The Role of the Leader - Article Example

All changes great or small exploring approaches to change and its leadership – Malcolm Higgs and Deborah Rowland 2005. The Critique The Higgs and Rowland have attempted to present a case for change management with the opening argument that 70% of change attempts are failures and have aimed at proving that the failure of the leadership is the main reason for this result. They interviewed 40 leaders from 7 Industries who provided 70 tales of successes and failures. The result found by them in this empirical study indicated that leadership behaviours were the causes of the results and they have categorised them into three identifiable traits. These are named by them as a) shaping behaviours, b) framing change and c) creating capacity. The authors further concluded that those changes that were linear, meaning developed sequentially from the obvious without in-depth understanding, resulted in failure. The successful were the ones that were complex and dealt with accordingly. The authors also accepted the fact that this study was limited in nature and could not be said to be conclusive but indicative of trends and was made for the reason that it will arouse enough interest to warrant further investigation in the cause of change management and the leadership roles played in it. The authors relied heavily on the existing literature of change management citing to lay the foundation that 70% of changes were failures. They proceeded to say that the managers of today were incapable of understanding change methodologies or even the theories of change. They have mentioned a host of authors on the subject of this conception that managers assume that change is a straight forward process and treat it in this fashion leading to disastrous results. They then progress to mention authors who have challenged this linear assumptions stating that changes are more complex in nature and that some others who offered tools to the managers for handling complexity. A further diversification of this belief stated that even the more complex approach cannot be applied uniformly and that results always varied from case to case. Empirical evidence also points towards failure in top-down changes, with unpredictable outcomes. Attempts have been made to control this by offering further tools to guide managements in complex situations, but to no avail. Proceeding further on these lines complexity was further dissected with the help of new sciences and the complicated model versus the complex models were discussed. The evolutionary theory was also applied to organisational transformation for drawing an important distinction between complicated systems and complex systems. It was found that managers tend to view problems in a simple linear fashion as they are trained to do so and are incapable of handling dilemmas as a result they fail to resolve complexities which give rise to these dilemmas. The authors identify three models of evolution: natural selection; probability; and complexity. Another variation is a proposal to divide this evolutionary transformation into variation, selection and retention. With slight change in interpretation the argument is that this change brings in new precepts and habits transmitted verbally or picked up through imitating actions. It was also said to be a change of new strategic memes or habits replacing old ones. It was further found that changes occour at the periphery thereby meaning at the lowest rung of employees. All of the authors however believe that these complexities do not lead to linear models and they happen by themselves without the need of a leader. All these authors and many more agree that changes are best begun within the system itself without need of intervention from the top. Such changes are less disruptive and new order or new behaviour emerges as a result. It was pointed out that the methods of such practices are observation, sensing, envisioning and execution. Having said this there are diametrically opposite views by others who finds no relevance at all between the scientific models and change. The literature review has left the authors, Higgs and Rowland, with no conclusive evidence of how changes take place or what is the prime mover of change. They have therefore converged on the role of the leader as the pivot and compeller of change. Not delving into the vast pool of literature on leadership issues they have shown that it is the leader who is the central figure in any change and his behaviour sets the pattern and gives direction to the change and the efforts related with it. The behaviour is different in differing circumstances but they lament the lack of empirical evidence to prove this with conviction. This has led them to frame the question of how and what behaviours and competency of the leaders result in successful change. They identify five important issues that lead to successful changes which have been summed up by them as (1) Creating the case for change (2) Creating structural change (3) Engaging others in the whole change process and building commitment. (4) Implementing and sustaining changes. (5) Facilitating and developing capability. It needs to be pointed out that this was already well elaborated earlier as Criteria for Change by (Cummings T.G. & Worley, C.G. 1997) and explained below Motivation Topmost in handling change is to motivate the people to achieve the purpose of the change. This means highlighting the glorious future and contrasting it with the disgraceful past. However it has to be conveyed positively with rewards accompanying results. Effective communication will be required to generate support and participation at all levels. Teamwork and togetherness is the core issue here. Some amount of pressure is to be built up for this to show the benefits of change. To bring about active involvements in the procedure the employees have to be given a vision of the future. Creating a Vision The idea is to create synergies for higher productivity and more concentrated efforts by cutting inefficiencies in order to develop competencies. The vision requires standing up for fair practices with genuine efforts backed by world class products and to inform the customers that they could depend upon products that measured up to the best standards in the world. The objectives are the values the vision creates and the value features are the consistent commitment to quality and service to be provided to the customers. Developing Political Support For the change to be effective and for the realization of the company vision it is imperative that all the stakeholders support the various steps all along the way. The attempts have to be genuine and in common interest for benefits all round. The primary requirement is to have