SIGNATURE PAGE

I certify that I have read this document and, in my opinion, it is satisfactory in scope and quality as a project report in partial fulfillment for the graduate course of Leadership and Change Management held at the School of Management of Kathmandu University.

Mr. Sandip Timsina

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COPYRIGHT & DISCLAIMER

3 Copyright @ 2007, By the author

All rights reserved.

Reproduction or translation of any part of this work beyond that permitted by the acts of Nepal without the permission of the copyright owner is unlawful. Request for the permission or further information should be addressed to the author.

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DISCLAIMER

The object of this term paper is to observe and analyze the automation process as a change in theoretical context. The author is confident that the results of the project and methods presented in this report will be taken as a guide for a more comprehensive study at a future date. The author is not responsible or liable legally and morally against the results and consequent decisions based on the project report. The project shall only serve the academic purpose. The views expressed (except theories), if any, in this report are those of the author only.

The term Automation in this term paper refers to business process automation by the use of computer programs.

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ACKNOWLEDGEMENTI would like to express my gratitude to Kathmandu University School of Management for giving me the opportunity to work on a term paper that enhanced my learning and knowledge on change management and leadership.

I am very indebted to my instructor/facilitator Prof. Subas KC. for his letting me do a term paper in such a subject that I had been involved in. It helped me evaluate the individual processes from a different perspective.

I would also like to take this opportunity to thank staffs at Nepal Bank Limited and Employees Provident Fund in taking no pain in sitting with me in informal discussions, giving their insights.

Last but not the least I would like to express my sincere thanks to each and everyone who provided me their valuable information and suggestions.

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ContentsSIGNATURE PAGE........................................................................................................................................1

COPYRIGHT & DISCLAIMER..........................................................................................................................2

DISCLAIMER.................................................................................................................................................3

ACKNOWLEDGEMENT.................................................................................................................................4

Automation.................................................................................................................................................4

What is Automation.................................................................................................................................4

Why do we need Automation..................................................................................................................5

Literature review.........................................................................................................................................5

Strategic Management............................................................................................................................5

Business Process Reengineering..............................................................................................................6

Business Process Management...............................................................................................................6

Information Communication Technology as key business enabler..........................................................6

New forms of organization......................................................................................................................7

Change Management..............................................................................................................................7

Need for change..........................................................................................................................................8

Theoritical analysis of change....................................................................................................................10

Schein’s Model......................................................................................................................................14

Daft’s model..........................................................................................................................................14

Kotter’s eight phase model....................................................................................................................16

ADKAR Model........................................................................................................................................19

Why change fails?......................................................................................................................................21

Making change successful.........................................................................................................................23

Theoritical analysis................................................................................................................................23

Resistance to automation and managing resistance.............................................................................28

Dealing with resistance to change.....................................................................................................33

Evaluating Change.....................................................................................................................................35

Conclusion and Recommendations...........................................................................................................37

References.................................................................................................................................................39

Acronyms...................................................................................................................................................41

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Automation

What is AutomationTechnology lies at the heart of organization process. As an enabler, as a smoother and as an irreplaceable facilitator technology’s role is the most crucial in the survival of an organization. This makes technology the power to survive through the stiff competition, source of innovation and multiply productivity while reducing effort and the resources. Thus technology is the major subject that changes and to adapt to this change is more than imperative. Other way technology does not affect one part or function in an organization, but it is deep rooted in every part and function in the organization. It makes technology the major driver of change. On the other hand emerging new trend and requirement in the environment be that customer demand/ orientation or new requirement by regulating bodies, organizations have to embrace this change. Today every organization wants as little human intervention in its operation as possible to ensure standard, to exercise control, to avoid errors among other reasons. This gave momentum to the process of automation. “The increase in market demands has driven businesses to seek ways that can realize significant cost reductions and increase shareholder value by automating business process flows, eliminating non value-adding human interventions, and allowing enterprise applications to communicate and share information intelligently and seamlessly.”1

Automation is encompassing virtually every walk of life. From agriculture to space exploration it has placed its foot firm and strong.

Wikipedia defines Automation as

the use of control systems (such as numerical control, programmable logic control, and other industrial control systems), in concert with other applications of information technology (such as computer-aided technologies [CAD, CAM, CAx]), to control industrial machinery and processes, reducing the need for human intervention.

In the year 1956, in his book Automation: friend or foe? Robert Hugh Macmillan wrote, “In the industry the use of automatic devices enables us to make more goods more cheaply and, ultimately, with less capital outlay. In the military sphere their application makes possible the design of equipment that could not conceivably be operated otherwise. And as they are extensively used for both purposes throughout the world, it follows that, with the relative shortage of manpower in the West, our only hope of retaining our position in the world is to install automatic equipment as fast as we can.” Thus Automation is a process where machines replace the human labor in doing work.

No doubt technology brings efficiency and no organization can remain untouched by this whirl of change. While it eliminates old jobs (e.g manual data entry, book keeping etc) it also creates new job (e.g. computer data entry, data base management, network engineers and so on). People are being replaced by machines. “Power back ups and ups are system that I have been using for years now, but I

1 http://www.diyarme.com/eprocessing.htm

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have never thought ups could be linked to existing LAN and administered remotely’’ says Subash Khadka system manager , Employee provident fund . Turn to any manager who has served in any Nepalese organization for 8-10 years will have experience of having seen at least one major automation process. Though Nepal imported its first computer decades back, the automation process started only after mid 95. Only few lucky ones witnessed major automation in the early 90s. Ironically many times the organizations that automate themselves late are more modern, efficient and sophisticated in comparison to the other players in their industry who were proud early embracers of automation. However one cannot wait and watch as obsolescence hits technology but has to manage its adoption and adapt to the change it brings in segregates successful companies from the rest.

Why do we need Automation

We need automation for following major reasons

To replace large human requirements in work environment and situation that involves hard physical and monotonous work.

To replace human in the work environment that is risky and dangerous. To do works those are beyond the human capabilities like lifting loads.

However in this term paper I shall discuss computer based automation specially the automation of transaction processing and client servicing and there also automation has its own sets of advantages and they are

To reduce workforce in monotonous activities and to place them in other areas. To bring about standard in the way individual transaction and customer is handled. To minimize errors as machines (Computer programs) are lesser prone to errors in comparison

with their human parts. To bring efficiency and promptness in service delivery as in automated environment work flow is

highly smooth and customer get prompt service. To make organization highly responsive and flexible to changing environment and customer

preferences.

Literature review

Strategic ManagementDecision to automate business (whole or part) has strategic importance. Not only from the viewpoint of investment, but also from organizations’ goals and core-values; automation is a strategic move. In ‘Leading Strategic Change, breaking through the brain barrier’, J. Stewart Black and Hal B. Gregersen note that leaders face change of such enormous scope, size, and complexity that it is nearly overwhelming:

Transforming a business unit that succeeded for years by focusing on technological prowess to a unit that must now focus on customer service,

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Leading an organization from domestic competition to the global battlefield, Accelerating growth by focusing not just on building things but on all the services that go with

after-sales support, Changing the culture from one of considered deliberations to a fast, first-mover approach, Redesigning jobs to incorporate new technology that we hardly understand, or Something else just as daunting.

Business Process ReengineeringIn their international best seller “Reengineering the corporation”, Michael Hammer, James Champy define reengineering as “the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed”. Being radical in concept business process reengineering is a subject that leads to harsh resistance. In the context of Nepalese environment, this might be doing away with voucher system by having records in computers or at least minimizing their number or sometimes doing away with an entire department. Now is not the time to organize on Adam Smith’s 1776 Wealth of Nations where organizations set aside specialized group of workers at a particular task over general users.

Reengineering is the opportunity to develop the rules by which business in the future will be conducted rather than being forced to operate by the rules imposed by someone else. As such, reengineering underpins every attempt to seize and maintain a true competitive advantage.

