lead to excellence in results. These approaches connote as under :

2. Boss can delegate fully without need to monitor

"I am doing my best"

Productive organization

1. 1.Defensive approach

The above model was developed in PCBL during the orientation program in November'06 and thereafter communicated to all managers through email.

2. Putting limit on Self Capability 3. Cannot do Better "I shall try my best"

Success assured

Leadership Challenge is also to build teams across the organization which believe in

1. More positive approach 2. Believing in his ability to deliver results 3. Commitment to do best but not sure of results

"The greatest pleasure life has to offer is the satisfaction that follows from - Participating in difficult and constructive undertaking".

Success not guaranteed

Only if individuals get satisfaction from participating in difficult and constructive undertaking would they live, breathe, eat and sleep with what they are doing because they have the spirit of "I have to do it" and "It will be done".

As against above, the approach of "I have to do it" and "It will be done" leads to excellence in operations and a more efficient organization as follows ~ "I have to do it" 1. Total commitment to achieving 2. Guaranteeing results to himself with no room for excuses/explanation 3. Ensures stretching of self by unlocking self potential 4. Not accepting any limit on self capabilities full of confidence

Success assured "It will be Done" 1. An approach of "Nothing is impossible" for me

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Company Status in July 2007 As mentioned earlier, I joined the company as Managing Director in July'06 and the organization went through a radical transformation and within a Quarter covered up the substantial gap in profitability and from Qtr 3 06-07 onwards, the company's profitability became at par with competitor as given in figure 2. Figure 2: Performance as of Quarter 3 - FY 07 PCBL has also embarked upon expansion plans through Greenfield projects as well as Brownfield expansion and is now poised to achieve production level of 450,000 MT by June, 2009 to realize its vision. There is also substantial improvement in market perception of PCBL as a reliable and competitive supplier.

Our challenge as leaders is to ultimately ensure that people enjoy what they are doing and they own the dream that we may have as leaders for the company. We need to assume a facilitators' role by assisting the employees in their journey to achieve difficult targets. To facilitate the process of turnaround, one also needs to put in enabling processes like a) Award and Recognition Systems

PBIT (Rs in crores.)

The Company has created substantial wealth for the stake holders and has been ranked No. 11 in The Economic Times survey of the top 100 wealth creators. PCBL received the "Best Corporate Performance" and the "Best TQM Group Activity" Awards in RPG Group for FY'07. Company was also given the SAP ACE 2007 for the best implementation in Chemical Vertical. Ashok Goyal received "Outstanding Achiever Award" for 2006-07 in RPG Group. The PCBL Way Phillips Carbon Black Limited (PCBL) completed the phases of turnaround & consolidation and thereafter embarked upon the growth path within three Quarters which normally requires minimum two to three years.

b) Development of Talent and appropriate skills in employees The Award and Recognition System should be fair, transparent and should necessarily ensure that the Awards are given where the Group values have been properly adhered to. In PCBL we have been stressing on the RPG Core values which are as under • • • • •

Customer Sovereignty Passion for Superior Performance People Orientation Transparency & Integrity Anticipation, Speed and Flexibility

• Innovation and Entrepreneurship PCBL today has a new dream which is the screen saver on the computer of all the employees in the organization World No.6

The Management Team today proudly proclaims

Achieve Quality &

"Way to do it - PCBL Way - The Accelerated Way".

Service Leadership

It will be done The Company now is implementing ambitious expansion plan to move from No.9 position in World to No.6 by 2009. Summary

I have to do it The above enables focusing on the criticality of achieving strategic challenges of "Quality and Service Leadership" and maintaining the spirit of "It will be done" and "I have to do it". November

