Macro Environmental and Market Changes
The last two decades have evidenced dramatic changes in the global environment, driven by macro-environmental factors including globalization of businesses, technological advances, oil market fluctuations, corporate scandals and increased risk associated with terrorist activities and wars. In addition, an increasingly competitive environment has given new meaning to the phrase “survival of the fittest.”
Variously described as Process Improvements, Business Process Reengineering, Restructuring, Total Quality Management and Right Sizing, transformation efforts recognize and respond to the uncertain and challenging external environment where the common constant, change, impacts every facet of organizational life. Consequently, ‘business as usual’ is a thing of the past, and maintenance of the status quo is likely to drive an organization into bankruptcy.
However, many change efforts have resulted in failure. Evidence suggests that the probability of failure is higher when organizations react to fads in the marketplace rather than cultivate a culture that monitors and responds to change in a proactive fashion, which fosters stakeholder involvement and alignment with the organization’s vision and strategy.
Kotteri noted that many of these unsuccessful change efforts occur due to many shortcomings. These include: failure to generate a sense of urgency; failure to establish a powerful guiding coalition; no clear vision or strategy to direct the change effort; ineffective communication of the change vision to all stakeholders; failure to identify and eliminate obstacles to change; failure to create and recognize short-term achievements; celebrating success prematurely, causing stakeholders to lose focus; failure to firmly incorporate the changes into the corporate culture.
The costs of such shortcomings manifest themselves in failed implementation of new strategies or initiatives. Therefore, to reduce the risk of failure and of being overwhelmed by the impact of change, the change effort must be guided by committed and resilient role models, who must plan strategically if they are to successfully lead the organization.
Change Management and Leadership
Organizational change is ineffective without strong leadership. Managing change requires a strong and unwavering commitment from the CEO or change leader, and the team that drives and supports the change effort, to create buy-in and gain the commitment of all stakeholders. It has been argued that change cannot be managed, but rather one should be preparing for, leading, and responding to change. It is a fact that change is constant and unavoidable, and organizational survival is dependent on developing the ability to adapt to and embrace change proactively.
Therefore, successful change management begins with an effective leader who can respond to and lead the transformation challenge by creating new systems to drive the renewal process.
While the role of effective leadership in the change process is clearly recognized, the measures to be pursued to achieve it are often unclear. Indeed, organizations today face several leadership challenges, which must be resolved to achieve successful change management.
- A shortage in the leadership pool as a result of lower birth rate and an aging labour force, combined with increasing work force diversity. As many countries begin to rely heavily on immigration to fill this gap, the complexities arising from incorporating international recruits into organizations require increased attention to crossing the cultural divide and to facilitating appropriate measures for integration. In addition, human resources leaders and CEOs must seek to recruit and retain the best leaders. Strategic recruiting, retention and training and development policies or programs must be established to ensure a sustained supply of leaders.
- Growing tomorrow’s managers today. Leadership development practices must stay ahead of the change curve as organizations seek to create a culture of learning through:
- Developing and nurturing new business leaders by instilling the right experiences and skills in today’s managers
- Coaching at the executive level to facilitate the development of stronger corporate managers.
- Changing the organization's culture from a “knowledge hoarding culture”ii to a knowledge sharing culture and transforming the organization into a learning organization. Sustained growth and value creation is dependent on the organization’s ability to manage knowledge. Of critical importance in this process is the challenge posed for middle management to develop the political savvy and mental acumen to guide top leadership and lead from the front.
- Recognizing the difference between managing and leading. Management is about coping with complexity through planning and budgeting while leadership is transformational and focused on coping with change; establishing direction and vision and introducing change.
- Cultivating effective teams and recognizing when to switch leadership style to maintain project team momentum. This point is underscored by the results of a recent study of 153 projects over 28 countries which showed the importance of transformation leadership as a key success factor in change projects.iii
- Motivating and empowering followers. The leader must strive to motivate and empower followers to accept change, to buy-in into shared vision and undertake challenging goals.