Business Process ManagementBusiness process management includes methods, techniques, and tools to support the design, enactment, management, and analysis of operational business processes. It can be considered as an extension of classical Workflow Management systems and approaches. “BPM is a management approach focused on aligning all aspects of an organization with the wants and needs of clients. It is a holistic management approach that promotes business effectiveness and efficiency while striving for innovation, flexibility, and integration with technology. Business process management attempts to improve processes continuously. It could therefore be described as a “process optimization process.”2

Information Communication Technology as key business enablerOrganizations are investing ever-increasing amounts in information technology (IT). However, the existing literature provides little evidence of a relationship between IT investment and organizational strategic and economic performance. The exploratory research reported here appears to be the first to relate comprehensive sets of IT investment measures to organizational strategic and economic performance measures. Although the individual IT investment variables were found to be only weakly related to organizational strategic and economic performance, they were significantly related to performance when grouped and analyzed by means of canonical correlation. More specifically,

2 http://en.wikipedia.org/wiki/Business_process_management

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canonical results suggest that organizational strategic and economic performance measures such as sales by employee, return on sales, sales by total assets, return on investment, and market to book value are affected by IT investment measures such as IT budget as percentage of revenue, the percentage of IT budget spent on training of employees, number of PCs per employee, and IT value as a percentage of revenue. The organizational performance measure growth in revenue and IT investment measure percentage of IT budget spent on staff were not significantly related to other measures and therefore were not indicated to be useful for investigating possible effects of IT investment on organizational strategic and economic performance.

New forms of organizationWhile the western world is advocating for networked enterprises or virtual organizations our country in specific is aiming to be paper-less if not paper-nil. The new organizations addressed the issue of innovative networked and compared to traditional companies less integrated forms of organizations (Rockart & Short 1991, Davidow & Malone 1992, Picot et. al. 1996). These organizations (both in home country and abroad) know that ICT is the only tool to make it possible. Many IT tools like email, internet, blogging, video-conferencing and all have transformed the way organizations do business. How many years back anyone would have thought companies like Accenture.com would have been possible.

Focus points of research are the competitive effects resulting from temporary forms of cooperation, implications for the management of these structures, and information technology requirements necessary to integrate the participating organizational units (Sieber & Griese 1997, Hirschhorn & Gilmore 1992, Venkatraman & Henderson 1995, Bensaou & Venkatraman 1996).

Change ManagementAutomation is also change and hence its management is change management except that the domain is specific instead of generic. Literatures on change management focus on today’s need of organizations to continuously adapt to changing market environment, customer preferences and the field of competition. This has become more frequent because of the pivotal role technologies play in the organizations and the changes that occur in the field of technology large and fast. This adaptability also determines the flexibility of the organizations. However the “used-to” inertia, change of power, change in organizational structure, reengineering of the business processes etc. exposes change to huge resistance. Thus the management of change is very much important when it comes to automating business processes.

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Need for change

“The right of any corporation to exist is not perpetual but has to be continuously earned.”Robert Simons

In “Creative Destruction” Richard Foster and Sarah Kaplan puts it very rightly by saying organizations seeking to succeed, not just to survive, must learn to “act like the market” and adopt policies that will enable them to “change at the pace and scale of the market”. Despite being the citizens of a developing country in the last 10-15 years we have witnessed that the traditional organizations have changed. We no longer see huge chunks of files, mess of papers in tables of offices (at least in offices, in most of the private organization and few government organizations) and along with papers the paper weights, bulky almaris used as filing cabinets have disappeared. We can also assume that budgets for stationary items like pens and ink might have dropped significantly. Ask anyone and the reply would be computerization.

While automation might just be following the suite for few organizations it’s the matter of survival for others. Manual processes need to be automated because

Manual processes are too routine and monotonous. No expert logic is required to carry out these activities. The process is lengthy and occupies manpower unnecessarily. Manual processes are prone to error. Manual processes require more trainings and interventions. Manual processes can be partially controlled. Customer put pressure to do work fast and prompt despite everyone is working hard. No consistency in reporting.

In his article Growing Pains, recognizing and assessing the need for organizational change3, Eric Flamholz identifies the ten most common organizational growing pains, people feel there are not enough hours in the day, people spend too much time putting out fires, people are not aware of what other people are doing, people lack understanding about where the firm is headed, there are too few good managers, people feel that “I have to do it myself if I want to get it done correctly”, people feel that meetings are a waste of time, when plans are made there is very little follow-up and things just don’t get done, people feel insecure about their place in the firm and lastly the firm continues to grow in sales but not in profits.

When I interviewed the change leaders at Employees’ Provident Fund and Nepal Bank limited, the situation at the time when they realized the need for change was in some way similar to what Flamholz has suggested. In both these organizations existing system which automated only few business process were changed to cover a wider area. NBL saw the change when its management was under a foreign management team (ICC bank Management Team, ICCMT) which saw investment in Information Technology as a major strategy to modernize the bank and to tackle in the competition that the new banks were throwing at it.

3 http://entrepreneurs.about.com/cs/beyondstartup/a/uc070903.htm

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At employees’ provident fund, there were independent and widely spread software solutions (most of them developed in house in Fox-pro) in use across the organization. The reporting process was complex and very lengthy, the results not reliable and it required many experts. However the major pressure came from the contributors (clients of employees’ provident fund) to make its accounting fast, transparent and reliable.

Here I would like to borrow a term from system development called the big-bang approach. In this approach system is developed all and at once. At NBL the approach was more or less big-bang approach. They wanted to have a solution for all (here all refers to its core banking operations) operation at once and they went into the tender process and a rigorous analysis of proposal in their context. They selected the “Newton” software from an Indian Company. It was a core solution to them. However at Employees’ Provident Fund realizing they could not get a tailor made system to fit their context and with practice of developing programs in-house they targeted only the fund management process to be automated. The contract was given to Information Technology Nepal a private software development company. The company would develop software forming a team that also consisted technical staffs from computer section.

Organizational change strategy at IBM

Change leadership: develop a culture for change. Change execution: help people and organizations overcome major changes. High-performance culture: recognize the importance of organizational culture as a key enabler of business

performance. Value realization: build the business case to drive the change program. Program strategy and management: develop a change strategy to enable future growth. Program leadership and governance: ensure focus, alignment, and execution discipline to achieve desired

benefits on time and on budget. Organization design: align organizational structures and networks to delivery of business objectives. Stakeholder engagement and communications: identify, align and obtain commitment for change. Culture transformation: enhance organizational performance for increased productivity. Collaboration and partnering: enable organization innovation through highly beneficial relationships. Technology driven change management: align people with technology driven change. Change management for mergers and acquisitions: realize the people synergies.

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Theoritical analysis of changeEarlier it was Kurt Lewin who made three stages of change process distinct, he proposed a successful change undergoes through three phases and they are unfreezing, changing and refreezing. According to him in any individual, group or organization there are two competing forces in operation. These are the forces of stability that aim to maintain the human system in the status quo and the forces of change that push the system towards the change. In most of the human being these forces are in equilibrium. Thus for change to take place this status quo should be challenged either by strengthening the forces of change or by weakening the forces of stability (restraining forces). He argued that enhancing the forces of change would lead to a corresponding increase in the forces of stability. Therefore, weakening or reducing the forces of stability can more effectively bring about change. He argues that the forces of stability and change are both within the organization. These forces exist in all organization and the change leader has to discover these forces to push the organization towards a new state.

Let us see Lewin’s three stages of change

Unfreeze

With a passage of time, a well set structure leads people to be habituated to some particular practices, processes and ways. In the changed context, tasks that are not relevant or useful anymore are still being performed by force of habit, without anyone questioning their legitimacy. Unfreezing means getting people to gain perspective on their day-to-day activities, to unlearn their inefficient ways and to be ready to move on to next level to do things in different ways.

Change

After the system, process and people have been unfrozen, they can be led to change. The change process can be highly dynamic as automation. Automation requires people to take new roles, modify their work practices, learn new things, it requires some time to smoothen up. When processes change chaos is destined to happen but a leader should focus on settling down things and change to take its course.

