College Quarterly
Winter 1996 - Volume 4 Number 2
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Leadership: Transforming a Downsizing Organization Into a Learning Organization Part 3.

by Erin Jones

Case Study Three: Techniques

This last case study looks at a variety of techniques used by an experienced public sector manager of change, Jan Donio, whose experience over the last decade of public service includes the federal Ministry of Indian Affairs, the Ontario Student Assistance Program (student loans) and the Ontario Ministry of Education. In each of these positions, Donio was involved in facilitating and managing organizational change.

Donio points to a key lesson of that experience. "Create a picture of the future where people can see themselves. Once you have the picture, you can assess where the difficulties may arise (and) which people may view change negatively, based on their experiences. You need to identify them and commit to help them through the process. If you give them time to walk through the approach they can identify their own issues and separate it from the overall issues." She also says that it is important to set clear and measurable objectives with those undergoing change, and to require individuals to take ownership of those objectives. Donio describes it as "an engagement process. Care and coach the people so they can make it happen. Communicate in a forthright and clear way throughout the process."

At the federal Ministry of Indian Affairs, Donio had worked toward shifting responsibilities and control to native groups. "Not too many people on the reserves had more than a sixth-grade education, yet they wanted to take control over their affairs. It was important to paint the picture of where they needed to get to." says Donio. A shift to more self-government also meant that some staff within the Ministry lost their jobs, a number of Indian Affairs offices were closed, and efforts were needed to reassign and outplace redundant staff. Donio's work included helping in that transition. She comments that:

With all the changes, it was important to help them (redundant staff) see whether or not they would be a part of the new picture by giving them as much information as possible. You must try and honour their decisions. Trust is something people lend to you as a manager, and you must honour people's personal choices; as they see you supporting others, they will come around. As a leader you must promote the vision. Never get personally tied to acrimonious behaviour, and expect it may happen. Demonstrate credibility, and the more you stand up for what is right and fair, the more you will be trusted.

While the literature shows mixed participant reviews regarding use of an external consultant, Donio feels having external consultants is important because they can "call a spade a spade" and work with people in an objective context. "You must honour the traditional relationship you have had with people and its limitations" says Donio.

When Donio took over direction of the Ontario Student Assistance Program, she had to cope simultaneously with a downsizing situation and a history of poor management, in which 150 employees were told that their offices were relocating from Toronto to Thunder Bay in northwest Ontario. There would be a complete reduction in staff even while at the same time, the soon-to-be terminated staffers would be required to remedy a seven-month backlog in their work. To resolve this situation, Donio began by explaining the purpose and reasoning underlying the planned move and the new structure which was to emerge. She let staff know that they would have choices to make, but that she was committed to securing employment and adequate training for each of them. "I signed agreements with each and every one of them, as long as they took training to secure employment. I told them I needed them to deal with the 80,000 students and to train the people to take over their jobs in Thunder Bay."

That demonstration of commitment resulted in a turnaround of staff behaviours. In two years, Donio successfully moved the OSAP office, reduced its staff establishment, and decreased average application processing time from 16 to 4 weeks. She hired two human resources counsellors on secondment from other agencies for placement of redundant staff in other departments. "It was challenging, but in the end we relocated and improved service time. I was there two and a half years, and it was down to 75 staff providing service. We acknowledged when people were placed, and celebrated every two months. It became a real group effort."

In an early 1990s merging of Ontario government departments the Ministry of Education went from 3,000 to 2,000 employees over a seven-month period, with predictable and widespread impacts among its management, professional and clerical staff, and across both union and non-union employees. In 1993 Donio, who was then Assistant Deputy Minister of Education for Organizational Development, worked with Deputy Minister Charles Pascal to implement a major structural and cultural change within the Ministry. "He wanted to turn it into a life long learning Ministry. He had clear vision which he could articulate. I created an implementation strategy around his vision. Fifty percent of the Ministry did not buy into it and at the same time cuts had to be made." His (Pascal's) high visibility made it possible to identify areas of resistance. For two months the Deputy Minister talked to people and had breakfast focus groups. The idea was to have staff spend time with him. He asked questions and shared visions of a learning organization. He learned the staff's feelings on it and how these fit into his visions. A very innovative strategy that they used was to develop a draft of the organization design which was deliberately flawed to elicit response!"

