Organisational Change Management

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International Journal of Operations & Production Management Emergent change and planned change – competitors or allies?: The case of XYZ construction Bernard Burnes

Article information: To cite this document: Bernard Burnes, (2004),"Emergent change and planned change – competitors or allies?", International Journal of Operations & Production Management, Vol. 24 Iss 9 pp. 886 - 902 Permanent link to this document: http://dx.doi.org/10.1108/01443570410552108

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Users who downloaded this article also downloaded: Sharyn E. Herzig, Nerina L. Jimmieson, (2006),"Middle managers' uncertainty management during organizational change", Leadership & Organization Development Journal, Vol. 27 Iss 8 pp. 628-645 http://dx.doi.org/10.1108/01437730610709264 Steven H. Appelbaum, Sally Habashy, Jean-Luc Malo, Hisham Shafiq, (2012),"Back to the future: revisiting Kotter's 1996 change model", Journal of Management Development, Vol. 31 Iss 8 pp. 764-782 http:// dx.doi.org/10.1108/02621711211253231 Reut Livne-Tarandach, Jean M. Bartunek, (2009),"A new horizon for organizational change and development scholarship: Connecting planned and emergent change", Research in Organizational Change and Development, Vol. 17 pp. 1-35 http://dx.doi.org/10.1108/S0897-3016(2009)0000017003

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Emergent change and planned change – competitors or allies?

The case of XYZ construction

Bernard Burnes Manchester School of Management, UMIST, Manchester, UK

Keywords Organizational change, Process planning, Change management, Emergent strategy

Abstract In a fast-moving and unpredictable world, there can be little doubt that organizational change is one of the most important issues facing organizations. This is especially so, when it is claimed that over 60 per cent of all change projects are considered to fail. Not surprisingly, therefore, there is also much debate about which approach to change is the best. Over the past 20 years, the emergent approach appears to have superseded the planned approach as the most appropriate. However, as this paper will argue, the idea that planned and emergent changes are competing approaches, rather than complementary, is contestable. This paper looks at the case of XYZ construction which, between 1996 and 2000, used both emergent and planned approaches to transform itself. The paper concludes that organizations need to avoid seeking an “one best way” approach to change and instead seek to identify the approach which is best suited to both type of changes they wish to undertake, according to the organization’s context.

Introduction If there is one thing that organization theorists and practitioners agree upon, it is that change which is more frequent, of a greater magnitude and much less predictable than ever before (Carnall, 2003; Cummings and Worley, 2001; Kanter, 1997; Kotter, 1996; Peters, 1997). Most commentators appear to share Hammer and Champy’s (1993, p. 23) view that “. . .change has become both pervasive and persistent. It ‘is’ normality.” However, as Stace and Dunphy (2001) show, change comes in many shapes and sizes; sometimes change is incremental and hardly noticed, whilst at other times change is large and dramatic. It is therefore, important not to see change as some amorphous mass but to understand the range and variety of change situations. It is also important to recognise that successful change is difficult to accomplish. For example, Beer and Nohria (2000) estimate that about two-thirds of change projects fail, whilst a review of the literature by Burnes (2004b) suggests that for some types of change, the figure may be even higher. Therefore, the importance of organizational change appears to be matched by the difficulty in successfully accomplishing it.

This, of course, directs attention to how these change efforts are managed. In a recent paper in this Journal, Bamford and Forrester (2004) examined organizational change from the perspective of both planned and emergent approaches to change. Though their findings could be construed as an argument against the planned approach and in favour of the emergent, they state that: “This is not the case at all. Our main dispute is with the increasingly unreflective manner of most organizational change initiatives” (Bamford and Forrester, 2004, pp. 555-6). In essence, their argument, as with that of many others (Beer and Nohria, 2000; Burnes, 2004b; Kanter et al., 1992; Stace and Dunphy, 2001) is that there are a variety of approaches to change, and that an important element in achieving successful change is to choose the most appropriate approach for the type of change being undertaken and the circumstances

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International Journal of Operations & Production Management Vol. 24 No. 9, 2004 pp. 886-902 q Emerald Group Publishing Limited 0144-3577 DOI 10.1108/01443570410552108

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in which it is being undertaken. This paper presents a longitudinal case study of an organization which, between 1996 and 2000, transformed its culture, management practices and structure through a combination of emergent and planned changes. The paper begins by revisiting the change management debate. It then presents the background and methods used in the case study. This is followed by a description and analysis of the case study. The paper concludes by arguing that successful change depends on those who manage organizations, recognising the need to use a variety of approaches to change rather than favouring one in all situations.

