ORGANIZATIONAL TRANSFORMATION ...!!!

ORGANIZATIONAL TRANSFORMATION

Transformation, according to Webster’s Dictionary, is: ‘A change in the shape, structure, and nature of something’. Organizational transformation strategies are concerned with the development of programmes that will ensure that the organization responds strategically to new demands and continue to function effectively in the dynamic environment in which it operates.

Organizational transformation strategic plans may involve radical changes to the structure, culture and processes of the organization – the way it looks at the world. This may be in response to competitive pressures, mergers, acquisitions, investments, disinvestments, changes in technology, product lines, markets, cost reduction exercises and decisions to downsize or outsource work. Transformational change may be forced on an organization by investors or government decisions. It may be initiated by a new chief executive and top management team with a remit to ‘turn round’ the business.

Transformational change strategies involve planning and implementing significant and far-reaching developments in corporate structures and organization-wide processes. The change is neither incremental (bit by bit) nor transactional (concerned solely with systems and procedures).

Transactional change, according to Pascale (1990), is merely concerned with the alteration of ways in which the organization does business and people interact with one another on a day-to-day basis and ‘is effective when what you want is more of what you’ve already got’. He advocates a ‘discontinuous improvement in capability’ and this he describes as transformation.

A distinction can also be made between first-order and second-order transformational development. First-order development is concerned with changes to the ways in which particular parts of the organization function.

Second-order change aims to make an impact on the whole organization.

Types of transformational strategies

Four strategies for transformational change have been identified by Beckhard (1989):

1. A change in what drives the organization – for example, a change from being production driven to being market driven would be transformational;

2. A fundamental change in the relationships between or among organizational parts – for example, decentralization;

3. A major change in the ways of doing work – for example, the introduction of new technology such as computer-integrated manufacturing;

4. A basic, cultural change in norms, values or research systems – for example, developing a customer-focused culture.

Transformation through leadership

Transformation programmes are led from the top within the organization.

They do not rely on an external ‘change agent’ as did traditional OD interventions, although specialist external advice might be obtained on aspects of the transformation such as strategic planning, reorganization or developing new reward processes.

The prerequisite for a successful programme is the presence of a transformational leader who, as defined by Burns (1978), motivates others to strive for higher-order goals rather than merely short-term interest. Transformational leaders go beyond dealing with day-to-day management problems; they commit people to action and focus on the development of new levels of awareness of where the future lies, and commitment to achieving that future. Burns contrasts transformational leaders with transactional leaders, who operate by building up a network of interpersonal transactions in a stable situation and who enlist compliance rather than commitment through the reward system and the exercise of authority and power. Transactional leaders may be good at dealing with here-and-now problems but they will not provide the vision required to transform the future.

Managing the transition

Strategies need to be developed for managing the transition from where the organization is to where the organization wants to be. This is the critical part of a transformation programme. It is during the transition period of getting from here to there that change takes place. Transition management starts from a definition of the future state and a diagnosis of the present state. It is then necessary to define what has to be done to achieve the transformation.

This means deciding on the new processes, systems, procedures, structures, products and markets to be developed. Having defined these, the work can be programmed and the resources required (people, money, equipment and time) can be defined. The strategic plan for managing the transition should include provisions for involving people in the process and for communicating to them about what is happening, why it is happening and how it will affect them. Clearly the aims are to get as many people as possible committed to the change.