Donio notes the success of this strategy, as taff participation created a sense of confidence that they would be heard. An added benefit occurred when staff pointed out issues and problems that had not been evident to management. Donio admits that "I do not recommend this strategy for all organizations. We got more than we anticipated. We tried to engage the organization in conversation, and it provided tons of information. This helped us put together a process which was very clear in terms of redeployment. We shared how all people would be treated."

This process was clearly communicated to staff, and its programs and structures were posted so staff could better internalize it. reducing anxiety and providing authoritative information helped buffer the shock of change. As the organization was redefined and staff were declared surplus, they were invited to meet with their managers. Donio described the process as consultative and open-minded, in which surplus staff were advised in explanatory letters and invited to discuss the termination decision both in writing and in meetings with management. Of the 940 cases only 32 staff appealed through this process, and of those, Donio says "We changed our minds on five of those people. People felt they did not have to grieve it or go to the union. It showed we were willing to reconsider."

Donio points out the importance of broad-based communication. "We identified areas of risk, resistance, lack of understanding, and client service issues. We put together an advisory group as a way to deal with the issue of service. We created committees with the union to deal with critical issues like training. We had the union develop strategies with us to do things in volume to save money. The union then felt they had some power and it focused them on positive issues around change. We gave benchmarks to the union and encouraged them to improve on it. They got twice as much training for their people as a result! Over 900 people and there was not one union grievance." Line managers were given assistance in giving layoff notices, and all employees had Donios cell-phone number "so they felt they could get to the truth somehow. And there was a lot of open communication - questions could be submitted and answered quickly and appropriately."

Donio says it was critical to set performance standards and let people know what was expected of them: creating high expectations created a sense of obligation among staff. "This was key - despite the downsizing, we expected a certain standard. It gave them something to focus on. Throughout the process, people realized that we could experience downsizing in a caring way - mutual respect - if you care about us, it is in our best interest to care about you. Our process allowed employees to be heard and that gave us credibility in the organization."

In looking back, Donio focuses on two main issues that she would have done differently. "First, the new senior management team did not have a sense of commitment to each other. The time line was too tight. My advice now is to let the team gel and understand where they stand together and where their differences are. Otherwise dysfunctional behaviors can happen. Second, I would create a pause in the organizational design. I would have created a time when we could have much more reflection in what we were about to do. The time went so fast. It is important for people to reflect and internalize the information. There was never really a time to openly reflect on it (the process in progress) and what all the pieces would mean."

Donio adds "Don't assume that you have the capacity within your organization to transform it. Those who build an organization may be too close to it and need external support to see it clearly. You need objective assessment. Change your organization based on fact. Get the data and the facts. There is a fine line between opinion and prejudice. When prejudice comes in, you very seldom make the right decision. Also identify and train those that have power in the organization, whether they are managers, supervisors, or union people. Find the people who have the power to influence the organization and create a sense of common purpose."

Summary Of Key Leadership Strategies

Strong themes and characteristics appear in each of the three case studies. They can be categorized as clearly defining the company's long-term vision and values, communicating the new vision and changes, creating open communication channels, identifying necessary training and education, utilizing principle based decision making, modelling the new beliefs and behaviours, and setting performance targets.

• Clearly Defining the Company's Long-Term Vision and Values

The leaders involved in these cases did not look at downsizing as a cleanup situation. Instead, they looked at the downsizing event as a small part of a larger and more positive vision. The organization's purpose and services were revisited and defined. Key areas of focus were identified.

• Communicating The New Vision And Changes

Using a variety of communication methods to reach all levels of employees was vital in every case study. Sharing the realities, a clearly defined vision and strategy allows employees to understand the situation. Encouraging two-way communication allows for the creation and fine-tuning of strategies. Providing this information to employees empowers them to make important decisions about how they will fit into the new vision.

• Creating Open Communication Channels

Encouraging an open dialogue in an environment of trust can create a synergistic effect. Innovations result from teams of employees coming together to problem-solve. A key stakeholder addressed in the Fleming College case study were the students as customers. Making customers and staff partners in the process creates opportunities for collaboration and innovation. Visibility and accessibility were other key aspects of communication. Leaders who were available and approachable achieved positive results.

• Identifying Necessary Training And Education

A key area of training involves helping the existing culture to develop effective participative skills. This is especially important in an organization where many employees have never before been exposed to a co-operative or consensus-building approach. A strong communications focus begins with facilitating the process of facilitation.

• Utilizing Principle-Based Decision Making

To demonstrate ethical congruence and reinforce the values the organization stands for, leaders should identify startegic principles, values and visions first and then make decisions based on those. This ensured consistency throughout the change process in each case study.