The change management debate Though there are many different approaches to organizational change and many ways of categorising these, there is a general agreement that the two dominant ones are the planned and emergent approaches (Burnes, 2004b; Cummings and Worley, 2001; Dawson, 1994; Kanter et al., 1992; Pettigrew, 2000; Stace and Dunphy, 2001; Weick, 2000; Wilson, 1992). From the 1950s until the early 1980s, the field of organizational change was dominated by the planned approach, which originated with Kurt Lewin. Though often portrayed by its critics as a simplistic approach to change, Lewin’s approach, as Burnes (2004a) shows, comprised of four complex elements.

(1) Field theory. This is an approach to understand group behaviour by mapping out the totality and complexity of the field in which the behaviour takes place (Back, 1992).

(2) Group dynamics. Lewin’s view was that it was not possible to change the behaviour of a group successfully unless one understood the interactions (dynamics) between its members (Allport, 1948; Bargal et al., 1992).

(3) Action research. Lewin conceived action research as a two-pronged process which would allow groups to identify and achieve change. First, it emphasises that change requires action, and is directed at achieving this. Second, it recognises that successful action is based on analysing the situation correctly, identifying all the possible alternative solutions and choosing the one most appropriate to the situation at hand.

(4) Three-step model. A successful change project, Lewin (1947) argued, involved the following three steps. . Step 1: unfreezing. Lewin believed that the stability of human behaviour was

based on a quasi-stationary equilibrium supported by a complex field of driving and restraining forces. He argued that the equilibrium needs to be destabilised (unfrozen) before old behaviour can be discarded (unlearnt) and new behaviour successfully adopted.

. Step 2: moving. As Schein (1996, p. 62) notes, unfreezing is not an end in itself; it “. . .creates motivation to learn but does not necessarily control or predict the direction.” Instead, one should seek to consider all the forces at work to identify and evaluate, on a trial and error basis, all the available options (Lewin, 1947).

. Step 3: refreezing. This is the final step in the three-step model. Refreezing seeks to stabilise the group at a new equilibrium in order to ensure that the new behaviours are relatively safe from regression.

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Lewin saw these four elements as being used and working together rather than being seen as separate theories. As Burnes (2004a) notes, in order to achieve successful change, Lewin believed it was necessary:

(1) to analyse and understand how social groupings were formed, motivated and maintained. This requires the use of both field theory and group dynamics.

(2) to change the behaviour of social groups. This requires the use of both action research and the three-step model of change.

Lewin saw that planned change is primarily aimed at improving the operation and effectiveness of the human side of the organization through participative, group- and team-based programmes of change (Burnes, 2004a; French and Bell, 1999). Lewin died in 1947, but his approach to planned change was broadened out and updated by the organization development movement and applied to organization-wide initiatives such as culture and structural change programmes (Cummings and Worley, 2001). Nevertheless, by the early 1980s, with the oil shocks of the 1970s, the rise of corporate Japan and the severe economic downturn in the West, it was clear that many organizations needed to transform themselves rapidly and often brutally if they were to survive (Burnes, 2004b; Dunphy and Stace, 1993; Kanter, 1989; Peters and Waterman, 1982). Given its group-based, consensual and relatively slow nature, planned change began to attract criticism as to its appropriateness and efficacy, especially from the culture-excellence school, the postmodernists and the processualists (Burnes, 2004b).

Proponents of culture-excellence argued that Western organizations were too bureaucratic, inflexible, and slow to change (Peters and Waterman, 1982). Their view of planned change is probably best summed up by Kanter et al.’s (1992, p. 10) scathing comment that:

Lewin’s model was a simple one, with organizational change involving three stages; unfreezing, changing and refreezing . . . This quaintly linear and static conception – the organization as an ice cube – is so wildly inappropriate that it is difficult to see why it has not only survived but prospered. . . . Suffice it to say here, first, that organizations are never frozen, much less refrozen, but are fluid entities with many “personalities”. Second, to the extent that there are stages, they overlap and interpenetrate one another in important ways.

In place of Lewin’s model, culture-excellence called for organizations to adopt flexible cultures which promote innovation and entrepreneurship and that encourage bottom-up, continuous and co-operative change. Its advocates maintained that top-down coercion, and rapid transformation, might also be necessary to create the conditions in which this type of approach could flourish (Kanter, 1983; Peters and Waterman, 1982).

