Going Below the Waterline for Strategic Change

Abstract

This research project is concerned with an assessment of how organizations go below the waterline in an attempt to institute strategic changes. To facilitate a better explanation as to how this is often applicable in organizations, a company, CRH plc (US) has been identified.

To this end, the study attempts to explore the organization structure, span of control, and the communication framework of the said organization. In addition the principal business needs and functional requirements necessary for strategic change in an organization are also explored.

Further, the project organization (for example, process model, participating groups, as well as the bottom-line approach) as applicable in organizations is assessed too. Moreover, the hindrances to strategic change are dealt with at length, as are the pros and cons of strategic changes in organizations.

Organizational development, patterns and beliefs are some of the other issues that this research paper sought to address. Finally, ways through which change could be implemented in organizations to transform these are also addressed by this research paper.

Outline

• Project purpose
  • Improve the overall efficiency of organization, customer value enhancement, harmonizing conventional organization structure with strategic management changes.
• CRH plc (US).
  • Introduction of the organization, its organization structure, span of control, and communication process.
• Principle business needs and functional requirements for strategic change
  • Organization requirements for strategic change (vision, community culture)
• Project organization
  • Process model: proposed alterations on organization span of control, augmented communication.
  • Participating groups: employees, the management, shareholders, customers, resource providers, the government, suppliers, and the media.
  • Bottom-line approach: iceberg theory explanation, and its connection to the organization.
  • Hindrances to strategic change: internal (political priorities, negative components, spending as a way of avoiding under-spending, inclination towards risk avoidance aversion, inappropriate technology and processes) and external (misinformation off the media, and politically instigated pressure groups.
• Pros and cons of strategic change in the organization
  • Organizational benefits (for example, enhanced organization growth) and personal benefits (for instance, a rise in productivity).
  • Limitations (shifts in the workload, economic loss and inconveniences).
  • Organization patterns and beliefs: rules and belief patterns shapes organizations, and the role of culture (symbols, rituals, beliefs) in an organization.
  • Organization development: role of organization development in its performance
  • Accelerating implementation of change: an exploration of a need to mobilize employees and management in an organization to implement strategic change, as well as preparing them for possible resistances.
  • Implementing change: types f changes in organizations (participatory, forced, transformational, and telling), and the role of leadership in the implementation of strategic change.

Project purpose

The purpose of this project is threefold. First, it intends to improve the overall efficiency of the organization in question. Secondly, the project aims to enhance the customer value through instituting changes that shall motivate the staff, thus augmenting service delivery channels to the customers.

Finally, the project shall attempt to harmonize the conventional organization structure, span of control, and communication methods, to reflect an organization structure that renders itself more vulnerable to strategic management changes with minimal resistance.

CRH plc (US)

CRH plc is a group is an international group that handles building materials. The group has its headquarters in Irelands, but has operations in 22 countries, including the United States. As of now, CRH is involved in three core businesses that are also related. These include primary raw materials, value-added building products, and a specialization in the distribution of building materials.

Apart from an official listing on both the London and Irish stock exchanges, CRH plc also has a presence in the US’ NASDAQ. The company has enjoyed an 18 percent annual return on its shareholders, and the average has been consistent ever since the group was established in 1970 (Business case study, 2000).

Organization structure

CRH plc heavily relies on the matrix organization structure. At CRH plc, individual project managers are under the authority of a vice president to the relevant divisions, to whom they report directly. At the same time, the departmental heads also ensure that they share information with other departments.

If at all an organization aspires to achieve maximum performance, then the design as well as the structure of such an organization has to match with the changing environment under which such an organization is operating at. At the same time, the importance of an organization’s culture becomes apparent; in as far as its relation to the structure and design of an organization, and this thus creates a need for the emergence of new organization forms (Richard, 2007). As it were, the organizational design of any given organization is what gives it life, and vice versa is also true.

The structure and the design of an organization will usually be intertwined with the various human resources management aspects of such an organization. For this reason, it thus becomes evident that the structure of any one given organization plays a significant key role in as far as the important human resources aspects of such an organization are concerned. In addition, the structure of an organization, as well as the underlying principle design of such an organization have also to be in tandem with the organization’s core purposes, and the larger environment under which such a business operates.