• Modelling the New Beliefs And Behaviours

Leaders reinforced organizational direction by being directly and visibly involved in the process. They served as examples and assisted others to make the transition by modelling positive behaviours and showing integrity and honesty.

• Setting Performance Targets

Pacing and tracking the performance of downsizing and transition toward a learning organization is another vital element in the process. Setting measurable goals and having employees be involved in the development of and accountable for performance standards helps create a sense of communal effort toward a common objective. In addition, detailed goal-setting paces the course of the transition and helps in monitoring its progress. Regular reporting of these results lets individuals and the organization as a whole know exactly what is going on, and provides a sense of accomplishment when milestones are completed.

Discussion and Recommendations

The issue of readiness is a concern raised to varying degrees in each case study. According to William Bridges, change and transition are two separate things, and no matter how valid a change or its intended outcome may be, it will not succeed unless transition takes place. Change is external and situational while transition is internal and involves the psychological process that people go through to adapt to the change (Bridges, 1991). Transition evolves through three phases. It begins with the ending of something. The next step is going through the "neutral zone," a period in which the old reality has ended and the new reality has not yet been clearly identified. For many, this is a time of great confusion and anxiety and is the period when the highest amount of turnover occurs in an organization. Despite these problems, this neutarl zone is also the best time for "creativity, renewal and development" (Bridges, 1991). The third phase of transition management involves the "new beginning."

Firms such as the Bank of Montreal, British Petroleum, and National Semiconductor are beginning to explore how to transform their organizations through formalizing re-creative learning. Shifting focus toward a commitment to learning is an important step in becoming a learning organization. Although many find this advice appealing, managers struggle with how to raise the learning profile within their organizations. Training in skills such as negotiating, teamwork and executive coaching are important to the work of selling the vision, and to the ongoing operation of the company once the strategy is in place. An organization's training or professional development department should become involved early in the process to help determine the full range of new and enhanced skills that would be required to implement the plan. Corporate educators working together with management and staff can develop training activities to address the new requirements arising from emerging business needs (White, 1994).

In order for a downsizing environment to transform itself into an effective learning environment, the organization must acknowledge employees' relevant losses (which include career goals, among other things), and must help them to understand their new workplace and how to function in it (Bridges, 1988). Employees witness their peers being downsized and new expectations are placed on them. The impact of taking on more responsibilities and seeing fewer employees do the same or more work is compounded by "survivor's syndrome," in which feelings of guilt amplify strong feelings of change-induced anxiety. Thus, the emotional needs of the remaining staff must be considered.

These case studies show tht a well-designed plan can create a positive environment by identifying what phase employees are in and planning relevant activities to ensure readiness for learning. For example, building in an opportunity for employees to understand the nature of their losses, learn the key stages of transition, and develop leadership in handling such situations would be beneficial for employees in the first phase of transition.

Since people tend to resist losses and endings rather than the actual change itself, it is vital to thoroughly identify who is losing what. The use of rituals are important activities to recognize a loss or ending and to pay respect to it (Bridges, 1994). Organizing an event to mark an ending would provide closure for many employees. In the process of implementing organizational change, people can "drop off" because their change-induced sense of loss and grieving are unacknowledged. Communicated in their own context, the messages of transition will allow all employees to identify the benefits of change personally relevant to them.

The impact of communication and timely feedback should not be underestimated. Initiatives including transition newsletters, family days, surveys, suggestion programs and informal lunch meetings are ways that companies can successfully deal with the "neutral zone" period of confusion. It is imperative that the stages of transition are recognized and dealt with accordingly. The neutral zone period is an appropriate time to provide training in creative problem-solving and innovation. These programs should provide techniques to enhance creativity, build feelings of accomplishment and contribution, and reduce the number of self-perceived barriers to adaptation.

Senge (1994) maintains that learning is associated with change, adaptability and responsiveness. In many companies, traditional training and development programs are undergoing a significant transformation. Not only is the nature and content of employee training and development changing, but the ways in which organizations are viewing and using educational activities look different. Corporate education can have an important role not only in generating organizational change but also in its implementation.

There are three ways in which corporate education can be used: reactive, responsive training, and re-creative training (White, 1994). Reactive training usually takes place in formal settings, often in traditional classrooms outside of the workplace. What is to be learned is determined by the organization's managers before the training takes place, and the focus is on transferring knowledge and required skills. Learners leave these sessions with knowledge or skills that can he applied on the job soon after the training is complete.

