Organisational change management and loss-making moves

Noted journalist Vir Sanghvi narrated this story in a conference. In 1970, N R Narayana Murthy worked for Patni Computer Systems. Having good work relation with one of the Patni brothers, Murthy had great freedom to work. He hired a fresh engineer those days who became close work associate to him soon. In 1981, the other brother treated Murthy and his close associate roughly. 

The engineer, now famous as Nandan Nilekani, and the entire division resigned with Narayan Murthy. That estranged division created Infosys. Murthy and Nandan then wanted to create an organisation which was run professionally and beyond a family-owned enterprise. They believe that Patnis needed to change the way they worked then. It did not happen, but Infosys did.

Another person who could change the way his legacy worked is Kumar Mangalam Birla. He faced a huge resistance when he had to let go of 350 people who had Birla philosophy of womb-to-tomb career graph. In order to infuse fresh young people into the organisation, it was crucial. He brought in acquisitions, mergers and consumer products beyond commodities.

The business world is full of stories of organisational failures. Be it a Nokia, Blackberry or General Motors.

Is it so difficult to imbibe any new development? The psychology of change works with an interesting theory. That’s called readiness to fail. The same is also known as negativity bias. It says that our minds are wired with possibilities of failures. We always are better geared towards failing and are kind of relieved when it happens.

One of my clients has hired me to bring change in the management and do anything to make the organisation profitable. The person who made this company big was the biggest opponent of change and did not believe in re-engineering the growth. But, ‘it’s not easy to change,’ was the only excuse that kept flowing in various forms in the 8-hours long discussion.

Three steps to make change management work:

The need to move on the different road: If people fail to believe that they need to change, they will not. Need arises out of any condition that requires amendments. If everyone is contented or accustomed to being in the surrounding, then the challenge is bigger than envisaged. In the case mentioned above, I have advised the client to make existing situations a little less comfortable. The comfort zone has to have a break. The phrase is ‘heat the seat’. Do you want to jumpstart anything drastically different? Start with heating the environment, and simultaneously show off the cool breezy days that await a few years from now. Many might think of it as a carrot and stick approach. It isn’t but.

Difference is not always heavenly: Process re-engineering fails at various stages. But this is the most common. People implement quick change strategy thinking of a new horizon. Set the expectations right. Tell people what would change if they participate and how beneficial it would be. No need for complete transparency but a picture of destination keeps everyone excited or engaged about it. Hope works here in the same fashion people look at holiday destinations in awe and dream of being there.

The road map: People are wired for the fear of failing. That’s part of human psychology. It is crucial to understand ‘how’ we are going ahead, which is different from ‘where’. Fear of letting go of a dear thing or habit kicks in much faster in a person than the ability to acquire it. Combine it with the office grapevine and a pool full of frozen swimmers in front of you. Tell them the milestones and a clear path ahead. Prepare them for journey with excitement.

“Change is inevitable but growth is optional.” The graffiti on the wall reads clearer than spoken. 

The writer is a strategic advisor and premium educator with Harvard Business Publishing