At the same time, others were drawing attention to the role of power and politics in decision-making. Writers such as Pfeffer (1981, 1992) claimed that the objectives and outcomes of change programmes were more likely to be determined by power struggles than by any process of consensus-building or rational decision-making. For the postmodernists, power is also a central feature of organizational change, but it arises from the socially-constructed nature of organizational life:

In a socially-constructed world, responsibility for environmental conditions lies with those who do the constructing. . . . This suggests at least two competing scenarios for

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organizational change. First, organization change can be a vehicle of domination for those who conspire to enact the world for others . . . An alternate use of social constructionism is to create a democracy of enactment in which the process is made open and available to all . . . such that we create opportunities for freedom and innovation rather than simply for further domination (Hatch, 1997, p. 367-8).

The other important perspective on organizational change which emerged in the 1980s was the processual approach. Processualists argue that change is continuous, unpredictable and essentially political in nature (Pettigrew and Whipp, 1993; Wilson, 1992). As Dawson (1994, pp. 3-4) comments:

The processual framework . . . adopts the view that change is a complex and dynamic process which should not be solidified or treated as a series of linear events. . . . central to the development of a processual approach is the need to incorporate an analysis of the politics of managing change.

As Weick (2000) noted, the main critics of planned change tend to assemble under the banner of emergent change. Weick (2000, p. 237) states that:

Emergent change consists of ongoing accommodations, adaptations, and alterations that produce fundamental change without a priori intentions to do so. Emergent change occurs when people reaccomplish routines and when they deal with contingencies, breakdowns, and opportunities in everyday work. Much of this change goes unnoticed, because small alterations are lumped together as noise in otherwise uneventful inertia . . .

The rationale for the emergent approach stems, according to Hayes (2002, p. 37), from the belief that:

. . . the key decisions about matching the organization’s resources with opportunities, constraints and demands in the environment evolve over time and are the outcome of cultural and political processes in organizations.

Underpinning the rise of the emergent approach were new perspectives on the nature of change in organizations. Up to the late 1970s, the incremental model of change dominated. Advocates of this view see change as being a process whereby individual parts of an organization deal incrementally and separately with one problem and one goal at a time. By managers responding to pressures in their local internal and external environments in this way, over time, their organizations become transformed (Cyert and March, 1963; Hedberg et al., 1976; Lindblom, 1959; Quinn, 1980, 1982).

In the 1980s researchers began to draw attention to two new perspectives on change: the punctuated equilibrium model and the continuous transformation model. The former approach to change:

. . . depicts organizations as evolving through relatively long periods of stability (equilibrium periods) in their basic patterns of activity that are punctuated by relatively short bursts of fundamental change (revolutionary periods). Revolutionary periods substantively disrupt established activity patterns and install the basis for new equilibrium periods (Romanelli and Tushman, 1994, p. 1141).

The inspiration for this model arises from two sources: first, from the challenge to Darwin’s gradualist model of evolution in the natural sciences (Gould, 1989); and secondly, from research showing that whilst organizations do appear to fit the

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incrementalist model of change for a period of time, there does come a point when they go through a period of rapid and fundamental change (Gersick, 1991).

Proponents of the continuous transformation model of change reject both incrementalist and punctuated equilibrium models. They argue that in order to survive organizations must develop the ability to change themselves continuously in a fundamental manner. This is particularly the case in the fast-moving sectors such as retail and computers (Brown and Eisenhardt, 1997; Greenwald, 1996). Like a rapidly-growing number of academics and practitioners, many supporters of the continuous transformation model base their ideas on the work of complexity theorists (Bechtold, 1997; Black, 2000; Boje, 2000; Choi et al., 2001; Gilchrist, 2000; Lewis, 1994; Macbeth, 2002; Shelton and Darling, 2001; Stacey et al., 2002; Tetenbaum, 1998).

Kanter et al. (1992), addressing the issue of transformational change, noted that it can be achieved either by a bold stroke approach (rapid overall change) or a long march approach (incremental change leading to transformation over an extended period of time).

In a similar vein, Beer and Nohria (2000) identify two basic archetypes or theories of change: Theory E, which is similar to Kanter et al.’s bold stroke, and Theory O, which is similar to Kanter et al.’s long march. The main objective of Theory E change is to maximise shareholder value. It is applied in situations where an organization’s performance has diminished to such an extent that its main shareholders demand major and rapid change to improve the organization’s financial performance. Typically, this is a “hard” approach based on downsizing, divestment of non-core or low-performing businesses, and the heavy use of financial incentives. Theory O is also aimed at improving an organization’s performance, but this is more a “soft” approach which is based on incrementally developing the organization’s culture and its human capabilities, and promoting organizational learning.

