Organisational change is something that occurs throughout an organisation’s life cycle and effects the entire organisation rather than one part of it. Employing a new person is one example. Change is increasing due to a number of forces including globalisation led by rapidly advancing technologies, cultural diversity, environmental resources and the economy; therefore the ability to recognise the need for change as well as implement change strategies effectively, in a proactive response to internal and external pressures is essential to organisational performance.
Internal changes can include organisational structure, process and HR requirements and external changes involve government legislation, competitor movements and customer demand (Wood et al, 2010).
Change does not need to be a painful process, as it may seem when observing the amount of failed change management initiatives with reports as low as 10% of researched success rates (Oakland & Tanner, 2007), when successful change management strategies are utilised and planned, including effective communication strategies, operational alignment, readiness to change and implementation, which all lower and overcome resistance (Wood et al, 2010).
There is a great amount of literature on the negative aspects and difficult management with employees resisting change, however Wood et al (2010) challenge this notion by questioning the change management process as people do not resist change itself but aspects of the change that affects them personally such as fear of the unknown, status, remuneration and comfort. Resistance to these changes is a healthy reaction and can be managed effectively in the beginning by ensuring communication and using one of the change initiatives described here.
Background Information Truelocal is based in Sydney, with small sales branches in Brisbane and Melbourne. It employs over 150 staff, an increase of approximately 50% over the past two years. It was founded in 2005 by NDM as part of an expanding operation of online websites to provide across the board consumer services, including news and magazine websites; online sport and weather information; and shopping comparison search engine, web-based recruitment, and travel search engine solutions [http://www. ewsdigitalmedia. com. au, accessed 25/08/2010]. As the world shifted into what is often referred to as the ‘digital info age’, consumer demand for online media as a way to source information significantly increased and demand for printed media decreased putting pressure on newspaper companies to expand to producing news and information online in digital format. This included News Corporation which decreased its newspaper operations and increased its digital expansion.
As an employee at Truelocal for over six years, I have acquired this information presented here through interviews with management, company information and my own observations internally within the organisation’s sales department working in the roles of sales executive, account manager and senior retention account manager. The Need for Change – Management & Structure Truelocal needed to align its culture, values and structure with the parent company in order to meet strategic growth goals not long after it was founded. Wood et al (2010) describe the work of an author, Noel Tichey on managing strategic change.
Experts use three fundamental sets of change in their approach; technical design, political allocation and culture/ideological mix problems. It is one of these problems that become a pressing issue at any one time of which then initiates the change. In Truelocal’s case there were a number of changes evolving and at this time it was culture problems. NDM has been growing in size since its establishment in 2006 with a number of acquired website operations, each operating as a separate business unit with the support of HR, Finance, IT, Commercial Operations and other support services provided by the parent company (NDM).
A decision was made to align the organisation in terms of operations, culture and strategy so it could concentrate on innovation and performance to achieve its goal of becoming the number one provider of online information in Australia. As a result NDM redesigned its organisational structure as Truelocal and most of the other business units merged together in one location. Not long after this relocation, Truelocal began flattening out the company structure lead by a new management team and CEO.
It has since been under constant change to achieve it’s goal to continue growth (both in number of staff and performance) and excel as a high performing and innovative company with an agenda of being the second largest online directory service in Australia after it’s competitor Sensis (Yellow pages online). Wood et al (2010) explain the performance gap is a desire to move from one less desired state to another. This can be seen by the increased performance after the change occurred and culture change was implemented. What changed
Fundamental changes that occurred were a shift from the existing vertical, bureaucratic structure to a horizontal structure and change in specialist functioning of divisions creating a professional, corporate environmental culture that was customer focused. The existing culture was a casual attitude towards dress requirements, starting and finishing times, breaks, informal communication expression and channels and many staff were employed as friends of existing staff rather than based on competency and job skills. Some managers had their partners working for them and a few were family members.
There didn’t appear to be any dress code and people came and left work at varying times. Additionally management employed more skilled staff, retrained existing staff and created processes of which procedures were then put in place. One of the ways these objectives were achieved was by the reduction of management layers resulting in more direct reporting. Wood et al (2010) explain as organisational size increases, the more interconnections and less direct communication between people takes place (Wood et al, 2010). Change Process
When management at Truelocal uplifted existing management and reporting structures, staffs were initially left without direction, reporting channels, processes and goals were not clearly communicated causing a lot of uncertainty. Consequently many staff resigned as they felt upset and confused about what was happening. Truelocal however, retained some of the more experienced staff with new career development propositions and new managers were encouraging and open about future improvements that were to take place within the organisation.