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BOOK REVIEWS 1. MANAGEMENT OF ORGANIZATIONAL CHANGE: LEVERAGING TRANSFORMATION BY K.HARIGOPAL SECOND EDITION (2006), PUBLISHED BY RESPONSE BOOKS, A DIVISION OF SAGE PUBLICATIONS. Business organizations and change are concepts that have been in the realm of discussion and research ever since management developed as an independent field of study. The development of management studies and its expansion can be attributed to the ever growing and changing pace of business transformation, the pace of which has accelerated after World War II. Triggered and stoked by changing business scenarios due to technological, political and economic forces, resultant intense competition has led to organizations going through the cycle of birth, growth, decay and death. In all these, change remains the common factor. Therefore organizational change is synonymous with organizational activities. Since organizations consist of people, organizational change is predominantly behavioral change. Learning has to precede such a behavioral change. In the present world of hyper competition, management of organizational change is a continuous and ongoing phenomenon. organizations need to master the skills required to manage organizational change as organizational flexibility is the key to success. Therefore the need to understand and manage organizational change is a requirement for practicing managers, students who are future managers and academicians and practicing academicians who intend to unravel the process of change. In the light of such a scenario, a book on management of organizational change seems to be in perspective, although such books are numerous to the extent that books on specific aspects of organizational change are in vogue such as social interaction, learning or informational technology and change. The book under consideration has been purported to have been written to address the needs of students and practicing managers. The author, a widely experienced academician and trainer, has attempted to express in a very simple and lucid manner the conceptual foundations, the systems and processes associated with organizational change and its management. The book is divided into six chapters. The first chapter introduces the reader to the phenomenon at a conceptual level to facilitate his understanding. It covers the meaning, nature and types of change. It also deals with the forces which trigger organizational change. Chapter two and three deal with the concepts and processes associated with planning for change such as strategic planning, management of transformation and role of support systems. Having established the basis for understanding of organizational change; the book, in the next three chapters, deals with the process of management of change. Chapter four deals with the strategic levers which are used to implement change. Chapter five deals with organizational culture and its role in management of change while chapter six deals with the management of change through management of people. The content of the book reflects the background of the author, whose main field of expertise is human resource management, especially conflict management. The book is written in a simple and lucid manner and uses boxes to highlight and stress upon certain key concepts associated with organizational change. It also gives end of the chapter exercises to facilitate skill building for management of organizational change. Although the author uses his experience and case studies to buttress his arguments, yet the book lacks case studies of business organizations which could have given the positioning of the

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concepts in an organizational context and facilitated the understanding of the reader. The book stresses upon the role of people in organizational change yet has not touched the topic of learning in detail. One expects that a book on change management would deal with individual and organizational learning as it is the key lever to manage change especially in the present business environment of hyper competition. Further, the dealing with the concepts and terminology associated with organizational change could have been better had they been linked to the concepts of rate, quantum and volition. The book therefore, gives only the definitions of the terms associated with organizational change but does not put them in a perspective to the other terms commonly used with it. Management of change requires a thorough understanding of the concepts and terms used. Change in mental models of the practitioner is essential if he is to implement organizational change, which requires that conceptual linkages among terms commonly used to communicate knowledge about organizational change are clearly understood. To that extent, the book fails to provide the reader a base to do so. In an attempt to be useful to the practitioner manager and also the trainers and students, the author seems to have lost out on an opportunity to fortify the book with essential case studies and theoretical basis which would have given a much better base for understanding organizational change. Such an effort, if had been done, would have added considerable value to the book. Reviewed by B.V.L. Narayana, FPM fourth year, Business Policy, Indian Institute of Management, Ahmedabad.

2. COMPETING THROUGH KNOWLEDGE: BUILDING A LEARNING ORGANIZATION MADHUKAR SHUKLA, 2002 RESPONSE BOOKS (SAGE PUBLICATIONS), NEW DELHI.PP 334.PRICE IN INDIA -RS 395. Change as they say is universal in creed. In 1997 when Bob Dylan sung the 1960's popular anthem, "Blowing in the Wind" beside Pope John Paul, Pope Benedict opposed it, for he considered Dylan to be "the wrong kind of Prophet". The world since Dylan's era got divided into those on the side and those opposed to such Prophets of Change. For the changing face of corporate America and also for corporates across the globe the answer was indeed blowing in the wind…but it was to be listened to carefully. Those who did, survived and those who didn't, are no more there to tell their tale. Change comes from continuous learning not just by individuals alone, but also by teams and organizations as a whole. As Dr Madhukar Shukla's book on building a learning organization enters its tenth year of its first publication, it time for organizations to take stock of whether they have enough leaders within their organization who are prophets of change and can build a continuously learning organization to make it shine and outperform itself and others in the marketplace. The book is divided into three parts. The first part deals with why organizations need to learn in order to survive and grow. It is supported by innumerable examples from the recent Indian economic history of what brought about the winds of change and how successful organizations listened to the answers (liberalization and globalization) that were blowing in the wind. This part also deals with several theoretical frameworks for learning within organizations. In interesting law that Dr Shukla mentions (in fact first conceptualized by Garratt in 1987) is that for organizations to survive, their rate of learning(L) must be equal to or greater than the rate of change(C) in its environment,i.e. L?C.