Beer and Nohria (2000) believe that both of these are valid models of change but that both have their flaws. Theory E can achieve short-term financial gains, but at the cost of denuding an organization of the human capabilities and organizational culture necessary for long-term survival. Theory O, whilst focusing on people and culture, falls into the trap of not restructuring to concentrate on core activities, thus failing to deliver shareholder value. To achieve the gains of both these approaches, whilst avoiding the pitfalls, Beer and Nohria advocate using these in tandem by focusing on the rapid restructuring elements of Theory E but following this with the human capability development offered by Theory O.

Therefore, whilst there has been a growing chorus of disapproval of planned change over the last 20 years, and increasing support for a more emergent view of change, there is also a view that just one approach to change may be sub-optimal. As the following will show, in the case of XYZ construction, success came from matching the approach to change to the type of change being undertaken.

Methodology As the above literature review shows, the theory and practice of organizational change is neither a simple nor uncontested area. Nevertheless, it is an area which is of crucial importance to organizations. In a rapidly-changing world, the ability to align an organization’s internal arrangements with the demands of the external world is crucial for its survival. Though, as mentioned in the introduction, a majority of change

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initiatives appear to fail, the case study of XYZ construction shows that some organizations are successful. The case study, which was conducted over a 12-month period starting in June 1999, explores what XYZ did, why it did it and how it did it in order to understand why the company appears capable of managing even the most complex changes speedily and successfully. As the case study will show, this stems from its ability to involve managers and staff in planning and implementing change, and its recognition that different change situations require different approaches.

In designing the research, a case study approach was chosen because, as Yin (1994) argued, this type of approach is preferred when “how” or “why” questions are being asked. In this case, we were interested in why the company was making the change, how it was approaching the change and what factors had assisted it to manage change successfully in the previous three years. A case study methodology was also seen as appropriate because, as Yin (1994) argues, case studies can provide a rich understanding of the organization or organizations in question. Similarly, Denzin and Lincoln (1998) and Robson (1993) also point to the ability of qualitative research to capture the real-life context within which events take place and to capture the essence of events, especially as they unfold. In this instance, we were offered virtually unlimited access to the company and its activities at a time when it was beginning the process of changing its structure. In effect, we were given a ringside seat during a major change initiative. The main data collection methods were as follows.

(1) Interviews. Both formal and informal interviews were conducted with the staff in the company. The process began with one-to-one interviews with directors and senior managers, and extended to individuals and groups at all levels in the company. In many cases, repeated interviews were conducted. For example, discussions took place with the managing director and key change agents on an almost weekly basis.

(2) Observation of key meetings. The researchers were present at all the main formal meetings and a large number of informal meetings between the key parties.

(3) Documentary data. Throughout the change process, a large amount of written material was produced by the company, e.g. minutes of meetings, newsletters, change proposals, etc. All this material was made available to the researchers.

(4) Feedback. As the research progressed, formal and informal feedback was provided to the company by the researchers. This allowed the researchers to check their understanding of events, and to open or reopen lines of enquiry.

As the following case study will show, this data provided a rich source of information in terms of both real-time changes taking place in the company and also of the events in its recent past.

The case study: XYZ construction XYZ construction based in the UK, employs 500 staff and is part of a European-based multinational enterprise. Its main business is the provision of specialist services to major construction projects. As is typical for the construction industry, XYZ operates in a highly competitive and at times hostile and aggressive environment. Disputes between contractors and sub-contractors can become bitter and frequently end in litigation, though there have been a number of attempts over the last decade to create

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better relationships. Just as relationships between organizations tend to be hostile, relationships within organizations were also less than friendly. Till 1996, XYZ had been run by an autocratic managing director who was feared by his colleagues and who treated the company as his own personal fiefdom. His style of management was not liked and many felt that it was counter-productive but, as one manager commented, “You didn’t challenge him, you didn’t put your head above the parapet, or he’d make life hell for you”. When he retired, the parent company took the view that XYZ was underperforming and that much of this was due to poor management and lack of co-operation within the company. His replacement was appointed with the remit to improve the performance of the company and develop its managerial competency. This he did to great effect. Over a four-year period, he transformed the operation, culture and structure of the organization.

Focussing on people and performance The new managing director was appointed in 1996. He had been trained as an engineer at XYZ, but had then left and worked for a number of other companies in the construction industry. However, the UK construction industry is a close-knit community and he still knew XYZ and its staff quite well. He returned to XYZ with a reputation as an enlightened manager who could deliver performance improvements. The construction industry was notorious for the antagonistic relations between the main contractors and sub-contractors such as XYZ, who specialise in one aspect of the construction process. However, the managing director recognised that the industry was attempting to change, and conflict was being replaced by “partnership” initiatives – contractors and sub-contractors working in a more co-operative and team-based manner (Burnes and Coram, 1999). The managing director also recognised that external partnerships needed internal partnerships and teamworking if they were to be successful. In turn, this would require a new style of participative management in XYZ. Therefore, the managing director set out not just to upgrade XYZ’s management, but to undertake a root and branch overhaul of the company’s operations and culture.