One of the ways Truelocal could have managed this change is by using the Freeze/Unfreeze concept; Wood et al (2010) explains Kurt Lewin, a famous organisational Psychologist’s three-force phase, which is needed for any organisation to be motivated to bring about the change of which are; 1) Unfreezing focuses on preparing people for change. This is a critical part of the change phase prior to implementation by analysing and influencing resistance and need to change. A common tool that is used at this stage is called Force Field Analysis, this measures these forces. ) Changing of people; tasks; structure; technology. Ideally the organisation will be completely unfrozen, ready for change and its goals made clear. It is recommended that staff are not perceived to have a sense of high or low security at this stage in order to avoid resistance. 3) Refreezing is the evaluation and reinforcement of the changes that took place. The new managers were recruited by Truelocal for their experience in organisational transformation within the type of professional, high performing, corporate environment the organisation desired and who worked at their competitor company.
These managers were expected to manage the entire change process themselves. Change agents are people or groups who take responsibility for the change of behaviours and existing patterns in a supportive manner (Wood et al, 2010). The perceived risks however, are the responsibility of the organisation’s leader who decides on the direction of the change (Oakland & Tanner, 2007). Planned changes that took place were; Structure – change in organisational design by reporting systems, operational processes and size of teams, while roles were redefined by definition, job title and remuneration.
Tasks – Most jobs were redesigned including more responsibility for staff in management roles and multi functional tasks for other staff. One of these job designs is called job enrichment, which is the increase and deepening of motivating factors built into a job (Wood et al, 2010). Some of these enrichments used by new management were increased responsibility and accountability, less control and more freedom in the job and more recognition.
People – improvement of recruitment and selection process by advertising formal job vacancies on the organization’s intranet and incentives for staff to nominate candidates who were then formally interviewed by a number of managers. Additionally training sessions for new staff, coaching and certification courses were made available. Carless (2005) describes her research on the compatibility of job-person-organisation-environment fit. She believes a person must assess their attributes and personality with the job and organisational characteristics, which is likely to improve job satisfaction and adjustment to the environment.
Culture – organisational values and beliefs were communicated from the parent company of which staff was rewarded when their behaviour displayed these values. Recognition was given in addition at meetings and performance appraisals. This is the observable culture, however as Wood et al (2010) explain, shared meanings and stories are other powerful aspects of culture and this can be observed at Truelocal by the high turnover of staff by both stories and norms that communicate the need to work hard to perform in the job or leave. Cultural symbols include trophies for ‘employee of the month’ awarded to the highest performer.
These symbols serve to transmit cultural meaning (Wood et al, 2010). In the sales department a large subculture can be observed. Wood et al (2010) explain strong subcultures are often found in high performance task forces where people share similar values and backgrounds. This subculture included men between the ages of 22-30 yrs that have no formal education, drink alcohol excessively, and are passionate about technology, highly materialistic and view women as sex objects, which can often be observed by their language and behaviour.
Moreover this culture is likely to be influenced by the national culture of which the organisation is embedded (Wood et al, 2010). In fact this subculture existed in the old culture before the restructure of which the company held ‘diversity training’ focused on discrimination and fairness within the workplace resulting in terminations. According to The Economist (2008), in the economic downturn companies need ‘Generation Y’ as hungry 25-35 year olds without commitment, for marketing and product innovation with emerging technologies, able to put in the time and energy to help them deal with recession hazards, especially in sales.
Strategy – operations and planning were clarified at monthly and quarterly meetings including product changes. These were addressed by department managers regularly and CEO meetings irregularly, to engage staff. Wood et al (2010) explain leadership has changed from the traditional trait and behaviour approaches to transformational, charismatic, visionary focus and is separate from management. The leadership team at Truelocal formally includes the CEO and parent company (NDM) leaders.
Their leadership function can be observed by their language and behaviours they use a transformational and visionary change approach. Objectives – specific performance targets were set allowing staff to earn a higher commission by overachieving set targets, recognition and prizes to increase motivation consistently. Purpose – both the CEO and the parent company made organisational goals clearly communicated vision and clarified progress regularly. Recognition was given for the contribution of each department and each business unit to the overall success of the organisation.
