Organisational Change:
New Approaches and Role of CEOs

By

Prof. R.K. Gupta
BE Hons MBA FIE FIMA
Professor of Management
Aravali Institute of Management
Jodhpur
E-mail: cityju@rediffmail.com
 

This article is an attempt to review and synthesize:

1. 'Hot spots' by Lynda Graytton

2. 'Viral Change' by Leandro Herrero, and

3. The author's hands on experience in attempting to galvanize workplace environments in diverse industry and services in Indian context.

In present complex business environment and multi dimensional forces working from within and from outside the organizations, to trigger positive forces and to involve diverse work teams on a sustainable basis are major challenges that is easy said than implemented on ground.

Several factors are encountered, some of which are startling and some are so straight and simple:

1. The speed at which change is desired and effected- A slow process vs. fast and spontaneous environment.

2. The quality and training of CEO. I have often found the CEO and top management being the biggest stumbling blocks in galvanizing the work environment based on their habits, lack of vision, egotism (not ego) and trying to dictate rather than direct the teams. Lack of trust in capability and commitment of others is also found to be a major disabling factor.

3. Receptivity of team members

4. Organizational and people inertia also called comfort zone, habits and mindset

5. Communication quality- both vertical and horizontal

6. Ability to surcharge the atmosphere with excitement and expectations that become habit of organizational teams.

7. Common visible goals to reach

8. Management of reward

According to Lynda Gratton: When energy flares between people; when cooperation flourishes and ideas become contagious; when work is exciting, new possibilities appear and innovation happens…That is a Hot Spot, and it has the power to propel teams towards goals they never believed were achievable.

Whereas Dr Herrero says viral change is alternative to slow painful and unsuccessful management of change in organizations. His proposition is about how a small number of people can initiate a small set of behaviors that could bring about sustainable change.

The Tipping Points

Before discussing about Herrero's  theiry it is important to udnerstand what is meant by Tipping Point.

Malcolm Gladwell in his book The Tipping Point: How Little Things Can Make a Big Difference says:

Tipping points are "the levels at which the momentum for change becomes unstoppable. Gladwell defines a tipping point as a sociological term, "the moment of critical mass, the threshold, the boiling point. The book seeks to explain and describe enormous and "mysterious" sociological changes that mark everyday life. As Gladwell states, "Ideas and products and messages and behaviors spread like viruses do." The examples of such changes in his book include the rise in popularity and sales of Hush Puppies shoes in the mid-1990s and the dramatic drop in the New York City crime rate in the late 1990s.

The three rules of this epidemic are: The Law of the Few; the Stickiness Factor and the Power of Context

The term Tipping point describes a point at which a slow gradual change becomes irreversible and then proceeds with gathering pace. It is derived from the metaphor of a rigid solid object being tilted to a point where it begins to topple ( Source: Wikipedia).

The viral change

According to Dr Herrero, the infectious power of a new behavior that eventually leads to major organizational change depends on three factors:

- The contact between infective people and the receptive people

- The number of people interacting that can create a critical mass as defined by Gladwell and finally,

- Enough people with low threshold for adoption who will probably just copy or mirror the new behavior from another colleague or small group.

The people one can choose from to achieve viral change in organizations are as below:

- Movers, shakers and activists;

- Mirrors-the 'look at them' guys;

- 'Super Nodes: having extensive links with everybody and seem to navigate the organization with clear knowledge of its hidden map. And,

- Simply healthy restless people: that is a mixture of frustration and commitment to make things better, to change.

The concept of viral change blows out the conventional management assumptions about "resistance to change" and "slow and painful cultural change". It also antagonizes the established conviction that communication to involve all is necessary for change. It is not so. As small portion of organization is highly connected and of high influence and can be reached directly instead of attempting to involve and communicate to all. Instead of new processes bringing in new behaviors, we must place new behaviors first to support new processes and systems. It also suggests that non-normative people often make good champions of viral change. In all 15 assumptions are challenged by the concept of viral change by the author Dr Herrero.

The hotspot organizations

In Hot Spots, Lynda Gratton examines organizations that have already "emerged" into the new "hot" state of productivity and innovation. Hot Spots are about those very different scenarios of corporate success that offer viable solutions for continuous innovation, employee engagement, and a flexible architecture of a sustainable enterprise of the future.

