Thursday, February 19, 2015

Change in Organizations: Why is it So Hard?

Change isn't easy for most people. It involves risk, taking on the unknown and, often, addressing one's own shortcomings. Change in organizations is not easy either.  On a base level, studies of organizational behavior show that people tend to prefer the status quo, and that they also prefer to avoid losses versus trying to make gains (known as loss aversion).

The real challenges organizations face, however, can be pinpointed to more precise issues. Below are five such challenges and some ways to overcome those barriers to change.
  1. Your organization doesn't understand its needs. An organization's shortfalls may seem obvious on the surface, but getting to the root causes of organizational issues requires a thorough analysis. Strategic planning offers a way for organizations to delve into its strengths, weaknesses, opportunities, and threats. Literature on strategic planning abounds, but your organization can also hire a consultant to help walk you through the strategic planning process.
  2. Change could mean HR complications. Organizational change inherently involves staff; even if they are not directly impacted, nervousness about what change might bring (the unknown) is likely to influence employee morale. Organizations should include employees in their discussions of change; they may bring a perspective of the organization that managers have not thought of. Managers should also consider the impact changes might make on employee roles, salary, and benefits. 
  3. Your Board isn't...well, on board. The relationship an organization has with its Board of Directors is complex; these relationships vary greatly from organization or organization in terms of Board involvement, influence, etc. Including Board members in strategic planning is a good way to get a sense of the organization from a non-management perspective. At the same time, it is important to remember that at the end of the day, an organization's head manager can override Board decisions. 
  4. You don't know if the change is actually working. When instituting change, it is essential to put measurements in place to gauge the impact of those changes. After implementing a new fundraising policy, for example, an organization might measure the increase (if any) on funds raised after three, six, and twelve months into the new policy.
  5. Your resources are lacking. Organizations are all competing for a limited amount of resources. Working together with similar organizations to create a network for change is one way to share resources and decrease silos. Internally, strategic planning will help an organization find areas where spending can be cut or reallocated. 
This list of challenges and possible solutions is by no means exhaustive. It is important to remember that while anticipating barriers to change is essential, it is also necessary to try to predict what the outcomes of various organizational responses to those barriers might be. These predictions will help management choose which path to take in response to challenges. 

Sources:

Cameron, Kim. "Transformational Leadership." Developing Management Skills. New York: Harper Collins, 1991.
Gowdy, Heather. "Convergence:  How Five Trends Will Reshape the Social Sector." The Irving Foundation. Nov. 2009.
Kaplan, Robert and David Norton. "The Balanced Scorecard: Measures that Drive Performance." Harvard Business Review. Jan-Feb 1992. 71-79.
Tregoe, Benjamin and John Zimmerman. "The Challenges of Strategic Management." Top Management Strategy:  What it is and How to Make it Work. Simon & Schuester, NY. 1980. 99-114.

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