Radical Change in a 75-Year-Old Company

Excerpt from “More Turbulent Change” by Peter R. Garber (ASTD, October 2012).

By Peter R. Garber

The reorganization in the ABC Company represented the most radical changes ever made in the company’s 75-year history. Several new functions were created, which meant new reporting relationships in the organization. Although some people thought they were passed over for certain opportunities, the initial feeling about the reorganization was generally positive. The changes were implemented to create a more streamlined organization—one that could meet the increasing demands of customers and respond more quickly to their needs. It all sounded great on paper. And if the changes had been implemented more effectively, the results might have been more in line with what was intended.

Information about the changes was kept secret and only those with an absolute need to know were included in what was planned; even these insiders felt they were left mostly in the dark. This secrecy had the unintended effect of creating more anxiety about the future. Worse yet, those whose responsibilities were going to be most affected were not informed of their new jobs until immediately before the reorganization’s announcement. Some managers were not even told about the reorganization in advance and instead heard about the changes in their jobs for the first time via an e-mail sent to everyone on the company’s intranet. Once these changes were announced and new positions were created, there was still much confusion about everyone’s new roles. Resentment was common among the employees. Instead of creating a more efficient organization, the reorganization resulted in a more fragmented and misdirected workforce, and the organization struggled to reach its intended goals. Soon those undecided about the change (leaning both for and against the change) began to reassess their middle ground positions and move toward feelings of victimization.

A New Performance Initiative

XYZ Company decided that a new award program would improve its lagging market performance. The employees were never told the criteria for qualifying for an award, however, just that they would receive one if certain performance targets were met. Instead of working to meet goals for improved performance, they had no choice but to continue doing their jobs as they always had done in the past. Disappointed with their new program’s failure to improve the company’s performance, the initiators canceled the award program in its first year. As a result, this award initiative caused confusion and mistrust throughout the organization—rather than creating a motivated workforce striving to achieve more challenging team goals in order to remain competitive in the marketplace.

Common Problems

These two stories represent common problems when large-scale change initiatives are introduced (as in the case of ABC Company) or more specific performance improvement initiatives are introduced (as in the case of XYZ Company). Often, the design of performance improvement initiatives is the issue; they are presented in the form of challenges to the workforce without providing the support systems necessary to accomplish their goals. For example, if an organization wants to improve safety performance, it might measure the number of injuries reported in a given period of time (monthly, yearly). It might then provide incentives to lower the injury frequency rate—such as shirts, jackets, and caps with safety insignias, or even cash bonuses for reaching certain goals. But these incentives may result in an unintended consequence: a reduction in the number of accidents reported rather than everyone working more safely.

Excerpt from “More Turbulent Change” by Peter R. Garber (ASTD, October 2012). For more information, visit http://www.astd.org/Publications/Books/More-Turbulent-Change

Peter R. Garber is the author of more than 50 books and training products on a variety of Human Resources and business topics. He has worked as a Human Resource professional for more than 30 years and is manager of Employee Relations for PPG industries, Inc., a Pittsburgh-based manufacturing company. He is also an adjunct faculty member at the University of Pittsburgh, as well as a lecturer and consultant.

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