As a signal of his way of working and, as a first step in creating better relationships amongst managers, he broadened out the senior management team to include key staff who were not directors. In what had been a very hierarchical and status-conscious company, this was a significant change. The managing director knew that the staff in the company, particularly at a senior level, were experienced and competent people. He believed that it was the company’s interest to retain staff rather than replace them. However, he also believed that they would need to change their attitudes and behaviours and upgrade their managerial skills if the company was to achieve the changes that he believed were necessary. His strategy for transforming the company rested on carrying out two crucial activities in parallel: to introduce new practices and techniques into the company to provide a better service to customers (and thus, improve the company’s overall performance), and to change attitudes and behaviours within the company, especially those of managers. He did not see these as being separate activities or programmes: he saw them as being linked. New practices, such as customer care and customer partnering, were not mere technical exercises. They required behavioural changes and new managerial skills. Therefore, the managing director wanted to create a change programme whereby any change designed to improve the organization’s performance, whether it be new skills, new techniques, or

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whatever, also had to promote and reinforce behavioural and culture change. The converse was also the case: any effort designed to change culture or behaviour also had to have the objective of improving the organization’s performance.

Between 1996 and 2000, the company undertook a series of organizational, management and staff development initiatives designed collectively to transform the organization’s performance and culture. The main initiatives are shown in Table I.

The managing director’s first initiative was to introduce a small-scale Kaizen programme. The managing director saw his Kaizen initiative as delivering four benefits: it would show the organization that improvements could be achieved on a quick low-cost/no-cost basis; it would promote teamworking; it would give managers confidence to delegate to and empower their staff; and it would allow both staff and managers to acquire new skills. In a traditional company, such as XYZ, it was not easy to introduce new ideas and new ways of working, especially where managers might perceive them as a threat. But the managing director was persuasive in selling the benefits of change to managers and staff, and he also made it clear that he was committed to this initiative and that it had to work. Over the next few years the Kaizen approach was rolled out throughout the organization.

The next initiative, in October 1996, was a customer care programme. This was designed to engender a positive view of customers by promoting joint teamworking. In an industry where antagonism between customers and suppliers (contractors and sub-contractors) was the order of the day, where settling disputes through the courts was almost a standard practice, it was never going to be easy to promote customer care. However, the managing director knew that the future of the company depended on working with customers to understand what they wanted and to give it to them. Once again, this initiative was a combination of organizational change and management development; but, much more than the Kaizen initiative, it was also central to change the culture of the organization. It began with a few key customers and a few key managers, but such was its perceived success that a year later it was extended to the actual construction sites.

Date Event

June 1996 New managing director appointed August 1996 Kaizen phase 1 October 1996 Customer care programme launched March 1997 Investors in people launched April 1997 Kaizen phase 2 September 1997 Customer care programme extended to

construction sites January 1998 Construction supervisors’ new role launched June 1998 New SMT formed November 1998 Kaizen phase 3 March 1999 Site-based trainers appointed June 1999 XYZ culture redefined July 1999 Leadership and behaviours review September 1999 Begin to develop Team XYZ March 2000 Team XYZ up and running

Table I. Key changes at XYZ

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Other initiatives were introduced over the next few years including investors in people, and a redesigning of the construction supervisors’ role to ensure that the post-holders possessed the skills, competencies and behaviours necessary to work closely with customers and staff under the new regime. Once again this was designed to achieve a combination of aims, including changes to working practices, the upgrading of managerial competency on the construction sites, and the promotion and development of a more team-based culture in the organization.

In 1999, XYZ decided that it was time to redefine its culture and change its structure. As a number of writers have emphasised, structure and culture need to be aligned, but it takes much longer to change the latter than the former (Allaire and Firsirotu, 1984; Burnes, 1991; Handy, 1993). However, the company had already made sufficient changes to its behaviour and practices to believe that its culture was very much different from what it was when the managing director took over in 1996. It went through a company-wide process of identifying and redefining its culture. This then led into a process of reviewing each manager’s leadership abilities and behaviours. With these activities underway, the scene was set for redrawing the company’s structure in order to promote and reflect its new ways of working and its developing culture.