These changes were managed by senior staff using a combination of change strategy approaches as explained by Wood et al (2010) that include a forced approach of top down command, one way communication, coercive reward and punishment approach, rationalisation approach and shared decision making, empowered approach. Of these approaches no single approach was concluded best by researchers on organisational change and it is advised that more commonly a combination will occur, however guidelines are offered to change agents and managers (Wood et al, 2010); – consider use of expert consultants – communicate the need for change feedback from employees – avoid changing for the sake of change – study organisational change and structures From this perspective Truelocal management took the right approach by varying the way they managed the change. Change Results The facilitation of clearer and faster communication channels enabled staff to work more efficiently and get things done faster, along with improved technology. Further benefits of this structure were people collaborating in teams, using initiative and increased spontaneous communication while rules, procedures and close supervision were reduced as described in (Tushman, Anderson & O’Reilly, 1997).
Wood et al (2010) describe the matrix structure is common in large organisations wanting to improve customer responsiveness. Truelocal’s reporting structure utilised this organisational design as part of the change, for example the finance manager reports to the CEO of Truelocal and to the Commercial Director of NDM, however Wood et al (2010) note each organisation’s structure is unique and there is no single observed design. This change is described by Wood et al (2010) as radical. Radical changes are fundamental reorientations and transformational, often initiated by the arrival of a new CEO.
Culture & Performance Change Since the change occurred, Truelocal’s sales department recorded a growth rate of 15% per full time employee (FTE). Some strategies used were; – Performance appraisal review (PAR) – staff are asked to grade themselves on their performance and their use of company values of which are discussed by their managers. For example one of the values is ‘Impact’ and an employee is asked how much impact they contributed to the organisation since the last performance review and they are required to give examples of this behaviour. These PARs are held quarterly and annually. Reward and remuneration – staff are given targets according to their job level and experience with incentives to over achieve. These targets are called Key Performance Indicators (KPIs). The person’s job is broken into task components of which each component consists of a target behaviour that is rewarded. Remuneration is based on the overall percentage of KPI achievement. – Recognition – employee of the month award was created by encouraging staff to use an online submission for their preferred co-worker who had gone over and above their job requirement displaying one of the company values.
In addition the company awards the sales department with the person with the highest dollar value in sales and yearly a larger reward of which one year was a new car. Similarly a newsletter recognises new sales people who achieve early in their job. All of these reinforcements are called extrinsic which are rewards given to someone by another person’s valued outcome and because they are environmentally impactful are valued in influencing behaviour through the law of effect (Wood et al, 2010). Cultural change can take years according to Wood et al (2010); however effective cultural change strategies can be used to shorten the timeframe.
One of which is explained by Oakland & Tanner (2007), it is important to align the culture to support the desired change in behaviour. For example Truelocal needed a professional, customer focused culture which required staff to develop professional skills and behaviour. The result was all departments undertook a full training programme designed to increase awareness in communication, with a focus on questioning and empathy. Conclusion Truelocal is a young company and part of the larger and still relatively new parent organisation, NDM, operating under the global News Corporation.
The industry it operates in, digital media is one of the fastest growing and changing environments globally. It changed from a structure and culture of casual, unprofessional work practices managed within a more bureaucratic structure that was under performing to a transformational, high performing, innovative and professional culture that is customer focused. Truelocal achieved its goal of growth, productivity and change in culture, however many staff were lost in the process and not much planning appeared to be in place.
It is unclear as to the lack of planning, communication or use of external consultant in the case of radical change that occurred. One assumption might be due to budgetary restrictions as the company has been running at a loss since it started, reporting a loss this year of over one hundred million. Apart from the successful change management strategies that were used by the change agents, in particular the motivational strategies used by nominated change managers, numerous other approaches were identified that may benefit the organisation for managing future changes more effectively.
Reference List Carless, S. A. (2005). Person-job fit versus person-organisation fit as predictors of organisational attraction and job acceptance intentions: a longitudinal study. Journal of Occupational and Organisational Psychology. 78 (3), 411-429. Generation Y goes to work (2008, December 30). The Economist (US). Retrieved from http://www. economist. com/business/displaystory. cfm? story_id=12863573 Oakland, J. S. , & Tanner, S. (2007). Successful change management. Total Quality Management, 18 (1-2), 1-19.
Tushman, M. L. , Anderson, P. C. & O’Reilly, C. (1997). Technology cycles, innovation streams and ambidextrous organisations: organisaiton renewal through innovation streams and strategic change. Managing strategic innovation and change. Oxford University Press, NY. 2-23. Wood, J, Zeffane, R. , Fromholtz M. , Wiesner R. , Creed A. , Schermerhorn J. , Hunt J. , & Osborn R. , (2010). Organisational Behaviour, Core concepts & applications. 2nd Ed. John Wiley & Sons, Australia, Ltd. Milton Qld.
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