Otherwise, the success and survival of such an organization are more than likely to be positive. The importance of an organizational structure is often overlooked, as evidenced by the prevailing gap between the corporate strategy of a business establishment, as this aspect is usually rarely considered with respect to the strategy of such an organization. The design of an organization structure is often the role of a business manager, and some of the managers have really neglected this vital role.

Span of control

In terms of a pan of control, there are three ways through which managers can interact with their managers at CRH plc. One is a direct method, and this involves a one-on-one encounter. Also, the manager may also interact with the subordinates via a cross-cultural relationship, and this involves the employees interacting amongst themselves. Finally, another mode of interaction is the group method that involves various subordinates. This indeed illustrates a wider span of control. The organization operates on a decentralized organization management system. In this regard, the authority and power at the organization are usually delegated in all levels of the organization, as opposed to a case where the power and authority are vested in a centralized position, meaning they are vested to a few managers (Business case study, 2000).

Communication

Due to the differences in terms of culture and language in the diverse regions that the company operates in, the company is very much committed to communication as a tool for enhancing its growth and development. To this end, CRH views personal contact as being an essential means for its effective management of the various products divisions. However, use is made of other forms of communication to augment personal contact. For targeted and timely communications, the company has dedicated the use of email and video conferencing (Business case study, 2000).

Principle business needs and functional requirements for strategic change

For anyone organization to attain sound and meaningful strategic change there is a dire need for such an organization to both think and act “in real-time” so as to avoid being complacent, a perfect recipe for resisting change (Johnson & Scholes 1997).

In addition, such an organization ought to have a clear and vivid view of its future. There should also be a community culture in place, so the strategic change can be achieved as a team effort. Furthermore, the organization should aspire to make business sense of ambiguous, complex, and often conflicting external and internal truths (Mullins 2005).

Project organization

Process model

The project under study is an organization strategic change plan for CRH plc whose aim is to facilitate the introduction of change within the organization for purposes of improving performance. To achieve this, various alterations have been proposed with regard to the span of control of the organization. Its organization structure, as well as a shift from a centralized power system (power and authority vested in a few individuals) to a decentralized one (power distributed throughout the hierarchical structure) (Business 2000).

There is also the issue of augmenting communication within the organization by, for example exploiting information technology, such as the intranet, for more efficient and quicker sharing of information for diverse groups of stakeholders to the organization.

As such, the intention of this project is to facilitate the entire organization’s benefit from it.

Participating groups

Since this is a project for the entire organization, the various stakeholders shall thus be called upon to be active participants in the implementation of this project. The stakeholders include the employees, the management, shareholders, customers (both internal as well as the external), resource providers, the government (local, regional as well as international, owing to the diverse geographical operations of the organization). The internal and external suppliers shall also be involved, as well as the media.

In addition there shall be a need to engage the services of technical assistance, in terms of consultation and advice in the implementation of this project. As such, management consultation in the area of strategic change shall be involved. Furthermore, a legal expert will be necessary to facilitate the drafting of the document and other legal activities.

On their part, the shareholders shall be required to give their approval for the implementation of the project, so that the necessary resources may be mobilized. Financial providers will thus be involved too, for the provision of the necessary finances. The management shall be expected to lead by example, and facilitate the implementation of this project.

Employees are also expected to follow suit, while the suppliers may have to comply with the stipulated requirements of say, improved standards of raw materials. Technical expertise is also necessary, seeing that the organization in question is in the business of building materials.

For this reason, the opinion of a building expert shall be sought so that the best strategies may be laid down on how best to improve the efficiency of the organization, to the benefit of the consumers. The consumers too, shall be required to air their opinion on their expectation regarding the products of CRH plc, and whether or not they are satisfied with the level of services that recurrently receive.

Moreover, plant engineers will need to be consulted so that they help project the expected performance of the plant, and the attainment of the proposed performance improvement measures, in light of the organization’s capacity.

Bottom-line approach

According to the change theory of the iceberg, the things responsible for sinking efforts for change are the same ones that are responsible for sinking efforts for change (Haines center for strategic management 2005).

This is that “stuff” that is “below the waterline”, and which is often invisible. In the case of an iceberg, only about 13 percent of its mass is above the waterline, and hence is usually visible. From the perspective of an organization, such a scenario normally corresponds with the absence of focus on at least two out of three life realities levels. This means that their lack focuses on those underlying structures and processes necessary to effect change in an organization.

