VERITAS

Published on: 12 May 2020

Corporate Transitions during CoViD-19

The pneumatic pandemic CoViD-19 has caused a lot of damage to the economy by disrupting the global supply chain of products and services. Many firms, especially in the field of Information Technology, have been forced to restructure their organizations in compliance with the latest WHO & CDC guidelines.

Because the spread of this pandemic has been so swift and unprecedented, many companies did not get a chance to brace themselves for the impact and had to dive head first into the turbulent sea.

Many employees are surprised to find themselves working from home in order to socially distance themselves from other individuals and potential vectors to contain the virus.

This has led to a drastic void between employee potential and employee productivity in a time as crucial as this.

However, it is never too late to acknowledge this and take necessary actions.

An overview of Business-Market Fit & Lewin's 3 stage model is much warranted to understand the steps a business can take to reassess its organizational structure to optimally utilize its resources and to achieve its goals.

Business-Market Fit

Business-Market represents a spectrum between the dichotomy of the
a) business' ability to mobilize its supply chain and
b) needs of the market as a whole.

It is important to understand the relevance of this model as it helps the management to objectively understand the needs of the market and the firm's own shortcomings. The three main influencers to this spectrum are
a) market externalities,
b) business needs &
c) business-market realities.

It is to be noted that all three influencers include multiple variables that affect the Business-Market Fit.

Externalities in this context would be the CoViD-19 pandemic, an epitome of market externalities or external turbulences. The effect it had on the global economy is a quintessential example of the vulnerability of existing systems to alien, outside, unknown threats.

Business needs would be the sum of an organization's goals, strategy & resources to achieve those goals etc. These include the requirements of a firm to function efficiently in a non-turbulent environment. These functional needs are essential for a firm to survive in a competitive free market.

Business-Market Realities is much broader when compared to the prior two concepts. This would include the realistic abilities of the organization to acquire, manage and utilize resources in an environment affected by externalities, i.e. CoViD-19.

To better analyze this, it is essential to map out the effects of the turbulences in the market to see if they pose a threat or an opportunity to the business & How can the firm avert or exploit it?

After the assessment of Business-Market Fit, especially in times of crisis like the Coronavirus pandemic, businesses can prioritize their needs to lay the foundation for an effective plan of action or a Contingency Plan. However, to complete this plan, merely a market focused perspective isn't enough. A realistic analysis of the workforce needs to be conducted in order to map out how the transition process will take place and how relevant changes will be implemented within the organization. To understand this, we need to move on to Kurt Lewin‘s 3 stage change model.

3 Stage Change Model

Kurt Lewin is known as one of the modern pioneers of Social and Organizational Psychology. Kurt Lewin's three stage model of change is also referred to as Unfreeze, Change, Refreeze. This theory can be used to analyze the changes that most firms will have to implement in the future after their restructuring post the CoViD-19 turmoil.

This model can be used to study an organization in an in-depth level but it is not necessary. Lewin's Three Stage model is criticized for being too simplistic in nature as it is merely a tool to help managers to implement necessary changes.

The world has changed a lot ever since this model was introduced by Kurt Lewin in 1947, when the nature and the way business was conducted was very different. But, the Three Stage model remains extremely relevant. Numerous modern change models are at its core, based on the Lewin model.

Stage 1: Unfreezing

The first stage is probably the most important stages to understand in the dynamic world we live in currently. This stage talks about getting the circumstances suitable for change. This involves understanding that change is necessary and cannot be avoided. It is crucial to understand that it is essential to adapt to the changing environment. This will motivate the actors to accept change when it is proposed to them.

The employees are informed about the current scenario, why it is detrimental for the firm and the employees, what are the alternatives available to the company and how they will benefit the firm and the employee. This will get the employees in a mindset to accept the change and adapt to the new environment.

In this stage, firms must be realistic with their employees. Hiding obvious inevitabilities from staff only worsens the situation for the organization in times of a crisis. Such practices only cause 'trust issues' between the staff and management, making the employees more cynical to change.

The firm must make the employees understand how the externalities are going to affect the employees. Such sensitive conversations should be grounded in reality because overstating the need to change may cause the employee to see through the façade, bringing the organization back to square one.

After clearing out the gravity of the situation to the employees, the management should put forward the changes that are to be implemented within the organization to tackle said externality of CoViD-19. Emphasize on why those changes are necessary and how they will have a positive effect on the employees. To understand this properly, we need to focus on ‘Force Field Analysis’.

