Short term versus long term? Featured

12:55pm EDT May 17, 2006
Change can be a powerful tool. In fact, in a dynamic business world, maintaining the status quo can be imprudent. Overhauling production techniques, deploying a new customer service model or replacing key personnel are all moves that can help a company flourish.

But when implementing organizational change, it is crucial to keep an eye on the long-term prize.

“When we push back the short-term mentality and try to look at the longer term we make better decisions,” says Don St. Clair, vice president for enrollment management and marketing and adjunct faculty member of organizational leadership at Woodbury University.

St. Clair spoke with Smart Business about organizational change, the dangers of ineffectively communicating change to employees and the importance of establishing metrics upfront.

What are some of the reasons that companies implement organizational change?
The most obvious reason is that there is a performance gap: there’s a gap between what is and what we would like to be. It could be that the organization is underperforming, it’s not meeting its sales or customer service objectives, or it’s not innovating in an appropriate manner. Then there are some forward-thinking organizations that adopt the principle of, ‘If it ain’t broke, fix it anyway.’ Those are organizations that are always looking to improve and always looking to be ahead. Organizational change may be implemented; not in response to a problem, but simply to forestall problems and stay ahead of the competition.

What are the dangers of poorly communicating the purpose of organizational change?
It’s probably the most often-seen mistake. We sit in the executive suite and we come up with really good ideas. We put together a plan and we assume that because we know the basis for the idea and the change that it’s going to trickle down to everybody else — and it doesn’t.

Consequently, when change is happening and people don’t know what’s going on, it’s human nature to assume or fear the worst. If you’re going to engineer successful organizational change, people have to have the opportunity to buy into that change. At the very least, you want to them to accept the change, but what you really want is for them to embrace it.

How have new technologies affected how organizational change is communicated?
Think how many channels for communication there are and how quickly information spreads. If something happens in Tel Aviv or Baghdad, we know in 15 minutes. The same thing is going on in your organization. E-mail has profoundly changed the nature of communication because it is instantaneous and the corporate rumor mill can now fly at the speed of the Internet. Simply having a meeting and telling people about change are no longer enough. You’re going to have the meeting and then the people are going to have their own interpretations. What you have to do is embrace all of the methods of communication that your employees are embracing and communicate as quickly and clearly as possible.

How can management help alleviate employees’ stress about change?
The best way to alleviate stress is to let people know what’s going on, why it’s going on, how it’s going to happen and when it’s going to happen. Just because you tell people what’s going on doesn’t mean that everyone is going to love you; they may not like the change and they may be resistant. But if you’re communicating and informing, at least you have a chance to get them on board. Also, it can help to give employees the opportunity to voice their opinions. We forget that a 50-year-old executive can still learn something from a 25-year-old entry-level employee. If you give people the opportunity to talk back with you, in a positive sense, they have the opportunity to voice their concerns and get the physical part of the stress out.

Once in place, how can a CEO or business leader measure the effectiveness of the organizational change?
Imagine that we’re playing a football game and, before the game started, we didn’t know that a touchdown was six points, an extra point was one point and a field goal was three points. Then we got in the game, somebody crosses the goal line and we all huddle around and ask, ‘How many points was this worth?’ It’s not effective and we can’t use this approach in business, either.

Metrics have to be set in advance of the change. Before you start the process, you have to identify what you want out of the change and how you know if you’re getting that. The metrics can be anything: improved customer-satisfaction indexes, improved profitability, lower costs, and so on. If you don’t know what you’re looking for, you won’t know if you’re getting it.

DON ST. CLAIR, vice president for enrollment management and marketing at Woodbury University, teaches in Woodbury’s Innovative Masters in Organizational Leadership program. Reach him at don.stclair@woodbury.edu.