This concept has often been termed as “content myopia” (Haines center for strategic management 2005). It is the failure to pay attention to structures and processes, and yet goof structures and processes rely on change to facilitate the achievement of that desirable change.

Tichy (1983) posits that in envisioning strategic change with reference to an iceberg, such an analogy emphasizes a vital aspect that is frequently overlooked while change efforts are being assessed. Those activities illustrated in “steps above the waterline” develop from the theories and assumptions of people regarding organizations and human nature.

Such assumptions then, tend to be under normal circumstances, inherent, and thus underneath the waterline. This calls for an effort to uncover the models and assumptions that guide such a program. When this is done, then we are better able to understand that failure and success causes, thus aiding in the transfer of approaches to alternative settings.

Taking such a scenario in an organizational setting could mean ht unless the management is ready to dive “below the waterline” in their attempt at effecting change, there are a lot of activities that may not be unearthed, meaning that the projected change may not be effective after all. Welter (2005) further opines that “going below the waterline transcends a mere use of the mental faculties.

It often entails knowledge of relevant theories, concepts, and content triggering that which we are thinking about. By “diving below the waterline”, it is an attempt at understanding the basics involved in for example, business decisions, such theoretical fundamentals as demand and supply, as well as motivation theories, are some of the fundamental forces that impact business decisions, intentions, and results. For instance, demand and supply are vital in the decision arrived at regarding the issue of labor and pricing.

Hindrances to strategic change

Bateman and Zeithaml (1990) talk of an ‘implementation dip’ in reference to organization change barriers. The ‘dip’ reference was initially applied in the context of a school; this concept nevertheless finds application in other organizations as well.

Moreover, Burnes (2000) has issued a word of caution to managers with regard to organizational culture, with an emphasis that for managers to attain success, it is important that they be flexible in behavior and style as well. Buchanan and Hucczynski (1991) have clarified that in the absence of a management system that sounds in terms of performance, then there is the risk that looms large.

Hindrances to strategic change in an organization could be both internal as well as external. Internal hindrances include political priorities, negative components, spending as a way of avoiding under-spending, inclination towards risk avoidance aversion, inappropriate technology and processes (Detert 2000).

On the other hand, external hindrances include misinformation from the media, implying that integrity from an organization is not communicated to the public. Then there is the issue of pressure groups that are politically oriented, thus hindering the implementation of timely and efficient mechanisms of change.

In addition, security constraints are another external hindrance to organizational change, meaning that the credibility of an organization needs to be augmented. Having skilled labor readily available means that neither the spread function, nor an importation of labor may be imported by the firm, a clear indication of a lack of application of the “below the waterline strategy”.

Hindrances to strategic change in an organization may also be as a result of time constraints, less staff, as well as the desire by an organization to develop its workforce to the level that they are better able to undertake new tasks in a competent manner (Johnson & Scholes 1997).

Reduced ability of the part of the employees, and complacent managers who fail to motivate their workforce in as far as strategic change is concerned, are yet other hindrances to the attainment of the desirable change.

Pros and cons of strategic change in the organization

The benefits of strategic changes in an organization are pegged on what the organization set to achieve in the first place. In the case whereby such a focus is inclined more towards individuals, then personal benefits in terms of change in behavior may be realized s well.

However, a group focused outcome realized both organizational and personal benefits (Luffman 1996). This overall benefit impacts on the enhanced performance and efficiency of such an organization. On the other hand, an organizational focus, changes in the processes and working structures leads to effectiveness and efficiency (Mullins 2005).

Clearly, a combination of all these benefits yields the best outcome.

A 1978 review by Porrras and Berg of some 35 studies conducted on organization change revealed that the organization which had implemented a focus on performance outcome (turnover, productivity, and profit, had a 51 percent chance of getting positive outcomes.

On the other hand, organizations employing a focus of processes had a 46 percent change of obtaining positive change. In 1983, Guzzo and Katsell undertook a review of some 207 experiments that consisted of personal approaches, with an inclination on training, setting of goals, feedback, and appraisal.

