I’m reading ‘Surviving Change – A Manager’s Guide’ from Harvard Business Press. It advises on managing in the downturn and opens with a discussion of different survival strategies – hard and soft! In fact, most change is a mixture of the two and the strategy chosen usually reflects the underlying culture of the organisation! How the mix works is critical because if it is not well managed it can become fraught with conflict and demoralising for people in the organisation; it can lead to a schizophrenic approach to customers.
The ‘hard’ approach to change is usually short-term and about economics – cut costs and increase cash flow! If a unit, or an employee, cannot demonstrate how they add financial value, out they go with very little ceremony or concern for personal well-being. The change is usually hard driven from the top with little wider engagement. Often consultants advise the magic inner circle and HR consultants deal with casualties that might cost the organisation.
Soft change focuses on developing the organisation to meet new conditions with high engagement across the piece from the leaders. Employees trust in the informal contract they have with the organisation and work towards its well being.
Sadly experience shows that neither soft or hard approaches work in isolation. The hard approach works in the short term but with that alone you are usually left with a demoralised and disloyal workforce – your best employees probably left at a rate of knots when you started the change. The soft approach can take years to embed and the market doesn’t stand still!
Most successful change is a combination of hard (rationalisation well managed) and soft (employee engagement and encouragement to learn new skills). But if change is a reflection of underlying culture and that has conflicts within it, a change can put the whole organisation out of kilter. What I’m thinking of here is an organisation that pays lip service to soft but is really hard. I believe in the downturn this is likely to be an increasing problem, particularly in the service sector.
Clients of service companies, particularly in the UK public sector, like to hear how well the company manages its employees. A tender panel may take great interest in training and development approaches but, of course, the final decision is usually made on the keenest price. In the present climate the client is likely to continue to seek cost reductions, which mean lots of change to be managed. This can lead a company into a kind of schizophrenia. It flags up all the good things its HR team would like to do but finds itself increasingly having to make hard, and very short-term, decisions. As a consequence, its own employees and its middle managers in particular, become confused and a little cynical! In turn this impacts on the service delivered to the client – so the client pushes harder!
What is the answer.? Well maybe it starts with a little more honesty on both sides! Perhaps clients should start being more realistic about how they expect their service companies to manage for the price they are prepared to pay. Perhaps the companies should be a little more honest with clients, and with themselves, about the real costs of delivering ‘cuts’ At the end of the day, a client gets what they pay for and it they want to see services well managed with employees committed to the services they deliver, they need to recognise there will always be a cost even in the downturn!