Towards team XYZ By 1999, the company was a much more cohesive, open and efficient organization. However, its basic structure remained the same when the new managing director had taken over. There was a head office, which dealt with large, national projects, and five regional offices which dealt with smaller, local projects. Each of these offices was organised on a functional basis; each had separate departments for finance, estimation, design and engineering. In addition, the head office had a human resources function which covered the entire company. This structure gave rise to a number of problems: rivalry between the head office and the regional offices; rivalry and lack of communication within the various offices between departments and functions. A particular problem was the relationship between estimation and design in the head office. The former was responsible for dealing with customers and setting the price for a job. However, the cost of a job was based on the design provided by the design office. Though based at the same building, there was friction between the two functions, with each seeking to second-guess the other. The large jobs were often very complex and even within the two functions of estimation and design there could be disputes about the best way to carry out a job. However, there was much more dispute between the two functions. Estimation felt that design sometimes made jobs too complex and costly, and design felt that estimation did not understand the technical aspects of what they were suggesting to customers. This caused problems for engineering, which was responsible for the actual construction process. The engineers sometimes found themselves starting jobs where there were still disagreements between estimation and design over what had been quoted for and what was required. Nevertheless, the general view was that the company was more efficient, better-run and a friendlier place than it had been four years earlier.

In 1999, the managing director and his deputy began to have discussions in the company restructuring. Their basic aim was to remove functional barriers and create a more teamwork-based, process-focussed organization. However, they did not

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underestimate how difficult this would be. It would need a complete reorganization within and between the offices. It would reduce the power of the regional managers and amalgamate the head office empires of some directors. The managing director recognised that such changes could and probably would create friction and resistance. He also recognised that XYZ lacked the skills to plan and implement such a change. Therefore, he brought in a change consultant to assist with the exercise. After discussions with the consultant, a five-stage change process was agreed comprising of the following activities:

(1) change readiness audit,

(2) evaluation and planning workshops,

(3) communication,

(4) implementation and team-building, and

(5) evaluation.

Stage 1. The consultant undertook a change readiness audit to identify key issues and concerns which need to be addressed. This consisted of face-to-face interviews with all senior managers, and interviews and discussions with other staff from all levels of the company. It also involved a SWOT exercise to assess the company’s competitive position. About 70 people, at all levels, were involved in the SWOT. The interviews showed that there was a general recognition of the problems brought about by the existing structure, but little agreement about any new structure, and some concern over potential loss of status and career opportunities, especially if the new structure involved multi-functional teams and a reduced number of departments. However, the audit also showed that managers and staff alike had faith in and respect for the managing director. They also felt that the changes that had taken place over the previous three years had been positive. In addition, there was a strong sense of self-belief in the company that whatever changes were required, they could achieve them. The SWOT exercise showed that there was a considerable agreement that the company had a strong technical base, but concerns about lack of team-working and entrepreneurial flair. In particular, staff in the regional offices felt that opportunities for new business were being missed. They also felt that their skills were under-utilised by being devoted mainly to small jobs rather than having an opportunity to participate in the larger contracts. The findings from the change audit were used to structure and begin the second stage of the change process, the evaluation and planning workshops.

Stage 2. There were five one-day workshops spread over a two-month period. The purpose of these workshops was to establish a set of criteria for evaluating alternative structures, identify what alternatives existed, test these against the evaluation criteria, select a preferred structure and develop plans for implementing it. This was seen as an iterative process. Even when the evaluation criteria had been agreed, it was expected that further discussions about alternative structures and planning would lead to some of these being questioned, challenged and amended. Similarly, once a preferred structure had been agreed, it could still be amended if the planning process threw up issues that had not been considered. At the end of each workshop, participants had agreed a set of actions which they had to undertake, the key one being to go out and discuss what had emerged from the workshops with their colleagues in the rest of the company. A newsletter was also issued from each workshop.

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The first two workshops were for the senior management team (SMT) only, and the remaining three for the SMT plus the next layer of managers down, an additional 15-20 people. The results of the audit were presented at the first workshop, which began with the process of developing a set of evaluation criteria and generating alternative structures. At the end of workshop 1, a consensus seemed to be emerging with regard to a preferred structure. At the end of workshop 2, it was agreed that the new structure should be built around the three core activities of the company which were labelled: get work, do work, and get paid. It was also agreed that whilst it was important to keep the regional offices, their staff should be merged into the new structure. In effect, what emerged was a process-orientated flat, matrix structure with staff in the regional offices being responsible to both regional manager and process manager at the head office. For the head office staff, in the main, their line manager and process manager would be the same person. As might be expected, this new structure did not emerge without much discussion, debate and in some cases soul-searching. The SMT also recognised that this was probably the most radical of the proposals they had looked at, and the one that is likely to meet the most resistance both from regional managers, whose power would be much reduced, and functional specialists in estimation and design who would have to be merged to create the “get work” group. In addition, it was clear that some directors were not happy to see their own department dismantled and their own position threatened.