the knowledge of all sources of power in the company and to harness them and motivate them to work for a common goal. The ideal is to get them to agree on and obtain a consensus to avoid sudden conflicts of interest midway between any initiatives. The personalities involved are diverse which means that they have to be handled individually according to the status and mental make-up of individuals, but they have to be brought around to common and mutual understanding and respect. It is often possible by straight talk and sincerity is the best method; but often the goals are to be achieved through use of social networks or by adopting certain circumventions. Whatever the methods that may be employed, this aspect needs a constant and effective open communication channel to overcome any roadblock during the transition period. Managing Transition In continuation of the change policies the change manager needs to plan activities that will involve the stakeholders to see through the transition period. These activities have to be practical and oriented towards achieving the targets as set out in the vision statements and need to be understood with clarity by the stakeholders performing them. The must know and feel that this is their vital and positive contribution that will result in realizations of larger goals. The activities have to be planned carefully and there should be a commitment by both the planner and the stakeholder to plan and perform respectively. Planning also entails dividing the tasks to teams and individuals towards a common objective to give the exercise a momentum that increases as the change process evolves. Sustaining Momentum In order to finally achieve the targets momentum of change efforts need to be sustained and it is the management’s job to provide the financial, human and technological supports to keep it going. These are vital inputs that enable the teams and individual to rise up to the occasion, perform and deliver. Often emotional and psychological supports are also required to maintain or increase the morale and timely appreciations or rewards go a long way to motivate people. On the way people develop new skills and reach higher competency levels and both should be recognised early and suitably compensated. This will bring a radical change in the behaviour of the people and when this happens, finally the change can be considered to have been achieved. Indeed all above are the areas where the leadership influence is evident. The authors then conduct a research, referred to earlier in this essay, of successful leaders in search of the formula for success. They again delved into the literature of methods to be employed for such a research and emerged with the idea that a collaborative case study was the best way to bring out the role of the leaders in change management. They therefore finally conducted the study through interviews and then analysed the data both quantitatively and qualitatively to arrive at the above conclusions. Without doubt the role of the Leader is critical in any change program. It is the top management under the leadership of the CEO who decide the strategies for obtaining competitive advantage. It is the function of the CEO to supervise the activities and initiate the programs to bring about the changes that are required in the actualization of the vision stated in the strategy. Indeed David Nadler and Michael Tushman (1990) suggest institutionalization of this leadership responsibility right through the management system. They suggest that entire senior management team should share the responsibility of creating and communicating the new vision to the whole organization. There are some typical leadership behaviour patterns that are very critical to change programs. Jerry Porras and Susan Hoffer (1986) opine that open communication meaning sharing of intentions; listening and collaborating through making team decisions were most relevant for success in organizational development efforts. Similar conclusion was drawn by Teresa Covin and Ralph Kilmann (1990) when they surveyed several individuals. They noted two more traits of leaders. One, that they demonstrated discernible and unfailing support for the change programs, and secondly, they related the change to business needs. This calls for building of teams towards the effort and communicating the expected results in terms of profits, productivity, quality, performance, quality of work life etc. There are some problems too. The two biggest causes of failure are the spreading of rumours or circulation of wrong information. Mostly the sources of these are the outsiders and are a result of communication failure on part of the management. This has been highlighted by Larry Smeltzer (1991) who goes on to say that the worst kind of communication is a lean one which uses a memo as the means of conveying instruction or information. This is too cold and impersonal. They emphasize the importance of face-to-face meetings, the personal touch being vital and convincing. Leaders & the Sources of Power Every organization is beset with internal politics. It is common to find power groupings that aim at self development for individuals or groups of people. These are vested interests and can be detrimental to any change effort. But again these can be used for the cause of the change as well. With deft handling they can be convinced that it is in their best interest to support the change program. For this however the power groups have to be identified and their compulsions have to be understood. Only then they can be deconstructed and drafted for the cause of change. It is suggested by Anthony Cobb (1986) that, in an organizational change effort, the investigation of its political centres must be carried out at three levels: individual, coalition, and network. People who hold powerful positions and have developed reputations for power, possibly through their influence reflected in important decisions need to be identified. This is the individual level. Power groups or coalitions are to be identified by the influence the group exerts over certain areas and the decisive role their opinions play in the final outcomes. These groups or coalitions are formed over a period of time and exercise great influence over key areas or resources of the organization. They have to be brought on board for the change program. Often, a whole group of people or team needs to be removed from the scene in change management process or they will block the change. At the macro level management needs to find out the network that functions within the organization. These networks can be between individuals, between coalitions and between individuals and coalitions. The network cannot be eliminated but it is to be converted to become