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Refreeze

At this stage the new behaviors, attitudes and practices are absorbed into the organizational culture. The newly automated systems are integrated into the organizational system e.g. the reports from the transaction processing system now will be accepted by the finance department, people start referring to online blogs to seek solutions; they develop new skills and provide support to each other. Changes will be made down the line and people identify them with this new system. They start feeling easy and confident with this new system.

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Poor network infrastructure

In-efficient information mgmt.

Organizational members’ inertia

Organizational structure and layout

Board’s commitmentAudit reports

Bureaucratic red-tapism

-1

-2

-3

-4

-5

-6

+6

+5

+4

+3

+2

+1

Force field analysis at Employee Provident Fund

Restraining forces

Organizationtal members’ inertia

When the CMS project was initiated the average age of the organizational members was above 40, they had been habituated to work manually and most of them had never used computers in their life. It was a mammoth task to train these members, modify their work styles and make them use computer.

Organizational structure and layout

In terms of effectiveness it was the smallest restraining force. The layout of EPF building at Thamel (major target of CMS project) had no network wiring in place, electricity wirings were not very modern. A transaction had to pass through multiple level of staffs from verification to approval. Branches outside Kathmandu on the other hand were on rented buildings and EPF could do very little to make necessary changes.

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EPF’s expansion

Cases of forgery

Poor network infrastructure

Many branches like Dhankuta, Surkhet, Dhangadi lacked network infrastructure. There were no private sectors providing lease lines or any other form of connectivity while NTC’s service was unreliable.

Inefficient information management

There was no efficient filing system at EPF, it required lot of time to locate an individual’s information. These documents were spread among many sections and sub-sections. Migration of existing data (fox-pro and manual files) was a very difficult task.4

Bureaucratic red tapism

EPF is a multi-layered organization. It consists of Board the representatives of which are appointed by Government. From tenders to small expenditure (more than 0.2 million rupees currently) requires Board’s approval. Board meeting still takes place less frequently and at that time it would not take place for more than 2 months. Thus the bureaucracy delayed decision making.

Pushing forces

Audit reports

Auditors always complained about the reliability of the existing reports. They advised EPF to have full scale computerized system time and again. It raised the issue of accountability of EPF.

Customer’s pressure

Undoubtedly EPF’s work before CMS was time consuming and inefficient. The accounting of customers‘(contributors’) financial transaction was slow, at the middle of one fiscal year EPF would still be processing previous fiscal year’s transactions. This raised dissatisfaction in customers and they started raising questions against the credibility of EPF. It was the major driving force pushing automation.

Board’s commitment

When EPF proposed the development of full computerized system the board supported and appreciated the idea. Only few proposals faced criticism and skepticism. However this commitment was not a major driving force as board took long time to make a decision.

Expansion of EPF

Expansion of EPF (currently EPF has 8 branches) required it to have information available at all branches readily. Under manual system this was not possible however it could be achieved by centralized contribution management system.

4 Migration of identity cards and records from previous fiscal year has not taken place till date, only opening balance was transferred during migration.

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Forgery Cases

Forgery cases start to surface frequently and loop-holes in the existing manual system was held responsible for these cases. CMS was proposed as the ultimate panacea.

In their book “Change management: altering mindsets in a global context”, V. Nilakant and S. Ramnarayan proposes the concept of organizational routine with their concept trying to take Lewin’s proposition further. They argue that individual’s behavior is actually organized in such a manner that it takes place according to a set of written or unwritten rules. When activities and behavior become organized, they become repetitive and predictable. Hence however difficult, time consuming and error-prone the manual system or any other existing system may be people will get used to that routine. They argue that organizational change involves changing routines in an organization. These routines are embedded in people’s head as mindsets or mental models. Since routines create and sustain stability in an organization, change management is largely about changing people’s mindsets.

Schein’s ModelEdgar Schein, (Massachusetts Institute of Technology) argues change in individuals involves two opposing forces. One is the learning anxiety and the other is survival anxiety. According to him, the prospect of learning something new itself produces anxiety. Individuals are reluctant to learn anything because they fear that they might appear less competent and confident to others and have chances of being neglected. On the other hand when individuals shun change they develop a feeling that – unless we learn something new-we are going to be out of business or we shall fail to achieve some important goals. He proposes that reducing learning anxiety and increasing survival anxiety can more effectively bring about change. A leader has to involve himself in creating a climate of psychological safety so that individuals feel comfortable in changing their mental models and ways of thinking. Individuals need to be persuaded to give up their old mental models so that they can embrace new ways of thinking and thus Schein is against coercive persuasion which according him will have more dissuading effect than convincing.

Daft’s modelFollowing Lewin’s model Richard L. Daft say leaders build organization-wide commitment by taking employees through three stages, preparation, employees hear about the change through memos, meetings, speeches, or personal contact and become aware that the change will directly affect their work. In the second stage lies the acceptance, leaders help employees develop an understanding of the full impact of the change and the positive outcomes of making the change. Finally the commitment process begins. The commitment stage involves the steps of installation and institutionalization. Installation is a trial process for the change, which gives leaders an opportunity to discuss problems and employee concerns and build commitment to action. In the final step institutionalization, employees view the change not as something new but as a normal and integral part of the organizational operations.

All these propositions are equally important in case of automation process specially when the company has a long history. While a newly formed organization is more flexible and receptive to change efforts it is not true in case of bigger and older organizations due to the fact that a particular way of doing work

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has taken the shape of their organizational culture. Though difficult the chances of successful implementation of change is not dire. While I shall discuss in detail how to do away with the impediments of change in the resistance to change section. I would like to explain why Lewin’s model plays significant role even when its automation.

The change leaders have to make people ready. In very rare cases people at the bottom level or the line managers realize the need for change, but fortunately automation is one such change where usually the bottom level employees, their supervisors and the line managers usually are asking for improvement. However when it comes to resistance automation processes are not spared at all in comparison to other change. Again, the need for change in countries like ours and in the government sector where most of the employees are older have served the organizations for more than 10 years, the resistance is high. In their research article, facilitating organizational change, Holt et al. observes that the resistance to change is directly proportional to the job tenure. So, the leader has to have an unfreezing strategy, to develop readiness for change among the employees. At the first level it can be done by enriching them with information. Letting them know why automation is important, how helpful automation will be to the organizational members and how it aims at organizational good in the long run. In my experiences at both Nepal Bank Limited and Employees’ Provident Fund, Nepal the need for automation was foreseen by the top management. In the former employee’s involvement was little while in the later even the employees were feeling that their job was becoming difficult, it had become too routine and they had become more dependent on few people who knew computer. However they did not know what could get them out of status quo. Unfortunately in both the organizations the unfreezing efforts were very little. At Nepal Bank Limited the trade unions were made aware of the change that was to be initiated however at EPF the information was delivered in meeting, formal programs etc. With mere 500 employees most of them stationed at the Thamel branch where the software was being developed organizational members were aware that software was being developed, on contrary in NBL with staffs of more than 6000, at the time of change, information reach was debatable. Change was rather prompt in both these organization, by the time everyone knew about it properly the system was automated. I wonder if both these organizations made formal attempts to strengthen the pushing forces and weaken the restraining force. NBL might argue the time was harsh and change had to be brought in very fast (then management ICMT had contract for only 4 years) at EPF a proper planning could have been done, the analysis of which is beyond the scope of this paper.

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Kotter’s eight phase modelJohn Kotter concluded in his book "A force for Change: How Leadership Differs from Management" (1990) that there are eight reasons why many change processes fail:

Allowing too much complacency Failing to build a substantial coalition Understanding the need for a clear vision Failing to clearly communicate the vision Permitting roadblocks against the vision Not planning and getting short-term wins Declaring victory too soon Not anchoring changes in corporate culture

Establish a sense of urgency

Kotter argues "Without motivation, people won’t help and the effort goes nowhere…. Executives underestimate how hard it can be to drive people out of their comfort zones". In the more successful cases the leadership group facilitates a frank discussion of potentially unpleasant facts: about the new competition, flat earnings, decreasing market share, or other relevant indicators. It is helpful to use outsiders (say, for us, to bring in consultants, the unchurched, people from other denominations, regional or national staff people) who can share the "big picture" from a different perspective and help broaden the awareness of your members. When is the urgency level high enough? Kotter suggests it is when 75% of your leadership is honestly convinced that business as usual is no longer an acceptable plan.

