Wednesday, February 18, 2015

Out with the Old, In with the New: Change in Organizations

Successful organizations embrace change and encourage innovation. With this in mind, it's surprising that organizational cultures often discourage the actions that lead to such change and innovation. Frankly, change is uncomfortable and innovation requires taking risks. If an organization doesn't actively create an environment in which change and innovation can thrive, it simply won't happen.

Five Ways to Encourage Change in Your Organization:

1. Listen
Strategies for change should not be created behind closed doors or in isolation. Strategic change should be done with market trends in mind and taking into account the perspectives of employees at all levels of the organization. Jack Welch was the CEO of General Electric from 1981 to 2001. During his time in this role, GE's market capitalization rose from $14 billion to more than $400 billion ("The List: CNBC First 25 Rebels, Icons and Leaders"). Of his leadership strategy, he says "Above all else, though, good leaders are open. They go up, down, and around their organization to reach people. They don't stick to the established channels...They make a religion out of being accessible"(Charan). Change is most effective and successful when it is created in consideration of the best interest of the organization as a whole. 

2. Empower Employees
If employees are weighed down by micromanagement and adherence to procedure, there is little room for innovation and improvement. Empowered employees are encouraged to develop improved processes and find ways that the organization can do better. Welch increased beyond the industry average the number of employees that each manager is responsible for leading. He says, "With 10 or 15 reports, a leader can focus only on the big important issues, not on minutiae" (Charan). This arrangement empowers both employees and managers to focus on the big picture and make positive change when needed.

3. Encourage Risk-Taking
Some of the most important changes in an organization are made in uncharted territory. They are risks, and the possibility of failure is real. However, to move beyond mediocrity and into a truly innovative organization, taking risks is necessary. Encourage employees to try new things and don't disregard an idea because it's different from the way things have always been done. Management and Organizations scholar, Kim Cameron, encourages organizations to adopt a philosophy in which, "Improvement is the standard to be rewarded, not just doing the job correctly" (Cameron).

4. Implement "Change-Friendly" Management
Even the best ideas for change can get lost in a bureaucratic environment. Employees' ideas for change may never reach the organization's leadership. Leadership's ideas for change may be misconstrued or watered down by the time they are relayed to lower-level employees. Cameron recommends creating a flatter management structure which will foster accessibility and a more rapid response time to new ideas (Cameron).

5. Articulate a Vision
Having a clear vision is helpful for encouraging innovation or implementing a new initiative. Forming this vision should involve creating a strategic plan with input from a range of organizational voices. After this vision is created, leadership should generate commitment and seek to institutionalize the principles set forth by the new initiative (Cameron).

1. Cameron, Kim. 1991. "Transformational Leadership." In Developing Management Skills. David A. Whetton and Kim S. 
Cameron. New York: Harper Collins.2. Charan, Ram and Noel Tichy. 1989. "Speed, Simplicity, Self-Confidence: An Interview with Jack Welch." Harvard Business Review. No. 89513:110-120
3. "The List: CNBC First 25 Rebels, Icons and Leaders." CNBC.