The first of the remaining three workshops was devoted to present the proposed structure to the new participants, testing it and in some cases agreeing to amend it. The remaining two workshops concentrated on the details of implementing the new structure. This covered everything from where people would sit, to whom they would report, new job descriptions, communication and team-building. This latter exercise was seen as vital to ensure that staff in the reorganised structure worked as teams and co-operated with other teams rather than merely creating another set of functional barriers. It was at this point that it was agreed that the new structure be named “Team XYZ” to emphasise that the intention was to create a company where everyone felt they were members of one team. There was also much discussion and consultation between the workshops with staff in the rest of the company. At the end of stage 2, almost all managers and supervisors in the company and a great number of the workforce had been involved in the process, and by November 1999, the company was ready to communicate the new structure both internally and externally (to their parent company and customers).

Stage 3. The communication stage was both short and intense. Members of the SMT were given the task of visiting all areas of the company and briefing them on the new structure and how it would impact on them. Though there were newsletters and information on the company’s Intranet, it was these face-to-face briefings with small groups of staff which generated the most debate. They also raised some questions, mainly of a detailed nature, which had not been addressed. However, in general, the new structure received a positive welcome and the implementation stage then began.

Stage 4. The new structure was rolled out over a three-month period. Ideally everything would have changed overnight, but the logistics of moving staff around one group to another, physically altering office accommodation, and training managers to take on their new roles took time. Also, the intention was to ensure that all managers and supervisors, including those on sites, went through Team XYZ team-building

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workshops. Although, as expected, there were some hiccups and some unanticipated problems, by the end of March 2000 the new structure was fully up and running with remarkably little difficulty.

Stage 5. In April, a two-day meeting of all the company’s senior and middle managers was held to evaluate the change that had taken place, identify issues that need to be addressed, and ensure that the new structure would be sustained and developed, and that staff did not fall back into old ways of working. As part of this process, each manager was asked to identify two steps that they personally would take to increase the effectiveness and acceptance of the new structure, and to promote teamworking. These were all written on flip charts and pinned to the walls for everyone to see. At the beginning of the two-day meeting, there was something of an air of exhaustion about the managers; they had been through a period of major upheaval and, as one said, “We need a period of consolidation”. At the end of the two-day meeting, they not only left having agreed that the new structure was working remarkably well but also with a whole host of new changes they wanted to make for improving the structure further.

Discussion Though the development and implementation of a new structure at XYZ was not without its difficulties, it was achieved remarkably quickly and with relatively little disruption. There was significant potential for those who might lose out from the changes to try to prevent, or at least slow down, their implementation. All the regional managers and a number of the directors saw their areas of responsibility, and thus, power reduced. Many of the functional specialists found themselves operating in multi-functional teams where their promotion prospects depended less on their technical abilities per se and more on their ability to work and manage as a team player. There was also the fact that people who did not like each other suddenly found that they were working side by side. One explanation as to why the potential dangers to the change process did not emerge is clearly a result of the way it was managed. It was an open process that involved a great number of people either directly or indirectly. At some point, all the issues that need to be considered, even personality issues, were brought out on the table and discussed, sometimes quite often. There was also a tenacity and momentum to the process. It was clear from the start that the managing director wanted to see a new structure and would not be fobbed off with a sub-optimal compromise. It was also clear from the change audit that many other people in the company recognised that its structure required change, even if they were nervous about such a change. In essence, the company was ready for such a change, even if some were uncomfortable with the outcome. This of course raises the question: Why were they ready?

For organizations to work effectively, it is necessary for the structure and culture to be aligned, but whilst structure can be changed quickly, changing culture is a much slower and less certain process (Allaire and Firsirotu, 1984; Handy, 1993). As mentioned earlier, Kanter et al. (1992) identified two basic approaches to change: bold strokes and long marches. The former refers to rapid and major structural transformation initiatives. The latter covers slow, incremental change programmes that run over a number of years and which are geared to achieving changes in culture and behaviour. The wisdom received is that when companies need to transform

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themselves, they should change their structures first because this is the quickest and easiest change to make. They should then embark on a process of developing a culture to support and align with the new structure. This is why Kanter et al. (1992) note that bold strokes often need to be followed by long marches for organizations to seek to develop a culture and behaviours suitable for their new structure. In the case of XYZ, this logic was turned on its head. As Table I shows, the bold stroke, the new structure, followed the long march to create a new culture in the company, and this is why it could be implemented so quickly, so successfully and with relatively little resistance. XYZ already possessed the culture to go along with its new structure. It already possessed a management and workforce orientated to work in a team-based environment. The new structure was necessary to formalise and facilitate the new teamworking ethos of the organization, and to reinforce the new culture itself.