Building guiding teams

The scale of Automation and hence the magnitude of change depends upon the business process that is being targeted for automation. At both Nepal Bank Limited and Employees’ Provident Fund, the magnitude of change was very large as it was trying to automate the main business process that these organizations were in. In this context it is very important to have a right time, with commitment with right mix of skills and development.

Get the vision right

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Once the team is formed it should focus on the KISS model (Keep it simple stupid). The vision should be developed in such a way that it encourages simplicity and efficiency.

Communicate for buy in

Communication is at the crux of successful change. The team and the change leaders/agents must bring in as many organizational members as possible. They should continuously reinforce the need for automation and keep them updated about the progress and the success achieved so far. Leaders should take every opportunity to reinforce their commitment to change. In NBL the resistance was already there for ICMT and there were very few meetings where management would inform the staffs about the progress. At EPF the story was different. EPF has a culture of organizing at-least four general functions annually and the presence of staffs in these functions is substantial. In every such gatherings and meetings the change leaders communicated how enthusiastic they were about the progress going on.

Empower action

A leader should encourage constructive ideas, listen and analyze criticisms, seek for feedback and ultimately reward the positive outcome and discourage the negative ones. Leaders of change should not assume that once implementation is complete and so is training from the very next day everything will start falling in place. That would be very myopic. They should encourage positive work while support if mistakes and errors surface.

Many times the leaders are victim of functional myopia. They forget a simple fact that even after rigorous testing bugs will continue to appear but they become too defensive of the system and are apprehensive of people. They blame people for all mistakes while few of them might be from the malfunction of system programs. Continuous blaming and reprimanding employees will make them more critical of change rather that endorsing it.

Create short term wins

As suggested earlier change leaders should not assume things will start falling in place from the very next day. They set high targets which ultimately become discouraging to themselves when they are not met. The initiatives should be manageable. They start many processes in parallel to all of which they cannot commit their own involvement. For example the first step in many of the automation soon after implementation is migration. Leaders instead of focusing in migrating data of one or few areas/sources want to migrate all data at once and the experience turns out to be bitter.

Don’t let up

Change leaders should foster and encourage determination and persistence. They should encourage progress reporting and highlight the achieved and future milestones.

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Make it stick

Change leaders should continue to display their commitment to change even after the automation has completed and the implementation has been successful. They should reinforce the values reward the efforts, promote people who have been committed, supportive and involved in change process which will create a culture that does not fear change. For all change new recruitments, promotions, rewards may not be possible but for bigger ones leaders will not only make a particular change successful but will ensure the future changes will be equally successful.

the four agreements - don miguel ruiz's code for lifeIn his book, the four agreements (1997), Don Miguel Ruiz highlights the four agreements as inspiration nal code of life. This can be applied by leaders of change.

agreement 1Be impeccable with your word - Speak with integrity. Say only what you mean. Avoid using the word to speak against yourself or to gossip about others. Use the power of your word in the direction of truth and love.

agreement 2Don’t take anything personally - Nothing others do is because of you. What others say and do is a projection of their own reality, their own dream. When you are immune to the opinions and actions of others, you won’t be the victim of needless suffering.

agreement 3Don’t make assumptions - Find the courage to ask questions and to express what you really want. Communicate with others as clearly as you can to avoid misunderstandings, sadness and drama. With just this one agreement, you can completely transform your life.

agreement 4Always do your best - Your best is going to change from moment to moment; it will be different when you are healthy as opposed to sick. Under any circumstance, simply do your best, and you will avoid self-judgment, self-abuse and regret.

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ADKAR ModelADKAR is an individual change management model. In other words, ADKAR represents the essential elements of change for a single person. When a group of individuals experience change, ADKAR can be used:

As a coaching tool to support individuals through the change process

To guide change management activities like communications, sponsorship, coaching and training

To diagnose a struggling change by performing an ADKAR assessment

Awareness

It is not the top management whose way of doing work changes when automation process completes. It’s the work of the blue collar staffs, account staffs and the staffs handling the transaction and their concerned department has to change their ways. So at the beginning it is very important to make all level of staff aware why the upcoming change is needed. Change implemented to improve business operations, stay ahead in competition, and/or increase the bottom line, is not only wise, but also necessary for success.

Desire

The leaders and the agents of change have to ensure that the desire to adopt to change, make it successful is being developed in the employees. They should encourage the desire of the organizational members to support and actively participate in the forthcoming change, regardless of the immediate appeal or flash of the new procedures or processes.

Knowledge

According it is a must for manager to provide training and education to its organizational members about the change and help them how to adapt accordingly. In an automated environment it is very much important to provide all the necessary training to staffs. Its not only training them on how to use the software. Working with computers for the first timers is a tiring struggle, so the training should begin from the basics of computers. In Nepal Bank Limited, Employees Provident Fund not more than 10 p.c. of the staffs knew the basics of computer. There was a huge challenging task to make the automated systems successful when most users were above mid-forties and they had never turned on a computer on their own. It is advisable to organizations to start giving the basics of computers and automated system from the very beginning i.e. long before the strange software takes over them. Automation and training can run in parallel and it will also create enthusiasm among staffs about using new system.

Ability

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One important factor about change is that it should be able to empower people. When an organization is automating itself, it should look forward to enabling its people/staffs to be able to make change successful, to adapt themselves to changed environment.

Reinforcement

Individuals and organizations must be reinforced to sustain any changes making them the new behavior, if not; an individual or organization will probably revert back to their old behavior.

ADKAR elements Factors influencing successAwarenessOf the need for change

A person’s view of the current state How a person perceives problems Credibility of the sender of awareness messages Circulation of misinformation or rumors Contestablity of the reasons for change

DesireTo support and participate in the change

The nature of the change (what the change is and how it will impact each person)

The organizational or environmental context for the change (his or her perception of the organization or environment that is subject to change)

Each individual’s personal situation What motivates a person (those intrinsic motivators

that are unique to an individual)Knowledge Of how to change

The current knowledge base of an individual The capability of this person to gain additional

knowledge Resources available for education and training Access to or existence of the required knowledge

AbilityTo implement required skills and behaviors

Psychological blocks Physical abilities Intellectual capability The time available to develop the needed skills The availability of resources to support the

development of new abilitiesReinforcementTo sustain the change

The degree to which reinforcement is meaningful and specific to the person impacted by the change

The association of the reinforcement with actual demonstrated progress or accomplishment

The absence of negative consequences An accountability system that creates an ongoing

mechanism to reinforce the changeAdkar: A Model for Change in Business, Government and Our Community  By Jeffrey M. Hiatt

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Why change fails?

In spite of the importance and permanence of organizational change, most change initiatives fail to deliver the expected organizational benefits. This failure occurs for a number of reasons. You might recognize one or more of these in your organization.

absence of a change champion or one who is too junior in the organization

At EPF there was one particular leader who showed extreme commitment to change. He not only ensured the system was ultimately completed but took every opportunity to reinforce the idea among others that automation was inevitable and it will simplify work, make service efficient and work less error prone. At NBL staffs cannot say with certainty that there was a strong champion of change. Due to this reason I observed that there was more resistance to change at NBL than at EPF. At EPF the CMS system installed and people are using it with little whining while at NBL, staffs still observe (after more than 6 years) Newton Banking solution with doubt.

In other organizations when change champion is someone junior and new, people observe the messages of change was a temporary excitement, they doubt change.

poor executive sponsorship or senior management support

Change at times is a result of new regulatory requirements from government/regulatory agencies about which the management of the organization itself is skeptical. The management thus fails to sponsor change, commit them fully to change. However even when change is essential (not only because it is a regulatory requirement) senor management do not provide full support to it by allocating it resources, providing feedbacks and suggestions change can fail. At NBL where the branch managers were already nearing the retirement observed change as something strange, difficult to learn and at these branches the automation was difficult. These branches made more mistakes than others, organizational members avoided trainings etc.

