Monday, May 23, 2011

Core Values and Organizational Change (Theory and Practice)


Adapting market environment is becoming more and more important for business survival in this turbulent climate.  Unfortunately, organizations very often face a lot of challenges when adjustingtheir operations in order to cope with the competitive environment.  Most of these challenges are emotional, rather than technical issues.  In reality, new strategic or operation plans can be very logical and business sound on paper, human factors can still tear these plans apart. Therefore, change processes are very complex and dynamic activities with unpredictable outcomes.

A book titled Core Values and Organizational Change Theory and Practice provides very compelling arguments and systemic methods to tackle the human issues during change processes. The book starts from highly academic arguments about the philosophies of business management: modernism, status quo thinking and postmodernism.  These three philosophies have a fundamental impact on how a management may approach the change processes as shown below:

The first and second waves of change are dictated by modernism and status quo thinking. The traditional and developmental changes assume that the management knows the best way to run the business. Naturally, decisions and communication are from top to down. The division between the management and employees are obvious in the processes.
The major problem of these two waves of change is the communication gap between management and employees. In most cases, the management often say one thing and employees hear different thing. As the diagram shown below, both parties have their own individual filters to encode and decode messages from outside.  
Whereas, the third wave of change focuses on solving this communication gap. It embraces the postmodernist thinking of multi-realities. Management and employees construct their own realities based on their perception of the workplaces. Too often, they operate in two different realities as shown below:
The above figure shows that organizations are controlled by both management and employees. This challenges the traditional thinking whereby managers have total control of their organizations. The authors state that managers often are managing in the myths and living in their dreams. If you need any real life examples, please go to watch the television show,  Undercover Boss.
Recognizing managers and the employees’ worlds, and merging them isthe key to achieving sustainable organizational changes.  But how do we start? The authors suggest that we should start from recognizing values which are held by management and employees.
What are values though? The authors define “values are amongst the most stable and enduring characteristics of individuals. They are the basis for crucial decisions, life-directions and personal tastes.” Values have nothing to do with money. They are deepest and strongest motivations to drive individuals to do what they do. Most importantly, values are almost impossible to be changed in a short period of time. Imagine you change your personal characters and behaviors next day when you wake up. You will know how hard it is to remain in your transformed state. Therefore, changing values is the very last resolve.
The Management has a responsibility to recognize values from both managers and employees’ world.  This can be achieved by active listening to their stories and metaphors about their work. Of course, it is much harder than it seems, because managers are already operating in their own world. Bringing external  help would be very effective at this stage.
Once the values from both worlds are recognized, employees and managers need to look for shared values from the results. The ideal number of shared values is three. It is called core values. Why the magic number three? Because it is easy to remember, it is impossible to go through six and seven values to make a decision. It is just impractical.
As every business practitioner knows that organizations cannot survive without considering their customers. Therefore, managers and employees need to incorporate customer values in their core values as well as shown below:

A study case from the book demonstrates how core values impact on business practices. American Linen and Supply Company (ALSCO) worked with the authors at the Melbourne branch. They wanted to use the core value method to change their company’sdirection. Their core values emerged after a series of workshop with the management and employees. They were: Customer Commitment, Care for Our People and Achieving Our Goals.
The ALSCO regional general manager, Russell Spear saidthat “these core values are now etched into the forehead and what we do on a day to day basis is identifiable with them. At our most recent General Manager gets together where one of the agenda items was the recognition of the most outstanding performers and Branches in our operation, the entire decision-making process was based on the core values and the individuals/branches performance in marching those core values.”
Core Values and Organizational Change Theory and Practice is a essential book for managers who want to make a different for their companies. Most importantly, it gives you clues to creating a more meaningful environment for your workforce.

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