The study showed that individual productivity improved tremendously in 87 percent of the cases. Another review study by Golembiewski et al (1982) that involved 574 isolated development initiatives in organizations had an 80 percent chance of obtaining positive outcomes (Mullins 2005).

On the negative side, there is a high likelihood that since change is a new thing in an organization, it could as well be viewed at suspiciously, and this derails implementation attempts (Worcester 1991). In addition, strategic change may lead to the loss of jobs of several employees. For example, advances in information technology have led to the embracing of the latest developments of the technology by organizations.

As such, employees are expected to keep pace with these latest developments. Otherwise, they become obsolete, and the company may have to replace them. Jobs could also be lost as a result of streamlining measures, as well as automations. Furthermore, forced change is more likely to create animosity between the change management team on the one hand, and the employees of an organization, on the other hand (Johnson & Scholes 1997).

Other generic issue such as shifts in the workload, economic loss and inconvenience are likely to be recorded by employees as their hindrances to the embracing of strategic change in an organization (Mullins 2005). More often that not, employees will hesitate to address some of the concerns that could be emotional like social disruptions, status loss, insecurities, or the fear of the unknown.

Organization patterns and beliefs

Basically, the practice of shitting pattern in an organization is an explanation into the notion that organizations gets constructed, as well as constrained, by the rules and belief patterns that creates behavior, and in due course, decides on how such an organization performs. Baligh (2006) opines that that the performance of an organization relies heavily on the blind application and unchallenged behavior patterns of the past.

To this end, the author prevails on us to realize that we are more of creative creators in as far as such patterns are concerted, as opposed to passive victims, or narrators. As such, we are equipped with powers that enable us shift these kinds of patterns. This is more of corporate culture revolution, against a backdrop of rebellious managers who might as well be regarded as tyrannical replicates” (Burnes 2000).

In essence, such managers are able to set themselves free from the tyrannical strings that binds them, attend freedom and eventually, enhanced performance. According to Krefting and Frost (1985), the description of the culture of an organization often entails shared pattern beliefs and meanings, rituals, symbols, and myths. All of these evolve by and by, in effect acting as the social glue that holds an organization together.

Organization development (OD)

The performance of organization comes about as a result of the way such an organization has designed, identified, organized, deployed, allocated, and delivered its resources. In addition, organization performance is also as a result of the way the human resources at an organization are able to utilize the available resources in the organization.

To this end, the employees of an organization, through their individual behaviors in the undertaking of their duties, enhance the performance of an organization. Should performance fall short of the set standards, it is at this time then, that change may need to be instituted in such an organization (Mullins 2005).

Ott (1989) asserts that a majority of the organizational behaviors are encoded by the basic assumption patterns that exist within any one given organization. With time, such organizational behaviors turn into underlying factors, and these often goes unquestioned.

For this reason, the behaviors become patterns, and patterns turns into habits. It is these habits then that forms the organization culture, which gets fixated in the minds of the members of an organization. With time, such behaviors become so pervasive and basic such that they come to be regarded as fundamental truths, without as much as questioning them.

Accelerating implementation of change

In order for change to be visible in organizations, people have to change first. The movers of change have to alter their mindset to turn strategic change into one that can be incorporated into the daily activities of an organization (Ott 1989). The concept of ‘going below the waterline” initiates an organized process that enable the management relies what could be regarded as deep operation patterns.

When such patterns are explored, points of leverage can then be realized, and these facilities an effective shift of the organization. Strategic change may only “stick” in an organization when it has been implemented this way. Change is neither revolutionary and nor is it incremental, but tends to be rather continues (Lang 2001).

In an organization, change come about as a response to challenges and opportunities in such an organization, and these could be from within (internal), or without (external). In as much as is often viewed at as an ultimate benefit to an organization, it nevertheless threatens the powers that be, that is, the conventional way of getting things done, as well as behavioral patterns in an organization.

As such, strategic change I bound to meet with resistance in an organization, and this could explain the need to have the mindset of the stakeholders in a firm that shall be affected by the change. Mintzberg et al (1998) has argued that responsive strategies are never conceived immaculately, occurs sporadically without any schedule in an organization with a capacity to accommodate these changes.