Discrepancy between top management values and behaviors

Again this is something related with commitment. Managers talk one thing while they practice something another. They stress on the need for automation in general meetings and gatherings but at individual level cannot embrace the automation process themselves change is destined to fail.

poor project management skills

Bringing about change is not operation, it is unique in nature, time bound and consumes resources and hence qualifies to be a project (some are even programs). When the change leaders do not have project management skills (time, cost, quality, resource, procurement management skills) change can fail.

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hope rested on a one-dimensional solution

Change on one hand might appear to address one problem but on other is a source of another problem. Change is multidimensional with its impacts on strategy, people, organizational culture, work procedures a simple focus on one dimension leads to failure. For example automation at both NBL and EPF would not only alter the way daily operations were executed, it required people to learn new skills (computer skills) if management had only focus on reengineering business process forgetting the people aspects, change would have deemed to fail.

Lack of organizational readiness

Organizations may not be ready for change. Before change to be initiated organization should be made adaptive to change. Its culture, work practice and even its people should be change friendly. Making organization ready is Kurt Lewin’s unfreezing process. If leaders initiated automation without making arrangement for network terminals, architecture supporting resource sharing, people’s knowledge about computers change will see fierce resistance.

Overdependence on outside help

EPF carried out the automation with IT Nepal Solutions. The programmers from IT Nepal came to EPF office at Thamel everyday and they did preliminary analysis, wrote computer programs within EPF’s premise. The idea of EPF was that with this model of development EPFs staffs (there already was positions of programmers at EPF) would have control on everything and they would be able to fix bugs, make necessary changes to programs when required however the participation of insiders was not as per expected. The programs was being written in computer language they didn’t know about, these very staffs resisted this change as a result of which IT Nepal solely carried out the development. When the project was handed to EPF and bugs started to surface, new requirements appeared it became to difficult to fix those errors and make necessary changes. Ultimately EPF had to hire new programmers existing programmers had to be promoted just to create room for new programmers. It is often said that it had become necessary for EPF to hire at least one programmer involved in the development of CMS (member of IT Nepal Team) so that CMS would not fail. Later a programmer from IT Nepal was brought in along with two others (one of them was this writer).

change team diverted to other projects

Inefficient management cannot utilize resources to its maximum. Even when the level of change is large the leaders fail to dedicate resources (human resource in specific) explicitly to the change process. These people are given many other responsibilities so that they cannot put in all necessary efforts to change process. When CMS development was being carried out, one of the programmers was sent to China for further education, other two went for sabbatical and the only programmer had to support existing fox-pro systems.

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Making change successful

Theoritical analysisFrom Cummings and Worley’s Organizational development following are necessary for successful change

a. Motivating Change“Since the future is uncertain and may adversely affect people’s competencies, worth, and coping abilities, organization members generally do not support change unless compelling reasons convince them to do so.” (Cummings and Worley). Change can be motivated by creating readiness, overcoming resistance to change etc.

b. Creating a visionA vision is required that describes the values and purpose of organizational change. It is the rationale and logic explaining the need for change. When CMS system was being developed one vision was that of prompt service delivery from few days to less than an hour. Manual system required searching through folders, files and then into individual leaflets. Many of these papers would be at different sections and hence it was a time consuming process. When everything was available in computer, it was matter of few minutes at maximum, the reconciliation was automated and no human intervention was required. Despite unfriendly physical layout a client can get loan against his contribution from EPF in less than an hour. However it is only because of inefficient queuing mechanism clients have to wait for a longer time (it is not because of information processing).

c. Developing political supportPeople and groups in an organization have different preferences and interests. Automation brings a great shift in power equation. People start experiencing that they are losing control and are becoming more computer department. At EPF the current computer department was a mere wing/subsidiary of the Contributors service department, soon after automation it became a fully fledged department with budget of its own and with control over all computer (information) related resources. The contributor’s service department that once controlled the computer section was now depended on support and services of computer department. No longer could the programmers be summoned when required, they had to go to the programmers follow a well established process. Even before the clients they were not powerful officers when problems came in the solution was not on their discretion but at the discretion of computer department. Thus automation was clearly threatening the balance of power resulting in conflicts and struggles. EPF tried to ease the situation by having the influential managers and executives into the CMS development and analysis committee, by developing a process that tried to make Contributor’s Service Department and Computer Department more or less equal in power.The sequential strategies to have political support includes

Assessing the Change Agent Power

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Identifying Key Stakeholders Influencing Stakeholders

d. Managing the transitionBetween the existing stage of status quo to the desired stage lies a complex, longer and difficult transition state. Cummings and Worley have identified three major activities and structures to facilitate organizational transition:

i) Activity PlanningDuring CMS development milestones were set and the sequence of activities were planned. The parameters that determined the success of short-term goals were defined. The necessary resource requirement was planned as well.

ii) Commitment planningIdentifying key people and groups whose commitment is needed for change to occur is equally important. It involves identifying these people, bringing them into the team or into the leader’s in-group5 and confirming they share the vision lies at the core of it.

iii) Change-management structuresChange as suggested earlier is a project and it should have its own structure. From Cummings and Worley alternative management structures for change include the following

The change manager/leader Project manager temporarily assigned to co-ordinate the transition. The formal organization to manage the change effort and to supervise the

operations. Representatives of major constituencies involved in change. Natural leaders who have the confidence and trust of large numbers of affected A cross section of people representing different organizational functions and

levels managing change. A “kitchen cabinet” representing people whom the chief executive consults

with, confides in and that manages the change effort.

e. Sustaining momentumOnce the change process begins it should not slow down despite resistances and hindrances. To ensure momentum following are needed

i) Providing resources for changeExtra resources need for activities such as training, consultation, data collection and feedback, and special meetings. A separate budget should be allocated to facilitate change.

ii) Building a support system for change agents

5 LMX theory of leadership

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Change agents also require support. Change is a tiring process and change agents have to face criticisms, resistances that make them vulnerable. A system should be in place to provide support to these agents in terms of consultants, protecting them against failures, giving them incentives, making room for future development etc.

iii) Developing New Competencies and SkillsAutomation frequently require new knowledge, skills and behaviors from organization members. Automation does not succeed when people are not skilled in computers (if automation is hardware oriented, people should learn to use these hardware, learn control mechanisms and even simple troubleshooting), reporting tools and few basic computer hardware related ideas and skills. Organization should have proper training and development package to aid development of required new competencies and skills.

iv) Reinforcing new behaviorsNew behaviors (positive) would be reinforced when rewards and recognition are associated with them. This can be accomplished by linking formal rewards directly to the desired behaviors.

v) Staying the CourseToo fast change or too slow change does not bring desired result and sometime lead to failure. At times as Cummings and Worley point out, managers do not keep focused on a change because they want to implement the next big idea that comes along. They lose track and the change stops in the mid-way or it loses direction.

Five Change Factors of Pettigrew and whipp

1. Environmental assessmentContinuous monitoring of both the internal and external environment (competition) of the organization through open learning systems.

2. Human resources as assets and liabilitiesEmployees should know that they are seen as valuable, and they should feel that the organization trusts them.

3. Linking strategic and operational changeIntentions are implemented through time. Bundling of operational activities is powerful and can lead to new strategic changes.

4. Leading the change

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Move the organization ahead. Creating the right climate for change. Co-ordinating activities. Steering. Set the agenda not only for the direction of the change, but also for the right vision and values.

5. Overall coherenceA change strategy should be consistent (clear goals), consonant (with its environment), provide a competitive edge and be feasible.

A related/similar organizational design concept is the Star Model by Galbraith. The star has 5 points:

1. Strategy : determines the direction of change2. Structure : determines where the decision-making power lies3. People : selection and development of the right people4. Process : determines the flow of information5. Rewards : provide motivation and incentives for desired behavior

Jay Galbraith argues that in any organizational change approach, one must take a systemic view and make sure that all five areas above are addressed.