- Developing the discipline to execute. Effective leaders must be able to execute their plans and policies. Organizations often formulate impressive strategic plans but lack change management skills to effectively operationalize strategies to achieve stated goals. Leaders must be able to lead the charge to close the gap between strategy and execution, based on clearly articulated organizational strategic goals, performance measures and targets. Without the ability to execute, all other attributes of leadership become irrelevantiv. This is supported by recent arguments on results-based leadership - where effective leadership = attributes x results, which emphasizes the need for leaders to demonstrate much more than attributes like character and competence, they must achieve results. By helping leaders at all levels get results, results-based leadership frees productivity from constraints of hierarchy and the limitations of position.
- Being prepared and ready for change. The level of preparedness to respond to change drives the strategic path taken by the organization and determines whether it can be an opportunity or threat. A company that is a household name today may be gone tomorrow. Leaders must create an environment that proactively monitors and responds to environmental changes, assesses and analyzes development through multiple lens by considering external factors (macro and competitive environment), and internal factors (vision, culture, goals, structures and capabilities), to facilitate the development of transformational strategies.
- Recognizing change as a continuous process to be implemented over a long period of time, which will facilitate the changing of culture, habits, systems and skill set of people. Leaders must plan strategically in order to guide the organization to a successful future, and to avoid the risk of being overcome by the impact of change. Planning for and embracing change must be an on-going process.
Leaders play a critical role as change agents in the transformation process. Successful change efforts necessitate the leader to articulate a compelling vision that appeals to both internal and external stakeholders; communicate a sense of urgency, lead by example, show strong personal commitment, and enable stakeholders to contribute to their full potential. Successful change management, therefore, requires the organization to overcome several leadership challenges, and to develop a focused and proactive strategy to address change.
Cheryl Francis-Nurse, MBA, PMP is a consultant with SPM Group (www.spmgroup.ca) and has over fifteen years experience working in the fields of project management, administration, trade and investment and education. She has held positions as Case/Project Manager, Trade Representative/Commercial Officer, Public Relations/Promotion Officer and Lecturer in the fields of Marketing, Customer Relations, Strategic Management and International Business Strategy. She has led a number of successful projects including the management of twelve (12) business skills and process improvement projects under the USAID’s New Economy Project, a $8 million (US) economic development project involving public/private sector partnerships.
Cheryl gained recognition for her exemplary contribution to the management of these projects in 2002 when she was awarded the USAID’s First Merit Award for Exceptional Efficiency in the Management of the Business Skills Program. Her wide-ranging capabilities allowed her to manage a diverse portfolio of projects aimed at improving the business skills, competitiveness and organizational efficiency of over 1500 companies. Her guidance in the formulation and execution of business development strategies and business process improvements of key government institutions also contributed significantly to the success of these projects.
With a Post-MBA Diploma in Advanced Management from York University and an MBA with Distinction from Manchester Business School, Cheryl obtained her Project Management Professional (PMP) Designation from the Project Management Institute in 2003. Cheryl-Francis Nurse can be reached at
References: With a Post-MBA Diploma in Advanced Management from York University and an MBA with Distinction from Manchester Business School, Cheryl obtained her Project Management Professional (PMP) Designation from the Project Management Institute in 2003. Cheryl-Francis Nurse can be reached at
i Kotter, John P.: Leading Change – Why Transformation Efforts Fail, Harvard Business Review Jan. 2007
ii Harrington, J. H. (2004). The five pillars of organizational excellence. Quality Congress.
ASQ’s…Annual Quality Congress Proceedings, 58. 191-101.
iii Prabhakar, Guru (2005) - Switch Leadership in Projects: An Empirical Study Reflecting The Importance of Transformational Leadership on Project Success in Twenty-Eight Nations
iv Bossidy, L., Charan, R., Burck, C. (2003) The gap nobody knows in Business Leadership: A
Jossey Bass Reader, (pp. 474-495). San Francisco: John Wiley & Sons.