Over time, companies of all sizes encounter some form of organizational change. Whether buying a competitor, being acquired, or announcing an employee layoff— effective communication and the fair treatment of employees are often deciding factors in the success or failure of any change initiative. As in life, it is these critical points in a business’s life-cycle when the stakes are at their highest and the odds are stacked against you.
How can human resources play a role in managing change?
Whether a business owner wearing the “HR hat” or a vice president of human resources, you have primary responsibility for the intense and challenging task of dealing with employee angst and turmoil during such periods of change. If you expect employees to embrace change, they must understand management’s vision and, more importantly, how change will benefit the organization. Absent that, you will end up with unmotivated employees that resist change rather than embrace it.
Understand that success isn’t the norm in these situations. A Watson Wyatt survey of 1,000 companies found that less than 33% attained their profit goals after a merger. An earlier study by KPMG found that 83% of corporate mergers and acquisitions failed to enhance shareholder value. Both reports cite poor communication as one of the most common pitfalls.
Consider the recent creation of the Department of Homeland Security, possibly the largest and most difficult merger of all time. Nearly two dozen government agencies, including the FBI, U.S. Customs, the Coast Guard, the Secret Service, and others were merged to create this behemoth organization that has been plagued by poor performance and inefficiency. Leadership clearly failed to communicate a vision that was powerful enough to unite the various cultures within these independent agencies.
In contrast, consider Hewlett Packard’s acquisition of Compaq. From the start, the vision was clearly defined as a new entity that represented the best of both organizations. Sure, Hewlett Packard’s name is on the headquarters building, but today’s Hewlett Packard is a much different company than it was prior to the acquisition of Compaq. Their respective business approaches, the way they work with people, and how they solve problems rubbed off on one another, thereby changing each other and creating an altogether new enterprise.
Creating a Clear Vision and HR Best Practices in Companies
A clear vision that is clearly communicated to employees is vital and is of utmost importance in the beginning, when misperceptions and misinformation are rampant. And effective communication extends well beyond the announcement of forthcoming changes. Top management must be prepared to address questions and concerns that employees will naturally have, and there should be a communication plan that constantly reinforces the vision and the benefits of the change. In order to be prepared, all levels of management must be engaged well before the announcement.
HR Best Practices in Companies and Informing Employees about Change
Once the vision and communication plan are in place, it is time to inform employees about the change to come. Leaders should feel free to say, “There are still a number of things that are confidential and others that need to be resolved, but here is what we know and can share.” Managers should outline the initial plan and provide a timeline for when employees can expect to learn more. This will minimize employee anxiety and speculation and maintain employees’ focus on the business.
Of tremendous importance is keeping the best employees at work. Talented staff plays a key role in successful restructuring; however, they are often the first to leave when a company’s future prospects are unclear. At the same time, the fastest way to ruin employee morale is to give special treatment where it is not due. Creating an environment of fairness is of paramount importance; management should not play favorites or treat select employees better than others. A rule of thumb is to allocate rewards and punishments to those who deserve them, making sure that actions pass the test. This does not mean that all employees must be treated equally, only that decisions were nonbiased and consistent across all employees.
Getting this right requires a commitment of time, energy, and resources. Unfortunately, this often comes at a time when internal resources are stretched beyond the limits. If change initiatives were easy, the majority of them would not fail to achieve their intended purpose. But there are resources outside the organization that can support internal efforts. And the change effort can wind successfully.
If you find yourself now in the midst of change, think about your own experiences and consider whether the situation seems fair to you. Make sure you are communicating openly with employees and treating your staff members the way that you would want to be treated. This simple principle will greatly increase your odds for success.
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