Four Pillars for Successful Business Process Automation

Ramiro Cuentas (blog.processmaker.com)

“If we want to create a schema for process automation, the principle problem that we must resolve is the modeling of the current and proposed process context. Based on my experience in process automation I can say that there exists a high-priority necessity for the detailed evaluation of the current activites of the process one wishes to automate in order to assure the successful future implementation of the automation of said process, based on four fundamental factors: maturity, process definition, organizational culture, and managerial drive.”

In order for a process to be automated using a BPMS (Business Process Management System) and to create a successful solution for management and productivity improvement, the process requires the following attributes: a high level of maturity, formal establishment as part of the activities of each actor that participates in said process, changes to the organizational paper-based culture, and managerial enthusiasm linked to a formally defined leadership structure, in order to bring to life the entire automation process. These four factors are the fundamental pillars for an accurate and successful process automation that reflects the reality of the process.

Process maturity is the extent to which a process is explicitly defined, measured, controlled, and administrated, and is considered the principle categorization for effectiveness. These elements are what constitute maturity as the first of our four fundamental pillars for a successful process automation.

The second pillar that supports process automation is the correct definition of the process that one wishes to implement, taking into account the current operations of the organization. This definition consists of a detailed description of the activities realized by each actor of the process, and the formalization, approval, and diffusion of these activities through a document backed by upper management. If changes to the functional model occur, they should be coordinated and understood by

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upper management in order to promote an adequate diffusion and inaction of the proposed changes.

The evolution away from “paper-based culture” is considered the third pillar for successful automation. Paper should be set aside and we must learn to count with confidence on the electronic management of processes and the automatic emission of physical copies of only the most critical documents. Additionally, we must trust in process revision through computer and BPM tools that will be utilized for management. Confidence in the internal management of electronic processes should be provided by the BPM system supplier, in addition to security in the management of actors that use the tool.

Managerial input throughout the automation process is the fourth pillar, and it is of utmost importance during the following phases: process modeling, model testing, design adjustments, process implementation in a run-time environment, and the post-production phase of any process implemented and automated through a BPM tool. The formal assignment of project leaders and the commitment of end users in the organization that seeks to automate its processes are essential in the previously mentioned phases. This pervasive organizational commitment fosters adequate communication among the members of the process automation team and the leaders of the automation promotion initiative.

In order to address automated and sustainable business process solutions in the medium-term (due to the dynamic nature of a process), the four pillars discussed should exist. In the case that one of these elements is lacking, it should be addressed and worked on in order to successfully realize the implementation of a BPM system.

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Resistance to automation and managing resistance

Folger & Skarlicki (1999) - "organizational change can generate skepticism and resistance in employees, making it sometimes difficult or impossible to implement organizational improvements"

– Why people resist change: An employee may be operating on the basis of a desire to protect what they feel is the best

interests of the organizationAn employee may provoke insightful and well-intended debate, criticism, or disagreement in order to produce better understanding as well as additional options and solutions.

In their article “Decoding Resistance to Change” (HBR April, 2009) Jeffrey Ford and Laurie Ford argues that resistance is an important feedback and dismissing it robs the change leaders of a powerful tool as they try to implement change.

The kind of automation that this term paper is trying to present is large of its kind. It changes the way people do their work, it brings about power shift and makes the previously expert novice and in extreme case useless as well. At Nepal Bank Limited this change helped the management to trim its mammoth (in terms of business volume and work) from more than 6000 to less than 4000, at Employees’ Provident Fund it did not even cut a single job but changed the power equation, required people to change themselves to be helpful. In an informal canteen talk a staff at EPF said one reason said so many people joined Unions6 and became active is because of computerization. He argued in one hand with automation work became fast, efficient and less error prone so people had much spare time, they used this by participating in Union related activities. On the other hand there were people who could not change themselves when the organization changed when work style and culture changed; they joined union for security reasons. Though there is no concrete evidence supporting this staff’s view, this is a worthy logic.

There are three basic sources of impediments for change and they are

Organizational Level

Organizational culture: Edgar Schein, MIT Sloan Professor defines cultural change as “"A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way you perceive, think, and feel in relation to those problems."

6 Unions in NBL and EPF both are looked upon more negatively than positively. People perceive unionists as those who do not like working and who do not serve the organization in anyway except for organizing programs most of which are politically motivated. They are often referred as lazy-bones. Unfortunately active union members are rarely seen working and their excuse is that they are occupied with union related activities. With extreme alignment with political parties these Unions are very powerful that they have a big say in management. They decide on who to promote, who to transfer, who to receive incentives. This is a bitter irony in Nepal.

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One of the major cultural hindrances that EPF faced during the time of automation was its “Club culture” valuing the seniority. The automation usually brings the young people in the fore-front as they learn faster and are already skilled in computer systems. Thus people fought with problems in seeking who should they refer to. Another culture that stood as an impediment was no sharing of information and ‘know-hows’. I believe this is a general culture in many Nepalese organization where people hesitate to help others by letting them know how to do work and even sharing their own work. Those who would grasp the new ways from trainings and informal trouble-shooting did not come forward when peers faced similar problems.Unfortunately the problem was so deep rooted that programmers, analysts (insiders as well as outsiders) didn’t share ideas clearly. The brainstorming sessions exposed their securities but users do not confirm that the management or change leaders at EPF tried to change the culture. The culture is still persistent.There was a strong commitment from the change leaders. The meetings were dominated by one leader in specific who was/is identified as a computer expert. In informal interviews people who became part of the change said many processes could have been simplified but the particular leader was very rigid and his rigidness exposed system to various threats and other complicated many business processes. This leader is not a computer expert but enjoys such citation because others knew very little about computers. No one argued with this leader as he was too dominant and threw technical reasons which others failed to understand. However other group of staff maintain that the automation was only possible because the leader denied to listen to others which would have lengthened the change process by few more years.

Differences in functional orientations Automation requires involvement of people from different departments each having different orientation. Credit department’s focus would be only on loan processing while focus of General administration would be on procurement, legal department will emphasize more on legal orientations. This will lead to polarization of various members leading to extreme form of resistance.

Power and vested interests As suggested earlier, automation shifts power equations. People who have been powerful under the manual system or any other existing system might no longer have power while those who had no power can become more powerful.At EPF the existing system was built on Foxpro legacy system. It was complex program where in order to view reports commands had to be given. The system was not menu driven and it brought about dependency upon few people who knew computers. They were powerful and everyone tried to please them so that they could get their work done fast. The proposed automated system made the users equally powerful. They no-longer had to request these “computer-experts” for reports and data. These people strongly opposed the new system.

This new system was built in another computer program and Fox-Pro system was already becoming obsolete. These computer experts had no idea about the new computer program and all of a sudden they became unimportant and even worthless from highly important individuals.

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People in the general administration that handled purchasing and inventory were opposed to paper-less system. They argued the ledgers should be printed for few more years citing the organization could not be confident on the new system. It took four years when the ledger printing (that consumed lot of paper) was partially discontinued.

Organizational physical layout:

Automation not only reengineers the business process and the way people do their work, as a part of the chain that it brings in, it also brings about changes (minor as well as major) to the organizational layout. The existing architecture may not support additional wirings, networking at the technical level and placement of counters etc. Many organizations move to new buildings while others undergo massive architectural changes to support automation. These changing in layout may not be easy.

Group level

Strong informal norms and expectations

Groups have their own expectation and they have their own set of norms. Even in a closed circle of few friends the norms are very strong and the group members have higher expectations from their peers. When a group forms a negative impression on change it is very difficult to influence individual member to adapt to change.

Group cohesiveness

EPF’s employees had been in the organization for years. It had led to the formation of many informal groups that behaved in a particular way. When these groups showed resistance to change, their cohesiveness intensified the resistance.

Groupthink or escalation of commitment

In highly cohesive group all members held one particular belief and opinion. In these cases when the influential member of the group has negative opinions about change the entire group will form negative opinions about change. In unionized organization employees align to the official statements/opinions of their unions.