The changes in the company up to 1999, whilst touching on all levels of the company and crucial for its development, were in the main small-scale and decentralised. Though initiated by the managing director, they relied on everyone in the company participating in them and becoming committed to them. The responsibility for their success ultimately rested with those involved rather than being managed or driven by senior managers. Therefore, the many changes which occurred between 1996 and 1999, and which began to reshape managerial behaviour and the organization’s culture, can be seen to be emergent in nature. However, the structure change initiative which began in 1999 was a different animal.

The development and implementation of the new structure at XYZ can be seen much as a case of planned change rather than emergent change. Indeed, the five stages seem very much like Lewin’s 3-stage model. The structure change process began by gathering information on the shortcomings of the existing structure and to understand the degree of readiness to change. It also served to prepare staff and managers in the company for change. Therefore, it was the beginning of the unfreezing process. The second stage continued this unfreezing, but began to initiate the moving phase by identifying options and choosing the preferred option. This was followed in stage 3 with the communication exercise and in stage 4 by implementation. In stage 5 the refreezing phase began by getting managers not only to recognise the legitimacy of the new structure but to make further changes designed to reinforce (refreeze) the new structure. Nevertheless, the planned approach to structure change needs to be viewed within the context of a series of changes that had emerged in XYZ since 1996. It was these changes which created the change of culture in the company and paved the way for the relatively rapid change in the organization’s structure.

Conclusions As Stickland (1998, p. 14) remarks:

. . . the problem with studying change is that it parades across many subject domains under numerous guises, such as transformation, development, metamorphosis, transmutation, evolution, regeneration, innovation, revolution and transition to name but a few.

XYZ demonstrates the accuracy of Stickland’s remarks. It experienced a wide variety of change initiatives. During the first few years of the managing director’s tenure, the changes were relatively small-scale, decentralised, and aimed at improving performance and changing behaviour. These changes tended to be emergent rather

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than all being planned in advance as part of an integrated programme of change. Whilst the managing director believed that the company required to change radically to survive, the details of this radical change and the timescale for achieving it were vague. Only as one initiative succeeded another did the overall objective and timescale began to emerge and take shape. However, the change to the organization’s structure was a different animal. It was a planned approach which was driven from the top with clear objectives and timescale.

By the end of 2000, XYZ was an organization which had made significant changes to its culture, structure and performance over a number of years. The impetus for the changes came with the appointment of a new managing director. The new managing director, supported by the parent company, saw the need to transform radically how XYZ worked if it was to improve its competitiveness in a highly competitive industry. The managing director saw that the changes he believed were necessary within the company paralleled changes that were being attempted across the UK construction industry as whole. Therefore, to an extent, he was trying to align the company towards the changing nature of the industry. However, in order to do that, he had to overcome significant cultural and structural constraints within the company. His first priority was to begin developing a new culture in the organization. He pursued this through a stream of emergent, open-ended and, to an extent, experimental changes aimed at changing the behaviour and attitudes of managers and staff. Only when he felt that the organization’s culture was ready, did he begin the process of changing its structure. However, he adopted a planned approach to change the organization’s structure rather than an emergent one. Though emergent change had served the company well in bringing about changes in the attitudes and behaviour of managers and staff, and in improving the organization’s performance, the managing director believed that structural change could not be achieved by a range of slow, local and change initiatives. He saw that it needed to be a relatively quick and co-ordinated approach, which was capable of involving many people and winning over the majority of the organization, especially those who might be in a position to block change.

The recognition that the emergent approach to change was inappropriate for achieving a change in the organization’s structure demonstrated one of the key competencies necessary to achieve successful change: understanding the organizational context. From the day he took over as the new managing director we showed a deep understanding of the nature of XYZ, what changes need to take place and how, given the circumstances of the organization, they should be introduced. As Burnes (2004b) shows, it is only by understanding the context within which change takes place, that the most beneficial types of change can be introduced in the most effective way. Given XYZ’s experience, and that of most other organizations, it seems strange, as Pettigrew (2000) noted that there are those who argue for just one approach to change. It is clear from the XYZ experience that planned and emergent changes are not competitors, with each one seeking to show that it is better than the other. Nor are they mutually exclusive or incapable of being used in combination. Rather they are allies, each one appropriate to particular change situations but neither appropriate for all change situations. As Bamford and Forrester (2004) concluded, there is no “one best way” to manage change. The key issue for managers is to understand what they are trying to achieve, the context in which their organization is operating and the strengths and weaknesses of the various approaches to change.

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