by Saku Mantere, Henri A. Shildt, and John A. A. Sillince
This article is important because past
information has stated that it is an easy process to reverse change strategy. The
change from leaving a current strategy causes an increased level of anxiety and
tension from employees. The process in which management pushes the new
strategy, often leads to statements about the old strategy being outdated and
unable to provide the direction for the organization. Sensebreaking is the term
used by the authors to describe the process of facilitating change through the
use of discrediting everything the old strategy was based on. The use of
sensebreaking becomes problematic if a change does not occur and a company has
to return to the previous strategy.
Empirical research was used in this
article, through the direct and indirect observation of “the Office”. Data was
collected through site visits, public and nonpublic documents and individual
and group interviews. This research draws on the interpretive theory regarding
the management of change. The Office is a governmental organization that is
composed of four units: IT, statistics, accounting and administrative services.
The office was created and built on the strategy of being an independent entity
with a non-bureaucratic atmosphere. The new strategy would merge the Office in
a way that they would become a member of a larger organization. Management
pushed the change through the use of sensebreaking. The employees eventually
accepted the merger and new strategy. Then there was a cancellation of the
merger, top management tried to reverse the strategy back to the original
strategy of the company. The managers thought that this would be easy to
reverse back to the pre-merger strategy. The employees however did not accept
this reversal; they thought that the Office was going to fail. Management’s inability
to get the employees to revert back to the original organizational strategy put
the organization in a difficult situation without a broadly accepted strategy.
The key findings in this analysis show
that reversal of strategic change is difficult to implement. When a new
strategy is being implemented, management tends to discredit the old strategy.
This is done in order to show employees the need to progress to the new
strategy. However, when the old strategy is said to be outdated and unable to
perform in the industry, employees resist going back to the original strategy. Management
loses its credibility and the organization is left with no strategy.
This study allows
managers to understand the importance of how they choose to facilitate the
change in their company. It is important to understand how likely the firm will
go through with the change, and if there is a chance that the change will not
actually occur. It is important to understand that reverting employees back to
a previous strategic plan is not as easy of a task as it seems.
References:
Great Article! I think it is right when it says that going back to an old strategy is not an easy task. I believe this happens because firms spend so much time "hammering" into their employees heads that the new way will be so much better. When in fact, the management has no clue either. I understand that in order for the whole firm to buy into the new strategy the old one must be descredited. However i think there are ways that this can be without talking bad about the new strategy. I think that instead of discrediting the old strategy, they must called the new strategy,"changes" instead of using the word "new". This way if for some reason the new strategy fails, it will be easier to say that the changes didn't work. Overall great article and it really brings into light how hard and risky it is to bring a new strategy into play. While it can benefit the firm, if it doesn't work it can truly alienate the workforce.
ReplyDeleteFor a while we have been discussing the components of strategy and what is required to create great strategy and ways to make it sink into the organization and its culture to make the organization successful. I think it goes back to the importnant fundamental we learned from the paper that discussed Intel's successful exit. If the organizations define the specific exit criterias and communicate it specifically with backup plans, it should be acceptable for organizations to reverse the changes. Also, larger the organization, longer it will take to make all changes based on new strategy and longer it will take to realize the success or failure of the decisions. It is always difficult to change paths as organizations grow bigger. For smaller organizations, it should be comparatively easier to achieve.
DeleteGood article. It did make me think about failures too...
I agree that companies should be more careful with their wording when they try to implement a new strategy. However, if they do not discredit the original strategy, it becomes more difficult to get support from employees. I think a company needs to weigh the risks of a reversal being a possibility, then they should decide how they will get employees to accept the change.
DeleteI think that smaller organizations should be able to overcome the reversal much quicker because their are a smaller number of people. Smaller organizations typically can make turns in strategies easier than larger organizations.
I think this was a great article. The study itself was not surprising to me. This article shows the importance of changing a strategy. It is not one in which a company can say let's change our strategy and if it does not go well we can keep our current strategy. Changing a strategy is almost an all or nothing move. It takes a lot of time, energy, and resources to change the strategy. Everyone at the company has to buy into the new strategy. This is done by telling how the old strategy was not getting it done. To reverse all the rhetoric on selling the entire company on a new strategy could be extremely harmful. This is something that all executives need to take into consideration. Good article.
ReplyDeleteI agree, it is difficult to get full support of a new strategy unless you hammer all the bad aspects of the current strategy. At this point the company must move forward because if not, then the employee moral will be greatly reduced.
DeleteGood article Lauren. I agree it is hard for employees to change strategy. If this change in strategy is important than the organization need to educate their employees on how to accept this new strategy. Let employees know how this new strategy will benefit them. It is a human tendency, if people know something is going to benefit them they accept change easily. One such example came into mind was implementation of electronic medical record system in hospitals.
ReplyDeleteWhen electronic medical records were implemented, was it difficult for employees to understand the importance? I agree that people need to be able to relate and understand the added benefit of the change, or they will not be able to understand the importance of why the change needs to occur.
DeleteThis paper has good points in reversing a strategic changes process. I do agree the reversal of strategic change is hard to do for organization. The external events could lead to the failure in the implement of new merger strategy, but the internal environment would keep top managers down to return to their strategy before merger. Changes are not easy for top management, nor are for the firms. In some meaning, it reflects the importance in setting up a reasonable long-term strategy for the sustainable development of a company. Otherwise, it may suffer the pain in an unsuccessful attempt to return to the old strategy.
ReplyDeleteDo you think that maybe organizations could figure a way to protect them from this reversal effect? I agree that it is important for a long-term strategy to be implemented for sustained growth. However when this strategy needs to be changed, should management point out all the negatives to get employees on board, or should they just focus on the new strategy? I would like to see this research taken a step further.
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