Individual Level

Resistance for people can be a defense mechanism caused by frustration and anxiety. Individuals may not be resisting the change as much as they are resisting a potential loss of status, pay, comfort, or is it power that arises from expertise. In many case there is not a disagreement with the benefits of the new process, but rather a fear of the unknown future and about their ability to adapt to it, e.g. fear that one will not be able to develop new skills and behaviors that are required in a new work setting. At individual level there are following types of resistanceTechnical resistance

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Most people view technology as something difficult, learning to use which is not only tedious but exposes their vulnerability. At the depth of this lies the learning anxiety, they fear when they have to learn new things they might be exposed as incompetent and unskilled. There is the fear of unknown. Technology thus becomes something on which if they do not become careful will bring results, create blunders that can pose serious threat to them and their career. This type of resistance is directly proportional to age. This is undoubtedly the biggest form of individual level resistance during the process of automation.

Political resistance

Political resistance has to do with changing power equations. As repeated in this term paper automation brings about major shift in power. Important people become useless and vice-versa. People who are at the losing end will always resist change.

Cultural resistance

Values, ideas and customs have high influence on shaping people attitude and perception. This in turn affects change. A banking system that requires annual reconciliation with central and remote backup server during the time of dashain will meet with resistance as people do not like coming to office, serving overnight during national holidays.

The other resistances to change include

Not knowing the purpose of change Threat to personal image, power and vested interests Inertia or complacency and conformity oriented organizational culture Summation of perceived personal loss Fear of failure Capability/skills gap Ghosts of previous failed change initiatives Peer group pressure Forced conformity of powerful others. Too rapid change

In their research paper “resistencias” Martinez et al. suggest that strategic changes attract more resistance than evolutionary changes. They observe that no single source of resistance (leadership inaction, embedded routines, collective action problems, capability gap and cynicism) played significant role in affecting the process of change. They further observed that the source of resistance to change with highest influence were related to difficulties created by the existence of deeply rooted values.

Capability/skills gapCapability/skills gap is a very powerful source of resistance. This is very true in case of both NBL and EPF where the average age of staffs is above forty. At NBL the average age could have been even more when “NEWTON Core banking solution” was implemented. These people had no knowledge about computer at all more than 90% didn’t have computer at home and never touched a computer in their life. Among

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those were people who had seen the time when computer had just come to Nepal. It was treated as something sacred in a closely guarded room. One of my colleague puts it this way “When I went to the national computer center first time with an executive to put our program into batch to be processed upon when our turn would come I realized the room where the computer was kept was more sophisticated guarded and clean than that of our General Manager.” They didn’t have to leave their shoes at door when they entered into their General Manager’s office they had to do so to enter into computer room. It established an impression that computer was very precious thing and very important tiniest of mistakes would make their life a hell. Later when desktop computer became popular and EPF bought its own computers these people didn’t even get closer to the dreaded machine because they thought just by mere touching it the computer will break down.

The Seven Principles of Successful Change

1. Accept your worth and acknowledge others’ worth. Accepting and acknowledging worth is the foundation of successful change.

2. Generate trust. When there is trust between two or more people, change is more readily accepted. Being trusted and trusting others allows you and others to be positive, productive individuals. Trust is the centerpiece of successful change.

3. Learn by empathy. Those who continuously learn about themselves, others, work and life have a greater capacity for change. By observing others, broadening interests and understanding different perspectives, you can gain an instinctive understanding of change. Connect to change by daily learning.

4. Embrace change. Change is inevitable and appears to be increasing at exponential rates. You can either resist change or accept it.

5. Unleash the synergy. Team synergy is the result of two or more people valuing and trusting each other. When two or more people produce ideas, they ultimately make improvements that are significantly greater than would have been possible separately.

6. Discover champions, depend on masters and find a sage. Effective change will be steered by more than a leader. The environment of change will eliminate autocratic supervision. Instead, it will seek champions, masters and sages to foster change.

7. Liberate decision-making. Change resulting from one person’s decisions rarely works. Share decision-making with those around you. Empower them. Collective ownership in decisions promotes change.

*From "The Eagle & the Monk: Seven Principles of Successful Change" by William A. Jenkins and Richard W. Oliver (United Publishers Group, 1998)

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Dealing with resistance to change

Worley and Cummings present three major strategies for dealing with resistance to change and they are

Empathy and support

A leader must admit that to accept change is not easy for everyone. Leaders must identify people who are having difficulties to accept change, nature of resistance and deal them with empathy and support. They should be able to suspend judgment and to see the situation from another’s perspective, a process called active listening. During automation change leaders must identify people who have been resisting to change, if its their learning anxiety, they should try to do away with it by providing them counseling, training and assuring that they will not face any problem, this might involve citation of examples, stressing on their capabilities and skill. If the leader knows situations where that member had made significant contribution to organization, appreciating those contributions and energizing them would not only defy their resistance but will add another committed member in the team. This would help a lot when the resistance is at personal level due to age, anxiety to learn new things, health related issue.

Communication

Many times people sit with negative opinions about changes because they do not know why there is a need for change. What the change is trying to bring? What will be its consequences? Worley and Cummings argue that effective communication about changes and their likely results can reduce speculation and allay unfounded fears. Many times new ways of communication has to be invented. At NBL meetings with line managers, branch managers were held but not very regularly due to its large networks, the change leaders however visited few branches trying to assure people, telling them how computerized system would help them and how it will bring efficiency. Making presentations stressing the need for change, anticipated rise in efficiency would help tear away the network of ignorance.

Participation and involvement

One of the effective ways to deal with resistance is to involve organization members directly in planning and implementing change. Experienced members will not only participate in meetings, brainstorming sessions and presentations but will provide insights on forgotten and neglected issues. The change leaders at EPF recall that while designing changes it was the operational level staffs who brought in issues where others sight and thoughts never reached. When the members are participated in planning, their voices are heard, their issues addressed, they will be committed to implementing the changes because doing so will suit their interests and meet their needs. Moreover, for people having strong needs for involvement, the act of participation itself can be motivating, leading to greater effort to make the changes work.

Other strategies

Bargaining and negotiating

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Many leaders become so involved in the process of change that they become too committed and see everyone who opposes change as wrong, immoral people. They take change too personally and cannot tolerant the people who resist change. However in order to make change successful a leader must be ready for negotiations. The leaders of change should have their ZOPA (Zone of Possible Agreement) and BATNA (Best Alternative to Negotiated agreement).

Manipulating

Leaders sometimes should be manipulative to make their message appealing. This can be better done by highlighting the positive points but not stressing on negative impacts. Sometimes when the resistance is too high the negative impacts should rather be moved under the carpet to be dealt with later. Automation is usually followed by some layoff, transfers etc. leaders should not be too vocal about these issues and even when bitter things have to be spoken should stress on its positive aspects. At NBL when automation had started trimming had also been started which made the automation to be perceived as a double edged sword. Staffs observed it as something that would ultimately hit them back and opposed it. Management had introduced a golden hand shake scheme which at face value was lucrative than traditional retirement but management in many ways failed to stress on how golden hand shake was a good choice and it was not an option not a compulsion.

Coercing to comply

Coercion is the last remaining option for the leaders to deal with resistance. When all other options fail (support, negotiation, communication, participation etc.) management should even be ready to take disciplinary action to those who still oppose resistance. The coercion should be progressive in nature i.e. should begin with softer measures gradually becoming harsh. It might begin by warning, transfer, and demotion and even if these measures fail the resistors should be fired. I could not confirm if there was any coercion policy at NBL and EPF but staffs suggest that at both these organizations people who did not learn computer, made too many mistakes were transferred to departments/branches where work was still manual (hence time consuming and monotonous).

6.

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Evaluating ChangeChange is targeted to meet an objective or to reach a desired state. It is very important to evaluate change once milestones are met. Following are major steps in evaluating change

1. Identification of milestonesMilestones are intermediate goals. A change is assumed to have succeeded when all these milestones are met in time and they qualify to the standards. In software related automation milestone can be the development of process flow diagrams, software requirement specifications, Data flow diagram, Entity Relationship model, Use-Case diagram, functional module, testing, and manuals etc. can be some milestones.