Both people and organizations offer more resistance to being changed, as opposed to change itself. Senge (1990) defines this change resistance as a system’s reaction in a bid to uphold an inherent objective. To facilitate a successful shift in the mindset of the members of an organization, it becomes important that the initiators of change assist such employees to adapt to this transition, while at the same time being sensitive to their position.

Perhaps an open discussion of potential resistance causes would be a good starting point (White 2007; Howell 2003). According to McCoy (1996), the inclusion of employees in an organization’s strategy helps accommodate their integral ability to be flexible. It is this flexibility that permits a business emphasize on various strategic fundamentals in tandem.

Implementing change

As has already been established, humans and organizations resist change. That being said, how then, is it possible for change to be effectively implemented at an organization in the face of barriers and resistances that abound? Basically, organizations tends to encounter four kinds of changes; participatory, forced, transformational, and telling (Luffman 1996). These then, ought to be viewed at as the fundamentals of change.

The management team mindset is crucial in change implementation. If the team is unwilling to anticipate the project succeeding, then the implementation of change becomes futile. Moreover, such ha team ought to possess leadership qualities (Mullins 2005).

In this regard, leadership acts as the much needed roadmap for steering the company to greater heights. It is thus the responsibility of any top manager in an organization that wishes to implement change to be more concerned with the provision of customer value (McCoy 1996). This is attainable through a close association between the top manager ands the organization’s associate. In turn, these associates shall facilitate in the actual implementation of the desirable change on the ground.

Summary

From the change project, one of the main results was the management’s perception of strategic change as way of enabling an interaction between planning and implementation of the strategies of the organization. This implies that the movement favors strategic plans that are in tandem, as well as changes in the selection of processes and structures.

This change project consisted of clear considerations as regards the roles of the various stakeholders in the organization, as well as the surrounding environment, both internally, and externally. The outcome of these results is in line with those of Hatch (1997) regarding planned change in an organization.

Furthermore, the management showed commitment towards the decentralization of authority throughout the organization, as well as a willingness to have a wider span of control I the organization, for faster implementation of procedures and processes.

Besides, competence building of both the employees and the management was also a consideration. Moreover, the change process, as well as the building of competence helped generate novel project changes and learning.

Strategic change benefits could also be enhanced by ensuring that once a project has been initiated, the strategic options method or idea that the project assumes has been understood fully at both the managerial and functional levels of the team involved. Additionally, it is the duty of the project team to see to it that all procedures involved hinges on certain priorities and principles.

These could include for example, enhanced quality, cost minimization, skills promotion, cooperation stimulation, and competency promotion. It is also important to appreciate that strategic management hinges more on the process itself, and not the ultimate outcome.

Nevertheless, the benefits ensuing as a result of the implementation of strategic change in an organization ought to be observable readily, and so the more reason why both the practical and conceptual benefits of change should be presented. Moreover, change in an organization should not also affect key relationships in an organization in such an adverse manner as to hinder the achievement of the set goals.

Managing change in an organization demands that the team charged with this responsibility gets below the waterline, literally, so that they are able to see for themselves how work is accomplished on the ground. In addition, the other team and employees as well should follow suit. In order to effectively manage change, the maximum amount of warning ought to be communicated to those who shall be affected well in advance of the actual implementation.

The reason behind the change should also be explained. In addition, people should be involved at both the planning and implementation stages and communication should be an on-going process throughout the entire period of introduction, up to and including the actual implementation. Furthermore, change should be introduced in a gradual process, starting of course with the activities that are likely to yield faster results. Employees of an organization require training and support when implementing change.

Organizational transformation

Transformational change means that those cultural values attitudes and beliefs that are both outmoded and undesirable in an organization are changed. It is thus the responsibility of the change management team to identify these, and also devise ways and mechanisms through which to accomplish it.

According to Detert et al (2000) a majority of the failures recorded in organization transformations comes about as a result of the inability to identify with the culture of such an organization. Strategic change tends to create friction between the organization and the individuals in it have come to know and identify with; their culture.

Over time, they have established cultural bonds with the organization, have constructed various belief patterns that identify them with their organization, and even come up with symbols that distinguish them from other organizations. As such, organization culture bears a lot of attachment to both the company and the employees. For this reason, any attempt to alter it without first appealing to the mindset of the employees and of those behind the management of an organization, is a perfect recipe for failure.

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