positive towards change. The forces of power have to be understood and harnessed for effective change management. Political manoeuvring, not unlike that at national level, is required and Kumar and Thibodeaux recommend (1990), that the extent of political manipulation and manoeuvring should vary with the level of change required. It is here that the leader at the top plays a vital role. Some higher level of political bargaining or persuasion can be done by the leader to facilitate change through felicitation. Sometimes and interventionist approach is useful (Kumar and Thibodeaux 1990) where the management takes an activist attitude by encouraging dissent against present beliefs. In the final analysis the authors have correctly diagnosed that success of change is indeed a result of leadership initiative and behaviour. Case Study Despite its size, and in fact because of it, J.C. Penney (JCP) fell into terrible times in the nineties. It failed to realize that with time it had to change along with changing demographics of younger customers who had a different outlook. It neglected the aspirations of the new customers and carried on with old ways that were no longer valid in the face of current competition. It had lost its competitive advantage. It was working on the concept of decentralized purchasing that gave the store manager the authority to purchase locally in the faulty belief that the man closest to the customer knew what the customer needed. This resulted in adding huge varieties to the stock and overburdening inventories. Fashion changes rapidly and eventually these stocks became a burden and had to be disposed later at huge discounts. Inventory management became a headache and the company was unaware of its contents as it did not upgrade technologies. The competition too became varied. Mall based stores like Gillard offered a more fashionable experience to customers while free standing stores like Kohl offered lower prices. JCP found itself being removed from the preferred list of the younger customers that passed it over for both value and style. The effect in the financial market was no less disastrous. JCP shares fell to a low of $ 10 and were placed in the junk class. As a consequence it lost leverage in the market and access to commercial paper was denied; indeed it had to resort to purchasing in cash as it had lost credit facilities. The competition’s fashion category formats also underwent changes and here JCP lost its uniqueness as the difference between competitions narrowed. Everyone was offering similar fashions in an already mature market. JCP was primarily a clothing retailer but it had diversified its portfolio to operating a drug store chain and was also selling insurance, travel and auto club programs. It also sold through catalogues that carried thousands of items. This change of focus affected efficiencies and resulted in mediocre service that did not help in retaining customers. Compensation to employees was not linked with performance and everyone was placid in approach. There was general incompetence all around from top to bottom and the giant was propelling under momentum and not on any strategy. That it only staggered along for a long period and did not take a fall was an attribute to its glorious past. In this entire effort the leader is to play the critical role stepping in wherever required and intervening directly or through change agents to smooth out the effort and to achieve his strategic goals by means of changes in the organization. This is what was finally realized by JCP. Beginning from 1999 a complete revamp of JCP commenced and lasted through 2004 when it finally bounced back with share prices soaring to $ 50 and restoring the faith of all stakeholders. The company achieved this turnaround on the vision of two of its leaders, Allen Qustrom between 1999 and 2004 and Myron Ullman 2004 onwards. Between these two, new strategies were devised and changes brought about that resulted in the turnaround of the company. They introduced central purchasing, sold off extraneous business ands returned to nourish the core competencies of JCP. Technological enhancements and training of staff improved efficiency levels. Fresh hiring was done on basis of qualification fitting the job. Compensations were linked to performance. Store formats were changed and a more appealing range of products was introduced to attract the growing younger customers. With central purchasing and efficient inventory management there was marked improvement in working capital availability. As many as 120 non performing stores were closed down, contemporary fashion was introduced, and the customer again became important to the company. The allied business activities apart from the core business were sold off, and the merchandise was revamped with latest styles that were preferred by the younger customers especially the school going generation. This segment was very promising and unless the company kept abreast of fashion changes, products became outdated in a matter of months. But by far the most important step the leaders took was to change the attitude of the employees by giving them targets attached with rewards. Performance became the buzzword. Special training was offered to existing staff and fresh recruitments now underwent great scrutiny to find suitable people to fill positions. According to Senge (1990b), by sharing the vision with more people the vision becomes more real and people imagine it to be achievable. With this sharing the leaders now have partners, co-creators; the vision no longer set on their shoulders alone. This then is the measure of success of a leader. Bibliography Cobb, A.T.,"Political Diagnosis: Applications in Organizational Development," Academy of Management Review, 11 (1986): 482-496.. Covin T.J.and Kilmann, R.H. "Participant Perceptions of Positive and Negative Influences on Large-Scale Change," Group and Organization Studies, 15 (1990): 233-248. Cummings T.G. & Worley, C.G. (1997), Organisation Development and Change, 6th Ed., South Western, Ohio K. Kumar and M.S. Thibodeaux, "Organizational Politics and Planned Organizational Change," Group and Organization Studies, 15 (1990): 357-365. Nadler D.A. and Tushman, M.L., "Beyond the Charismatic Leader: Leadership and Organizational Change," California Management Review, Winter 1990, pp. 77-97. Porras J.I. and Hoffer, S.J.,"Common Behavior Changes in Successful Organization Development Efforts," Journal of Applied Behavioral Science, 22 (1986): 477-494.. Senge, Peter M., "The Leaders New Work: Building Learning Organizations," Sloan Management Review, Fall 1990b, pp. 7-23. Smeltzer, L.R.,"An Analysis of Strategies for Announcing Organization-Wide Change," Group and Organization Studies, 16(1991): 5-24. Read More