How People Management Influences organizational change – by Mary T. O’Sullivan

by Mary T. O’Sullivan, MSOL

“The sinkhole of change is communication and motivation.  It’s where change projects go to die.” Nancy Rothbard

We always wonder how companies make strategic decisions. Why do our favorite brands become discontinued? What made a business reorganize its interior? What are the major factors in making strategic change? Most decisions of a strategic nature are dictated by the company’s board of directors, but usually not in isolation. Famously, consultants are asked to help companies merge, divest, or close or even to redesign a logo. None of these changes make sense without the complete acceptance by the people who work in the company. But what is the impact of an employee performance management system in these direction changing judgments, often over a five year period of time?

First, consider what factors the Board of Directors need to think about in developing a strategic plan. A strategic plan for the near term, must reflect the various corporate cultures within the company, say, Whole Foods. As with any corporation which grew through mergers and acquisitions, various diverse alliances are hard to conquer. Aside from the obvious merging of HR systems, supply chain, benefits, vacation time, etc., to achieve alignment across the organization, the Board must first involve the various VPs from all business units in developing the strategic plan.

To achieve a successful strategic plan, the team needs to analyze the factors contributing to strategic development.

1. External environment must first be considered.
   • Economic – Whole Foods is known as a higher end market, so it will do best in high end neighborhoods
   • Political/legal – May face local resistance to new stores, in favor of a local market
   • Technological – Must be adaptable to newest technology
   • Competitive – Need to consider consumer preferences for more local products as found in Farmer’s Markets
   • Customer – Demographic studies need to be updated to reflect latest consumer trends
   • Suppliers – With more emphasis on local farmers, the company will need to factor in capacity of individual farms.      
2. Internal factors are also significant:
   • Organizational structure – Each acquired business needs to reflect the overall corporate structure and follow the same rules.
   • Organizational culture – Cultures need to be normalized and merged carefully. Culture is perhaps the most import internal factor, as Peter Drucker once said, “Culture eats strategy for breakfast”.
   • Internal politics – Fiefdoms need to be dealt with. All departments need open and honest communication and cooperation.
   • Processes – Must be normalized and standardized. No rogue policies and procedures.
   • Size – Need to reconcile building a huge store with mission of maintaining local flavor.         

What does the organization need to do to create a strategic plan for the next 5 years?

Once the mission and vision have been tested, verified, and embraced by all the stakeholders, including employees and managers, they should form the basis of the strategic plan. An analysis of all internal and external factors should be conducted and then a gap analysis performed, coupling strengths, weaknesses, opportunities, and threats to determine where the company has leverage (fresh and local food), problems (union issues, etc.) or where there are constraints (local ordinances, competition from other grocery chains or other vulnerabilities (capacity of local suppliers).

Unless the strategic plan ties to all these factors, and is reflected in the company’s overall mission, vision, values, and goals, it could lead to failure throughout the organization. Finally, the strategic plan needs to be reflected in the company’s goals and the goals of its employees.

First, the strategic plan must relate to individual employees’ performance.

The strategic plan supports the company’s performance management system by providing motivation to employees to behave and produce desired results. In addition, the tasks and Knowledge, Skills, and Abilities (KSAs) included in the individual job descriptions should align with the company’s strategic plan. The job duties should reflect activities that support the achievement of the company’s mission, vision, values, and goals.

Management support of the company Performance Management (PM) system helps gain universal by-in when people are convinced that there is something in it for them personally, (answering the “What’s in it for me?” question) at every level. The PM system is the principal way to execute a strategic plan, through accountability down to each worker. Each employee needs to be aware of how the PM system will affect them directly and must share a commitment to make it work at all levels.

“Organizations are communities of human beings, not collections of human resources.” Henry Mintzberg

Connect with Mary:

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Read all Mary’s columns here: https://rinewstoday.com/mary-t-osullivan-msol-pcc-shrm-scp/

Mary T. O’Sullivan, Master of Science, Organizational Leadership, International Coaching Federation Professional Certified Coach, Society of Human Resource Management, “Senior Certified Professional. Graduate Certificate in Executive and Professional Career Coaching, University of Texas at Dallas. Member, Beta Gamma Sigma, the International Honor Society. Advanced Studies in Education from Montclair University, SUNY Oswego and Syracuse University. Mary is also a certified Six Sigma Specialist, Contract Specialist, IPT Leader and holds a Certificate in Essentials of Human Resource Management from SHRM.

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