COMPANIES in the twenty-first century are constantly in transition. For an increasing number of today’s organisations, transition means a merger or acquisition or embarking on outsourcing, which is growing rapidly.
Offshoring alone is estimated to increase by 30 per cent per year over the next five years. Even for companies who sustain their existing structure, the need to respond to fast-moving markets and more demanding customers, together with the pressure of a growing global scarcity of talent, means almost 25 per cent of managers in a typical Singapore company will change jobs each year.
Organisations could do a better job of managing all these transitions. International management consultant McKinsey & Company estimates typical productivity losses of 45 per cent during a major transition.
When one manager changes a job, the productivity of at least 12 other people is impacted for an average of over six months. Over the long term, as Peter Cappelli of Wharton Business School says: “The constant churning caused by these reorganisations generates costs and develops long-term cynicism.”
No wonder only 12 per cent of executives are currently very satisfied with their organisation’s ability to facilitate organisational change.
Every CEO knows what makes the difference between rapid response companies and those who suffer from strategic drift or failed attempts to change: its people.
Get the right people doing the right things, as Jim Collins says in his all time best-seller Good To Great, and success will follow: organisations with above-average bench strength are four times likelier to outperform their industry peers.
But, aligning employees with a company’s strategy is not easy, especially in a time of organisational change. People are distracted from their jobs by worries about their own job security, their future with the company or the fate of their colleagues.
Some will be tempted to end the uncertainty and disruption by going elsewhere. Others will stay, but their performance is likely to suffer as they struggle to understand new expectations within a new organisational structure, and perhaps in a new work location.
With all these challenges during the transition of the existing workforce, why not just hire new and more responsive employees? Two reasons: first, anyone entering an organisation will face many of the same transition challenges as existing employees. Second, good people in every industry are at a premium.
Leaders who want to accelerate the responsiveness of their organisation need to enhance the speed and success of their existing employees’ individual transitions.
Each employee will be at a different point in the alignment process with the organisation’s goals. Some will fully understand the strategy, have a clear vision of their personal role in it, and be able and willing to present themselves effectively to secure the right positions in the new organisation.
Most employees, however, will be less aligned. A recent study showed that 80 per cent of senior executives believe that less than half their people fully understand the company’s strategic goals.
The problem is not just one of information. Even those people who do understand the company’s strategy and their part in it may find their productivity impacted by disruptions to the jobs of colleagues, and by uncertainty over their own future.
This can lead to increased levels of stress and diminished productivity that can do serious damage to a business. In the United Kingdom, for example, three times as many workdays are lost to stress and other mental health problems as to industrial disputes, and 58 per cent of workers report stress due to their job.
Support and training is usually composed of isolated events that fail to have an impact on employees’ day-to-day activities.
According to one major study, only 5 per cent of employees refer to their development plans every day, and 14 per cent almost never do, while only 38 per cent believe they work in areas where they best perform.
See to individual needs
Organisations providing transition support need to recognise that people have individual motivations and capabilities, and they need to align with the organisation in unique ways.
In a company looking to outsource a function over time, for example, employees need to balance making plans for their future with maximum performance on their current job. Getting help with the former will make them far more inclined to devote themselves to the latter.
Even in a relatively simple transition, individuals will be at different stages of transition readiness. Once companies have a true read on where people are, they can help each individual align accordingly.
To be completely effective in enhancing an individual’s speed and success of transition, support needs to shift, at some stage, from general guidance and information-giving to personal interaction and coaching.
Transition responsiveness will increase if the organisation’s needs for cost-effectiveness and scale are balanced with its employees’ desire for high-touch, personalised help.