Hot Spots can be workplaces, teams, departments, companies, factories, cities, industries, coffee shops, hallways, conferences - any place or time where people are working together in exceptionally creative and collaborative ways.

They are the most marvelous creators of value for organizations and wonderful, life enhancing phenomena for each of us. Hot spots should not be attempted to be imposed. They can't be. These are spontaneous under enabling conditions.

The energy contained in a Hot Spot is essentially a combination of its individual energy with the addition of the relational energy generated between them, hence the importance of:

1. Having a "cooperative mindset."

2. Identifying "boundary spanners."

3. Sharing "igniting purpose."

4. Sustaining sufficient "productive capacity."

These four conditions must be supported by five underlying productive practices:

Appreciating talent; Making commitments; resolving conflicts; synchronizing time and, establishing a rhythm.

Her key formula:

Hot Spots = (Cooperative Mindset x Boundary Spanning x Igniting Purpose) x Productive Capacity.

Gratton examines multiple ways to foster a cooperative mindset, remove boundaries between people, give them a sense of purpose, and increase their productive capacity, drawing on examples from organizations like BP and Nokia.

So, if innovation is what defines success, we now have to start creating a language, a set of practices, and a set of processes about being cooperative. For most companies, it turns out that cooperation is more difficult than competition.

The first thing companies need to do, is to stop recruiting people who are very aggressive, and who are going to destroy those democratic norms. Second, companies need to stop creating reward systems that reinforce competitive behavior and distort the necessary collaboration processes. In other words, the organizations that want to be cooperative have to enrich their current transactional processes with relational processes and make sure they select the right talent.

The process consists of five phases:

1. Locating Hot Spots;

2. Mapping the system;

3. Linking to business goals;

4. Identifying potential leverage points; and

5. Taking action.

She concludes that in spite of all rules and clever designs, Hot Spots cannot be willed or engineered. They emerge and flourish sometimes in the most unexpected places. To be a leader for Hot Spots means to create the right circumstances for them to come to life without institutionalizing them.

While we can't create or engineer hot spots we sure can kill the chances of these emerging in organizations

The role of CEOs and problems

The role of CEOs is thus important in this. It is often seen by me in practice that when attempt is made to change the convention the owners or CEOs are the first to resist new approaches especially if it comes from below. The CEOs also suffer from complex of not being able to delegate due to insecurity, lack of confidence or due to distrust in team members or overrating themselves. They often try to dictate rather than direct and are often main opponents to new initiatives and practices.

Some of the reasons identified are:

Egotism (as distinct from ego) and Megalomania: That many CEOs suffer from, especially those with decorative degrees or from previous hierarchical or quick success background.

Often CEOs end up with habit forming routines, accumulate a coterie of sycophants, inadequately qualified or outdated members in their team from which they draw false sense of security, superiority and ego satisfaction. The CEOs should be aware of such weaknesses and the cognitive biases that employees and top management themselves carry with them which are hard to detect and even difficult to change after detection. It is often found that CEOs try to curb and discourage the 'Movers' and 'Super Node members' of team.

One sure way to enable chances of hot spots generating and viral changes taking place in organizations (so they reach tipping points in various areas of activities and goals) is to dramatize the work environment; something that forces people to join the excitement, anticipation of achievements and growth. A glimpse of this is seen in processes of TPM the total productivity management. For this purpose the employees having worked in growth oriented and successful organizations with diverse work experience and having element of restlessness are desirable rather than the compartmentalized and run of the mill employees stuck in same organization for long. Such members of organizations should be put in nodal points to kick start synergies and action for change in organization.

The innovative and fast changes can be effected by technological leadership, commitment to innovate and improve services continuously.

A collective reward sharing and recognition system (not individual) has to be built in to support innovative and super charged atmosphere on long term basis.
 

Prof. R.K. Gupta
BE Hons MBA FIE FIMA
Professor of Management
Aravali Institute of Management
Jodhpur
E-mail: cityju@rediffmail.com
 

Source: E-mail May 1, 2008

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