Harley-Davidson, an iconic brand that has ruled
the world of motorcycles, was close to declaring
bankruptcy in the1980s. However, a dynamic and transformational
leader, Richard Teerlink, with strong belief in
people and their potential, brought the organization
back to life.
The lesson from that story is that in any business,
whether a small retail outlet or a multinational, people
are the key factors. People are the players who not only
make up the organization’s nervous system but also its
mindset. Their beliefs, self-interests, and attitudes towards
the organization are what ultimately define an
organization’s financial and operational health.
Organizations work much like a human body. The
key financial analytics, such as sales, margins, cash
flow, and inventory, reveal the physical aspect of a business,
but the mental health of the organization can
only be assessed through its people. As we all know, the
mental health of a person (and an organization) will
eventually impact physical health as well.
Transformation is inevitable if an organization’s
health is in jeopardy—and that is where an
organizational development (OD) process is important.
There is no replacement for the insight that a person
gains from experience. However, technology exists to
help analyze the facts and help make calculative and
informed decisions.
An effective organizational development process
takes people out of their comfort zones and seeks to
alter their mindset. Kurt Lewin, the father of change
management, proposed in the 1940s a three-stage
transformation theory that is still relevant and easy to
implement in any business setting.
Here are the stages:
Unfreeze – Open the organization up: look deep into
the operational findings and the financials. A good
technical platform such as SAP, NetSuite, CStorePro, or
ModiSoft may be helpful tools in getting accurate key
analytics. Conversations with customers, employees,
and other stakeholders can also provide good insight
on operations.
Change – This is the most painful phase, when
owners, management, and employees work together, to
get to the same page. All aspects of the organization are
opened up for discussions: ideas, including airing
grievances, reforming strategies, and making people
aware of what needs to be accomplished. Additionally,
the message is sent that those who are not willing to
participate or implement are free to leave. Hierarchal
barriers must be minimized for an effective and open
dialogue process. An exchange of thoughts between
people with years of experience and newcomers is
facilitated to reach results that are in the company’s
best interest.
Refreeze – Once there is agreement, then new
policies, leadership changes, and new goals and operational
structures are put in place. A key element is a
reenergized organization that is, above all, well aligned
and manned by people with a positive attitude.
Transformation is now complete but must be followed
up on and evaluated on a periodic basis. Modifications
must be allowed and details should be altered
if needed.
Transformation is bold in that it demands both
courage and patience from a company’s leaders:
courage to step up and identify the flaws in the system,
patience to see the process through. It is risky as it may
involve losing some people and adopting new ideas
and thoughts, some of which may not be successful
or take a while to produce results. The crux of a
transformation process is simple: you cannot expect
different output from the same input. The process of
transformation becomes worthy when the business
insights and new and improved ideas meet at a point
that is in the best interest of the organization.
Consequently, transformation may be bold and risky,
but still worth pursuing.
Murad Huda is an organizational development consultant.
murad.huda@gmail.com. Business Insights is hosted by the Law Firm
of KPPB Law (www.kppblaw.com). Disclaimer: This article is for
general information purposes only, and does not constitute legal, tax, or
other professional advice.