Force Field Analysis

Unfreezing is mostly about creating a balance between restraining forces to change and the driving forces to change. The Force Field analysis mainly includes the following steps. First, the manager must study the restraining or driving forces that will influence the transition to the desired state – restraining forces are the reactions of those actors who see the transition as 'unnecessary' or as a 'threat'. Then he must assess driving or restraining change forces and decide which ones are critical and require attention. Finally, he must take the required actions to increase the critical driving forces and decrease the critical restraining forces to overwhelm them.

Force Field Analysis is a way to observe and study the various diverse factors (forces) for and against transitioning to a desired state that a manager needs to be aware of and analyze to make the circumstances suitable for making the required adjustments and changes. If the drivers for change outweigh the resistors to change, then it will be easier for the manager to implement the required changes. If the resistors to change outweigh the drivers for change, there will be a lack of motivation to leave comfort zones and accept changes.

The restraining force in this case would be the prospect of salary cuts, forced leaves and layoffs in some unfortunate cases.

The driving forces would be increasing pressure from the external environment, i.e. Health & Safety consequences of CoViD-19, Government Orders and Mandates for compliance during this pandemic, Financial repercussions of low demand due to quarantines and lockdowns.

Kurt Lewin's Force field model is a good way to analyze the Unfreezing process. This process is about moving towards motivation for change by reducing resistor to change and increasing the drivers for change.

Stage 2: Change or Transition

Kurt Lewin emphasizes on the fact that change is not an event or a single occurrence, but its rather a process. He calls this process "transition".

Transition is a movement or journey we make towards a better state as a reaction to a change or proactive if the change is anticipated early. This second stage takes place as the manager makes the changes that are needed to adapt to change. People are 'unfrozen' from the first stage and are capable of moving towards a new state of being. This stage focuses on the solutions that can help the firm transition to new ways of operating. This begins with finding new and innovative approaches to solve problems that the firm is facing. In this stage, Goals and targets are set for the organization to achieve. Smaller, acceptable changes are instituted to make sure that they reinforce and support the changes that are implemented. Management structures are developed to tackle the different hurdles that the firm might face during the transition process. The manager must maintain an open, two-way communication style (dialogue) to ensure that the changes implemented actually affect the area of attention and if there is any alteration required to the changes.

In this stage, companies will re-evaluate it's needs and priorities to make relevant changes to their business process in order to tackle the ongoing pandemic. The contingency plan should take all stakeholders into consideration. However, any firm should prioritize their own business and interests first, and that might involve taking some difficult decisions.

Proactivity, wherever possible, is absolutely necessary to respond to business emergencies like this. Reactivity limits the courses of action available to a firm. Management needs to analyze the environment to foresee changes that might occur in the future, to ensure appropriate preparedness. Proactivity is rarely a futile exercise.

It is essential that all the stake holders participate in this process. Especially, those impacted by the change. Support system is crucial in this process and can be provided in the form of training, coaching, and expecting mistakes that might occur as part of the transition process.

Stage 3: Freezing

Kurt Lewin refers to this stage as freezing as it deals with cementing the necessary changes that were implemented and to make sure that the organization does not revert to their previous ways of doing things. The third stage is about establishing stability in the firm once the changes have been implemented. The changes are accepted by everyone and become the new norm in the company. Employees form new relationships and become comfortable with the changes and their new routines. This can be a time-consuming process. This involves the changes being integrated into standard operating procedures.

This is the final stage where companies should take regular feedbacks from their employees and stakeholders to ensure that they're appropriately settled in the new environment. It should be noted that it is impossible to kill cynicism entirely and bring everyone on the same page with a single contingency plan. Managers need to conduct a thorough follow up with the employees to address any grievance that might occur due to changes in the business process. It is important to identify and focus on the employees finding it difficult to transition to the new environment as they can potentially cause disruption amongst the workforce. A robust grievance and feedback system preemptively acknowledge and address this issue. Management also needs to realize that errors and mistakes will be a common occurrence, especially in the beginning, as the employees try to adjust to their new surroundings and regain their usual productivity.

Conclusion

Having a clear internal and external perspective is absolutely essential to appropriately respond to any crisis. Not doing so would lead businesses to the very shaky grounds of uncertainty, trial & error. Companies need to limit uncertainties by understanding and getting a grasp on their external environment as well as the environment within their own organization.


by
Aditya Joshi
Human Resources Executive