There are several other ways reactive training can be accomplished. Much learning takes place beyond traditional employee education and development programs. For most people, learning does not begin or end in the classroom. Employees are continually increasing their knowledge and changing their behavior as they go about their daily activities. Because this type of learning occurs naturally, it makes sense to identify ways to harness and enhance this natural learning to help employees learn better and improve their performance.

Many organizations have moved beyond purely reactive training and have created a more responsive role for corporate education. In those cases, the training department is much more in touch with business issues and works with management to design and deliver needed programs as an educational consultant. The purpose of responsive educational programs is to prepare employees for new tasks, responsibilities, or ways of relating within a changed business framework.

A few companies are using educational activities to re-create, rather than just implement change. These companies see the possibilities in using education, but it is unlikely that significant change can be sustained unless learning occurs within the organization. For re-creative education to work effectively, a partnership develops as management and staff are assembled into a learning coalition in which all members, including the trainers and facilitators, are seen as equal stakeholders. The educator's job is to work with the group to hone its learning skills, and re-creative learning works best when the group's educational activity is immediately applied to existing systems in the organization, reducing the chance that the knowledge will be lost making in the transition. This means that the learning program is not separated from the work of the organization.

The purpose of re-creative learning activity is to generate new approaches, not to implement established, well understood routines, and there are no textbook solutions or pre-packaged programs. Participants use their own experiences and become their own case studies, and learning is more likely to have impact if it is applied quickly in transormative efforts through the organization's established systems.

Re-creative learning tends to occur in more informal ways and occurs as a by-product of the employees' regular work activity. Leadership is required to align informal re-creational learning with the needs of the organization, and thus to capture learning benefits. This can be done by formalizing, to some extent, what has been an almost exclusively informal and incidental process. Informally-developed critical knowledge that otherwise might have escaped notice is then purposefully managed to improve the organization.

Alignment means converging the strategy, structure, systems, and culture of an organization. To bring out the full potential of an organization, its people must be re-aligned, not restructured. They must understand their contribution to the organization, and how they link with others, before they are willing to relinquish their own informal systems or ways of working. The challenge is how to align the organization to perform best in such a way that it remains flexible and adaptable to fast rates of change. Moreover, this has to be seen as an active management process, including communicating the value of the target, allowing for individual and team contributions, sustaining enthusiasm and using suitable strategies to guide resource allocation.

A successful organizational transformation occurs only when individuals and work teams internalize what they need to do to be productive. Leadership must ensure that all understand their role in contributing to a clearly communicated business strategy. Most importantly, this leadership approach must be flexible and adaptable to meet the organization's evolving needs in the face of a changing business environment.

Click here for Part 1 of this tripartute article.

Click here for Part 2 of this tripartute article.

References

Appelbaum, S., Simpson, R., and Shapiro, B. (1987). The tough test of Downsizing. Organizational Dynamics.16 (2), 68-79.

Bridges, W. (1988). Surviving Corporate Transition. New York: Doubleday.

Bridges, W. (1991). Managing Transitions. Massachusetts: Addison-Wesley Publishing Company.

Bridges, W. (1994). JobShift. Massachusetts: Addison-Wesley Publishing Company.

Cooper, P. (1995). Forget about organizational restructuring: think alignment. CMA Management Accounting Magazine, 69 (3).

Effron, R.C. and Concannon, J.P. (1995). Rightsizing the right way. School Administrator, 52 (3), 40-41,43,45,47.

Kelly, C.M. (1995). The rhetoric of downsizing at the university of Maine: a case study. Paper presented at the Annual Meeting of the Speech Communication Association, San Antonio, Texas.

Senge, P.M. (1994). The fifth discipline fieldbook : strategies for building a learning organization. New York: Currency/Doubleday.

Smith, H.L. (1986). The incredible shrinking college: downsizing as positive Planning. Educational Record, 67 (2-3), 38-41.

Smudde, P.M. (1993). Downsizing technical communication staff: the risk to corporate success. Technical Communication, 40 (1), 35-41.

White, R. (1994). Educating for change: 3M Canada, National Semiconductor and Bank of Montreal are using corporate education to transform their organizations. Business Quarterly, 59 (2), 53-61.

(1996, May). "Restructuring doesn't always improve profits, forum told." Financial Post Daily, 9(56).


Erin Jones, B.Sc.

Erin Jones is a Training and Development Consultant with the Independent Order of Foresters in Don Mills, Ontario.

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