2. Identifying the determinants of successThe determinants of success may be in terms of reliability, timing requirement, information quality, reporting standards, etc. These parameters have their own units for e.g. reliability can be number of data left unprocessed in batch reconciliation, time taken to process a loan, the number of information that can be extracted etc.

3. Measuring the parametersThe determinants identified in step 2 has be measured. A log book has to be prepared which will log number of errors reported in a batch call, time taken to process sample transactions etc.

4. Comparing the measured values with the benchmarks/standardsOnce the parameters are measured they should be compared with the predetermined standards or benchmarks to check for deviation. The tolerance level is also determined.

5. Take corrective actionUltimately when deviations outside the tolerance region are observed corrective action should be taken.

However new bugs have started to appear on daily basis. Quick fixes have complicated the system. No documentation of changes are made, response time is increasing, lack of source control brings out errors previously fixed. The database administrator keeps complaining he has no time to optimize database and to carry other operational activities because it is becoming too difficult to manage sessions. Users complain of sessions being dropped at the middle of the transaction, no controlling mechanisms are in place that allows user to commit mistakes many of which can have financial implication. Network administrator complains despite high bandwidth network, networks jamming become too frequent, many batch processing activities are carried out at users’ end. Computer Department thinks the maximum users that the CMS system can support has exceeded, addition of new operations have degraded efficiency. User committee meetings are becoming debate more than a meeting where arguments and counter arguments heat the scene to the extent that managers frequently involve in a kind of tug-of-war.Few members argue time has come for EPF to move into another system, a light yet highly flexible web-

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based system but one of the most influential and powerful person is completely against it. No estimation of CMS life was done another set of people argue. When CMS was being built future requirements were completely ignored, simplest of changes in operational activities has become difficult to implement in CMS making it inflexible. The change team at the time of CMS development and implementation knows how many clients the CMS system can support. It has only been five years CMS system has been implemented. Computer Department is too much under intervention of the influential person cited above. In a meeting Computer Department decides to convert the main modules (the “online module”) into a web-based system, information leaks overnight into the influential system and by the time next meeting takes place the former decision would have been scrapped.Computer Department has a leadership related crisis and everyone in the management knows this but no action has been taken so far.

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Conclusion and RecommendationsWhile conducting the basic study on automation at both NBL and EPF the basics of change management was found to be missing. Either the leaders/management didn’t see the need for unfreezing or they didn’t know about unfreezing. In the context of NBL, the employees couldn’t identify anyone as change leader. However at EPF everyone knew who the change leader was. Unfortunately in both these organizations no long term vision was developed. Implementation seems to have been successful in these organizations but same cannot be said about the entire change process. IT based automation has shorter life because inability to follow the emerging technology hinders organizational development at large. In many organizations in our country even preliminary study seems to be incomplete and with lot of loop-holes. In today’s context while EPF cannot decide the direction for CMS though it is fast moving toward obsoletion, while at NBL they have already started replacing Newton but again not as a strategic move.

Many leaders of automation are too focused on technology that they forget the people side of the process. They forget that best of the technology fails without support from people. In Nepal’s context change is still something that is pushed down the throat of people. Many leaders seem to be unaware of their own organization’s context and the realities.

Majority of staffs in government and semi-government organizations have served for long tenure and they have been habituated to one way of doing work. In these scenarios when automation is carried out problems will only increase. Great efforts should be given to unfreeze people, bring readiness for change in organization.

There is one fatal problem in our organizational leadership. Leaders become too possessive about change. They become the biggest resistance themselves when the change they brought in needs to be replaced. In many organizations leaders continue to serve in the same department where automation was targeted in better and bigger capacity. With time the automation they carried out moves toward obsoletion but they are dead bent against the replacement and the entire organization suffers. Leaders who lead change should be given opportunities to serve in other areas of organization may be in areas where change is needed.

Change should not only be a single person’s brainchild, it should be organizational process assets. Seeking ideas from others is a must as it gives opportunities for improvement. Suggestions and feedbacks from all level of staffs should be considered. In our organizations leaders are apprehensive about criticisms especially if it comes from lower level. Participative management is still a practice that organizational leaders in our country read only in books, that is not their style of management. During my study I could get references to organizational experiences where people were transferred, warned and even “forced to retire” just because they had difference of opinions. Failing to seek others idea and insights has lead to complex process structure, unnecessary bureaucracy, wastage of resources in many organizations (people have ample example of this at EPF).

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Automation is probably the best time for an organization to reengineer its business processes. However organizations want to automate exactly the way manual process is carried out. They are too afraid to give up time-consuming and irrelevant traditions.

Explicitly during automation system analysis should be given special care, however people tend to move faster toward development. Testing process is given little consideration and user acceptance test is something that is thought to be not required.

Trainings are not planned. There are no mechanisms to test the effectiveness of a training program. People said trainers were boring and they seemed to be confused what they were saying. Trainers are often unaware what the participants are supposed to learn/know after the training. Trainings are only ritual.

Automation process should be documented. While technical documents will record technical specifications, internal structure, working principles, user manuals let user learn to use system on their own or to reinforce what they learn in trainings. At NBL user manual is well documented while at EPF there is no manual at all. Errors are encountered in many cases just because people have forgotten how to work on it.

To sum up there are following major recommendations

Recommendations to organizations Develop culture that embraces change Foster participation in decision making Provide resources to change

Recommendations to leaders Be ready to change yourself when time requires Accept the need for unfreezing Participate people from the very beginning Show commitment to change Do not be too possessive about change/ be prepared the change you led needs to be changed

someday Communicate the need for change/progress of change/results Be receptive to feedbacks/criticisms Give up the attitude “I know everything and what I think is always right” Design training and its evaluation

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ReferencesBooks, articles and journals

Organizational Development and Change, Thomas G. Cummings and C.G. Worley

Organizational Theory and Design, Richard L. Deft

Modeling the IT-Infrastructure of Inter-Organizational Processes – Automation vs. FlexibilityJudith Gebauer (gebauer@haas.berkeley.edu)The Fisher Center for Management and Information TechnologyWalter A. Haas School of BusinessUniversity of California, Berkeley

Reengineering the corporation: A Manifesto for business revolutionMichael Hammer & James Champy

How to Structure Difficult-to-Automate Business ProcessesPhilip Kisloff

Building Successful Teams in the Midst of Transition by: Thomas W. McKee

Decoding Resistance to Change, Jeffrey D. Ford, Laurie W. Ford, HBR April 2009

Growing Pains: Recognizing and Assessing the Need for Organizational Change Eric Flamholtz, Ph.D.

Facilitating organizational change: a test of leadership strategiesDaniel T. Holt, Dennis R. Self, Alfred E. Thal, Steven W. Lo

Going Through the Motions: An Empirical Test of Management Involvement in Process ImprovementAnita L. Tucker, Sara J. Singer

Resistance to change: A literature review and empirical studyPardo del Val, Manuela & Martínez Fuentes, Clara

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Websites

http://www.allbusiness.com/human-resources/workforce-management-hiring/3779209-1.htmlhttp://www.12manage.com/methods_change_management_iceberg.htmlhttp://www.uv.es/~pardoman/resistencias.PDFhttp://sloanreview.mit.edu/the-magazine/articles/2005/summer/46410/the-art-of-making-change-initiatives-stick/http://tdworld.com/mag/power_organizational_change_management/http://rapidbi.com/management/kurt-lewin-three-step-change-theory/http://entrepreneurs.about.com/cs/beyondstartup/a/uc070903.htmhttp://www.telusplanet.net/public/pdcoutts/leadership/Kotter.htmhttp://books.google.com/books?id=2Sof1el_a6gC&pg=PA116&dq=ADKAR&ei=Ep3BS6zhJ6q2zQSK46T3AQ&cd=4#v=onepage&q=ADKAR&f=false

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AcronymsBATNA: Best Alternative to Negotiated Agreement

BPM: Business Process Management

BPR: Business Process Re-engineering

CMS: Contribution Management System

EPF: Employees’ Provident Fund (Nepal)

IBM: International Business Machine

ICMT: ICC Management Team

ICC:

IT: Information Technology

NBL: Nepal Bank Limited

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