Implementing Changes in an Accounting Firm

Introduction

A lot has been said about the change in many spheres of modern society. Be it academia, business, or even evolution, the common denominator in all these scenarios is that human nature is to change, as well as to resist it. The study of change, its causes, effects, and consequences probably has the largest application in the business world, where it is often the case that a large number of people derived from different backgrounds, cultures, and traditions will be working and interacting with each other and when the status quo is shocked and changed, react to the situation in a variety of ways. This is because much of the company’s culture is defined by the cultures of its employees, its customers, and the general operating environment. When a person joins an organization, they bring with them, values, perceptions, and attitudes that had already been developed prior to their entry into the organization, and these play a major role in determining how they deal with change, both at the individual level, as well as at the overall corporate level (Whipp and Pettigrew, 1991).

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Background

The management of an accounting firm where I had done some internship work decided to upgrade their employee monitoring and evaluation infrastructure, specifically, how to audit staff attendance to remote client offices for the purpose of obtaining evidence to be used in the audit tests and procedures was recorded and reported. At the time, this was done informally and by the very employees who were being evaluated, resulting in inaccuracies in the reports as well as a dismal performance by the staff, as a direct result of the weakness in the control system. It was therefore resolved that an electronic system was to be put in place, wherein the employee would punch in their corporate staff identity at the time of entry into the client premises, as do the same at the time of exit.

This was supplemented by their having to prepare detailed reports of their activities as well as the internal performance evaluation department interviews of the staff at the client office to ascertain the activities of the company auditors and thereby ensure that they are in accordance with the company’s policies and code of conduct. The conflict arose from the employees who were the subject of the evaluation claiming that the system was infringed too much on their working space, resulting in a stricture on their performance and thus making their tasks all the more difficult. The nature of the execution of the new plan, especially where they were to be evaluated based on the opinions of the people they were there to investigate; (the interviews of the client staff) also represented an important issue of consideration.

Objective

Management was therefore faced with the dilemma of convincing the employees that the new system was put in place for their own good, both directly, in that since when the performance could be more closely monitored, rewards would be distributed among them more equitably, and indirectly, as closer monitoring was likely to increase productivity and the success of the firm, which was sure to translate to benefits for the employees. Management, therefore, had to devise a strategy that would see the acceptance and implementation of the new system by at least 85% of the employees, so that the firm’s overall performance under the system may be in turn measured and compared with the previous performance to determine the value-added to the business by the change in policy. The effectiveness of the change processes was to be determined by the wilful acceptance of the system by the employees, as demonstrated by their participation in its implementation.

Implementation strategy

The strategy that was followed during the implementation was based on John Kotter’s eight-step change model, which was applied as follows. To start with, management undertook to create a sense of urgency, to inspire the employee to give the system a chance and make things happen. Emotional and creative aspects of the audit team were also focused on, in which they were introduced to the management vision of what the firm hoped to achieve and the role played by the system in the achievement of this vision. To ensure that the strategy is successful, the system was first introduced to people who had the proper skills and traits that were most likely to succeed, and develop an emotional commitment within them, which then served as a trendsetter for the rest of the staff.

The employees that were most affected by the introduction of the new system were also allowed to air their views about it, they were involved in all stages of the planning, implementation, and evaluation. They were also instructed on all the technical aspects of the new system in as simple a way as was possible. They were also empowered and encouraged towards accepting the system with rewards and recognitions going out to achievers under it. The implementation was undertaken in a step-by-step fashion, with each step representing an achievable objective that was first completed before the next was tackled. Management was persistent and encouraged the same, by highlighting past achievements, keeping focused on future milestones, and facilitating effective progress reporting for evaluation and control purposes. Finally, to ensure sustainability, the new system was forged into the company culture, it became part of the norm which was affected by the management inculcating it into all new recruits and reinforcing the attitude of existing staff through performance-based promotions and similar rewards.

The process of change

It is common for changes to an organization to fail on account of how it was executed. When the people concerned feel that it has been imposed upon them, the only recourse is to turn emotional, which may escalate to being irrational and the result is a blatant resistance to the change. Objectivity is lost and management is alienated from its own employees, which is a perfect recipe for catastrophe, especially in today’s highly competitive environment. Despite this, the management of the firm, led by the change agent, the director who had identified the need for the change kept optimistic that the change if implemented properly would be a success. They had faith that in the end and after some persuasion the employees would see the value that would be added to the business should the new system be implemented, and consequently set forth a plan to make this happen.

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The audit staff, who under normal circumstances work under enormous pressure to meet steep deadlines as well as remain above the standards of accuracy, were very likely to be unresponsive and emotional to the new system, and therefore management had to find a way of diffusing the tension that was created by its introduction. This was done via such avenues as identifying an informal leader amongst the staff and concentrating on him, explaining the benefits of the new system both to the staff individually and to the firm as a whole. Once the staff leaders were turned around, it was quite easy to sway the rest to accept the change. In relation to authority and power within the firm, management undertook some policy adjustments that resulted in a more horizontal type of hierarchy, wherein the views of all the stakeholders were taken into consideration before any major matters of policy were put into effect. The decision-making process saw a dramatic increase in the delegation of authority and responsibility so that only those closest to the affected could make decisions.

This, coupled with a strong top to bottom as well as bottom-up communication channel network ensured that the general feeling that was created was that of togetherness and pride in the business which all but eliminated any sentiment of imposition of the system on the employees. The personalities of the employees also played a major role in shaping the implementation strategy for the change. This was especially true when picking the leaders among the staff, which when they accepted the change could convince their following to do the same. These people were chosen on the basis not only of leadership traits such as charisma, confidence, and assertiveness but also had to be emotionally mature patient, and tolerant. Unfortunately, the firm’s most reliable auditors, due to their habitual, process-oriented, and steady approach to their work which made them quite dependable also became the most difficult to accept change, since it was a distortion of their already established comfort zone. On the other hand, the readiest to accept the new system were the ones who were always devising new ways of doing the same things, often not getting them done right, these demonstrated high-level adaptability capability, and personalities such as these were targeted to be trendsetters for the rest of the group because they made the new system not to appear so bad.

Sustaining the change

After the change objectives have been achieved, there still remains a challenge for the management team to ensure that the employees do not revert back to the old system of doing things. This can and is being achieved at the audit firm via several ways. First and probably most important is to ensure that all the concerns that were voiced by those affected by the change are ironed out once and completely. This will ensure that they do not go back, since they have no reason to. Next, all members of the firm must understand the working of the organization and its role in it. If the change alters these roles the new roles must be effectively and clearly communicated to the people concerned to avoid possible conflicts such as tasks overlapping and gaps. The involvement of the employees as the system grows and develops is also paramount if the changes that have been realized are to be sustained. Any updates or changes to the new system must only be undertaken once consultations have been held and concluded with the people affected. This involvement includes the continual training of new staff and retraining of existing staff on the use of the new system. Successful behavior that is a consequence of the change should be reinforced and encouraged through praises, acknowledgments among other rewards.

References

Kotter, J, (1995) ‘Leading Change’ NY: Harvard Busineness School.

Longnecker, C. O and Reiman M.L. ‘Making organizational change stick: leadership reality checks’. Web.

Whipp, R. And Pettigrew, A. M. (1991): ‘Managing Change for Competitive Success’ Oxford: Basil Blackwell.

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