Page 228 - Managing Change in Organizations

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The change equation
Dissatisfaction with the present will only lead to high energy for change if
there are high levels of shared aims and knowledge of what to do next. Without
these shared aims and knowledge, dissatisfaction will lead to demotivation,
despondency and apathy. There is another equation, however. For change to
occur:
EC > Z

where Z is the perceived cost of making change.
The energy for change must be greater than the perceived costs of making the
change, both economic and psychological. In fact, if we have no shared aims
and no knowledge of what to do next there will be so much uncertainty that
people will expect the ‘costs’ of change to be high. We shall see in later chapters
that it is all important when designing and managing change to ensure that
both the means of introducing change and the impact of change are designed
to build the energy for change. This chapter aims to demonstrate a way of
approaching organizational diagnosis and assessment and the importance of
ensuring that any attempt to diagnose the need for change is carried out with
the recognition that the appropriate end-point is acceptance of change and
energy for changing.
To return to International Engineering, one of its main problems was that
many of the engineers who developed management and leadership potential
were believed to have resigned from the company frustrated by ineffectiveness.
This left the company less able to create the energy for much needed changes. It
had lost many of the people who might have been involved in developing new
business, new technology and the like. The ability to attract, motivate and retain
people is an important aspect of the effective organization.
Now we turn to the use of a survey to assess the ability to attract, develop,
retain and motivate leadership talent. Kotter (1988) has developed a very useful
questionnaire for use with senior managers.
The first part of the questionnaire deals with the managers’ assessment of
how well the systems and practices within the organization supported the objec-
tive of attracting, retaining and motivating a sufficient number of people with

the leadership potential to fill senior management positions. Table 12.2 shows
the results obtained from International Engineering. Listed on the left are the
factors that the managers were asked to assess. The right-hand column shows
the percentage of managers who felt that the factor was less than adequate to
support the objective.
The questionnaire also reveals the managers’ assessment of how well the orga-
nization’s systems and practices contributed to its ability to develop leadership
talent. Table 12.3 shows the percentage of managers who felt that, on the factors
listed, the company was less than adequate in spotting high-potential people and
identifying and meeting their developmental needs. When interviewed about the
ineffective systems and processes reported in the questionnaire responses, senior
managers often referred to short-term pressures by way of explanation.
Management development was seen by some to have no immediate payoff and
was therefore not used. Rotation was not practised because managers did not
wish to lose good performers or people with potential. Ineffective and inadequate

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