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It applies as much to dinosaurs (who probably didn't understand this law) as to contemporary organizations facing equally hostile and turbulent environment. Author provides four important outcomes of learning leading to-innovation, adaptation to change, continuous improvement and corporate transformation. The third chapter contains the various forms of learning such as single loop and double loop learning, and building capabilities to learn. The last chapter in this part of the book highlights how organizations can leverage knowledge to enhance capabilities, by giving several examples like those of float glass technology, competing on proprietary knowledge and so on. One of the most interesting things in this chapter is the 2x2 matrix of knowledge maturation process. There are two dimensions to this matrix. One dimension has knowledge as either explicit or implicit. The other dimension visualizes knowledge as either proprietary or shared. The matrix helps one to understand how knowledge should evolve from tacit to explicit form in order to become useful. Throughout the chapters Dr Shukla has provided lots of examples from various companies from India and from around the world to illustrate the various scenarios in which organizations have transformed themselves successfully. The second part of the book contains 6 case studies on foreign companies. These are, ABB, British Airways (BA), Chaparral Steel, Citicorp, GE and Xerox. Together these cases cover the learning dimensions, namely-Learning as means of organizational turnaround (BA),Chaparral Steel as a learning factory, Citicorp as a company learning to innovate,GE on cultural transformation and Xerox who learns to cope with environmental turbulence. However it would have been much more learning for the Indian readers, if some of the companies were Indian e.g.Infosys, as a learning organization has achieved a lot, on most of the above mentioned dimensions. Similarly Kamini Tubes where employee manage the organization(somewhat similar to Semco,an example cited by Dr Shukla in the last chapter of the book). But if we look at current state of Indian organizations, there are ample examples of such organizations that have defied conventional organizational theories and would have fitted the bill, for these cases. The third and last part of the book contains two chapters on the architecture of a learning organization and the emerging paradigm of learning organization. This part of the book, delves into details of building the new architecture of the learning organization through three elements of the learning mechanism that consists of the strategic intent to learn, learning mechanisms and supporting structures and processes. In this endeavour to unravel the DNA of learning organizations, Prof Shukla has provided an insightful book for HRD consultants, CEO s and senior management. Indeed the book would be a learning exercise even for the practitioners in the top management level, as well as middle managers. Specially insightful are the six cases given in the book. Dr Shukla takes us through the journey of firms through their transformation in all these cases. We only wished that some of these cases should have been of Indian companies' transformation in recent times. The Indian examples have been provided only in form of short snippets in boxes of chapters, on companies like Asian Paints, Ceat, Mahindra & Mahindra, Milton, Mukund Steel, Eicher Tractors, Modi, Videocon and many others. It would have been even more enriching experience for readers had the author provided case or snippets on those organizations who tried learning to transform itself but couldn't succeed. Thus while we learn from inclusion of successful companies, we may lose some potential insights from the exclusion of the failed companies. This lucidly written book presents to the readers, a mosaic composed of academic literature and anecdotal evidence on how to build and sustain a learning organization and make it more competitive based on leveraging intangible assets like knowledge. It also initiates the uninitiated reader into the complicated world of knowledge management. CEO s, leaders and managers with traditional mindset would have their plate full, after reading this book. It is ultimately up to them to become the prophet of change through continuous envisioning and empowerment of their employees. Change - as Dylan sung 40 years ago - is blowing in the wind. You just got to listen to it. Reviewed by: Ramendra Singh, FPM Student, IIM Ahmedabad.

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