NHRD Journal - National HRD Network

and gives the freedom to fail.
Change in Ongoing Businesses
It is important to ensure that once the direction
is chosen the new business is structured to
provide focus and accountability. ITC chose
to go into hotels as a business several years
ago. They provided focus to the fledging
business and accountability by creating a
distinct organization and leadership with
focus and accountability. The business has
now grown into a very profitable division.
Focus, leadership and accountability can help
even existing business that require
rejuvenation and/or meet tough competition.
When Nirma was actively eroding Hindustan
Lever's market share in the early eighties it
chose to fight the battle in the field on the sales
front. The company put three of its best young
managers on the sales side. They turned the
tide and two of them went on to become
chairman of the company later. Both ITC and
HLL examples suggest the importance of
leadership when changing direction in existing
business or perking it up.
Choosing a Wrong Direction
An Indian company that had been doing very
well in manufacturing technology based
commodities of good quality decided to change
its strategy and change to branding the same
and recruit FMCG managers to bring in the
change. While it is true that Intel and Gujarat
Ambuja cement have been successful in
branding their commodity, there are more
examples of people who have failed. In the case
of this company the market did not accept this
change. Its problem got compounded by the
fact that the newly inducted expensive
managers could not adjust to the underlying
technology of the products and from a profitable
business it slid to a loss. It has now changed
direction and is on its way back to health.
Multinational companies operating in India
at times benefit from changes of direction
initiated abroad after a lot of research and
debate. But they are also at the wrong end of
receiving the stick in India when the change of
direction initiated abroad does not jive with
realities in India. For instance, Unilever's
decision to hive off the chemical business and
focus on ice creams may be consistent with the
parents view of its 'core business' but may not
be in sync with local realities.
When People Are Affected
One of the most difficult areas of implementing
directional change is when it affects existing
people with long service adversely. Recently, a
large engineering company invited consultants
to do a job evaluation of all managers. They
had several hundred managers whose jobs had
to be evaluated and this evaluation would affect
several thousand others. This company did not
have a good performance evaluation system
and managers were promoted on a time bound
basis to a higher level even if they continued in
the same job. The consultants warned the
management that a proper job evaluation will
result in many jobs going down as their exalted
status is only due to the fact that the incumbent
has got into a higher grade in spite of doing the
same job. The management in an aggressive
mode agreed as they felt they needed a system.
By the time the project was getting over the top
management received several messages from
people who feared their jobs might go down.
In the end the company backtracked and very
little of the consultants work was implemented.
I suspect in this case the company decided to
go ahead with the job evaluation project and
fantasized about its will to be tough.
Conclusion
To conclude, management of change requires
the choice of direction and then the
management of various processes to support
the directional change. Successful companies
debate the direction, provide focus through
organizational arrangements and leadership
and then manage the processes.
November 2007 NHRD Journal 77