MANAGING
CHANGE ACROSS BORDERS
This article has been excerpted from a book
by
OBSTACLES TO CHANGE
One form of resistance that many global initiatives meet is simply inaction. Overseas operations are insulated by the same barriers that make communication with them so challenging. Distant subsidiaries, affiliates, or partners are less immediately visible to top executives at headquarters, who naturally tend to give them less attention than the pressing demands of home market customers or employees. The Chinese saying, "Heaven is high and the Emperor is far away," also applies to many corporations. Local employees frequently take matters into their own hands, implementing, modifying, or ignoring headquarters initiatives as they see fit.
Another reason for not implementing a change agenda is the global version of the "flavor of the month" phenomenon that occurs in companies whose transformation efforts lack consistency. Frequent turnover among key corporate leaders or expatriates often results in flip-flops between different global market strategies, leaving overseas employees weary because they must educate yet another aggressive crop of executives regarding what does or does not work in their country environments. Veteran subsidiary employees will say things such as, "The first six months it is best to ignore them because they don't know what they are doing yet."
Yet another brand of failed change efforts falls under the rubric of "The Living Dead," those multiple layers of half-hearted, overlapping, and contradictory initiatives that employees make a show of doing whenever their foreign bosses appear. Overt compliance for a time with changes imposed from abroad can mask stored up resentment that finally explodes in emotional conflicts, employee departures, and so on.
The Foreign Capital Company Syndrome
Perhaps the most common pitfall for cross-border change efforts could be labeled as the "Foreign Capital Company Syndrome," a negative cycle of misunderstanding and misguided efforts.
HQ Imperatives: Well-intentioned "global" initiatives are rolled out from company headquarters
Limited Local Capabilities: These initiatives often encounter limited local capabilities due to fewer human and financial resources within smaller and less mature subsidiary operations.
Strong Pressure: There is strong verbal pressure from headquarters or its expatriate representatives to cooperate and to get in step with the global program.
"Irrational" Opposition: Opposing views from subsidiary employees often appear irrational due to the lack of language skills or an inability to make what headquarters would regard as a strong business case.
Forceful Decisions: These local views are therefore ultimately brushed aside in favor of forceful directives to go ahead as planned.
Covert Resistance: Under such circumstances, even those local employees who struggle to comply act without gusto. Many harbor the quiet hope that the headquarters initiative will fall on its face because their own views have been disregarded and overridden.
Frustration & Confrontation: Frustrated headquarters representatives ultimately sniff out this lack of whole-hearted commitment or compliance and confront local employees.
Resignation & Withdrawal: These employees, who are in no position to offer effective resistance, resign themselves to following instructions, and are less inclined to offer their own frank views next time around (there may be those who literally resign from the organization as well).
Stalemate: This unproductive stalemate naturally leads to poor business results that can become the impetus for the next major initiative from headquarters thus repeating the cycle.
The figure below provides a visual representation of the cycle. These are the standard symptoms of a dysfunctional partnership:
It is possible to arrest the cycle at any point, but this is particularly difficult in the case of cross-border transactions. The overlapping obstacles of time, distance, unfamiliar business practices, wishful thinking, and organizational inertia all contribute to the difficulty. Companies must make a concerted effort to develop a full menu of global people skills that will enable them to reverse the descent into this hellish and costly cycle.
CROSS-BORDER CHANGE MANAGEMENT: RECOMMENDATIONS
Change management is a complex skill that builds upon but also goes beyond more basic intercultural communication or teamwork skills. The fundamental problem is often that change is being rammed down the throats of employees in other countries without their buy-in. Under these circumstances, the negative "syndrome" of fruitless discussions, imposed change, and covert resistance described above quickly begins to take shape.
What is required for cross-border change efforts to succeed is a change process that starts with at least some degree of input and informed consent from key employees at every location where the change is being introduced. And such initial agreement is just one step along the way to building a true partnership for change that makes it possible for executives and employees at each global location to finally assume ownership.
Ten Steps for Handling Change
Change initiatives come in many shapes and sizes. Here is a general set of ten steps for introducing change across borders that has worked well in various settings:
1. Create a project team that includes strong local leadership.
This builds a sense of accountability from the start of the project. Too many change initiatives founder because they are already partly or fully formed before overseas employees even hear about them. In the optimal situation, leaders from sites where the project will be implemented should have a role in shaping the original content and direction of the change effort.
2. Review the current systems that are in place in the host country organization and identify positive elements that can and should be preserved.
Another goal is to acknowledge and preserve local strengths. If these are ignored, defensive mechanisms kick in as employees try to preserve aspects of their current operation that they value and have worked hard to create. On the other hand, when a local practice that is a point of pride can be incorporated and perhaps expanded upon, it becomes a powerful source of support and enthusiasm among participants.
3. Carry out a needs assessment among key local stakeholders; include internal and external customer groups in the planning process.
Broadening the number of people involved makes the change process more complicated, but it is the best way to create a base of support that goes beyond the planning team, as well as greater long-run commitment to implementing the new system.
4. Benchmark local and overseas models, including parent company systems.
Taking the team outside of the company to look at what other organizations are doing helps to give employees new points of reference. It is as valuable for engendering more flexible thinking on the part of planning team members as it is for obtaining specific "best practices" or implementation ideas. Often other local firms are implementing a surprising number of changes that employees will regard as a more meaningful precedent than anything that is happening abroad. Having such information also enables them to go back and convince their peers that change is indeed warranted. Depending upon the nature of the initiative, positioning headquarters practices as a point of reference rather than an obligatory template often makes the change process easier to swallow.
5. Analyze related organizational systems to identify opportunities to reinforce primary objectives.
This is a good organization development principle that applies in global contexts as well as domestic ones. If a new process or system can be integrated with or supported by other systems - e.g., objective-setting, budget planning, measuring business results, hiring, job rotation, compensation - the chances are better that it will not be rejected by the immune system of the receiving organization.
6. Plan the new process or system together.
Changes must be planned in a way that includes both knowledge of new practices and knowledge of the local business setting. However attractive the best practices of other firms might be, program elements have to be combined in such a way that a real fit with the existing subsidiary environment is achieved. Involvement in the planning process brings other benefits as well. Employees may willingly adopt more from the parent company and be more determined to implement it if they feel they have a choice in the matter.
7. Hold periodic meetings with the local executive team and other stakeholders to report progress and to gain support for next steps.
Keeping important stakeholders informed continues to broaden the base of support and ensures that there are no negative surprises. Along the way this can create a wave of support for the change effort so that it becomes a familiar and inevitable part of the local landscape rather than an imposition from abroad.
8. Use pilot programs to introduce the change; review and revise based on pilot program results.
It is wise to inoculate everyone involved from the beginning with the idea that there will be problems and temporary setbacks along the way. Pilot programs engage local talent in improving and adapting rather than criticizing and resisting; they also reduce the risk of failure by containing initial problems within the boundaries of the experiment.
9. Hand off responsibilities through a step-by-step process to a local team for ongoing implementation.
Some continuing involvement from overseas personnel may be necessary, but real change is more likely when committed local employees assume the tasks involved in driving it home. There is a new level of responsibility and capability that comes from figuring out what to do and carrying it out rather than doing what you are told. Transferring tasks step by step ensures that the employees who are taking on different roles have the confidence and the skills to fulfill them.
10. Use people and lessons learned from previous change efforts to jump-start new projects.
Turning members of a previous planning team into change agents for the next initiative enables people to complete the journey from skeptic to advocate. A local employee who can point to a track record of success and ask his or her counterparts to cooperate in the next change initiative will usually be far more convincing than anyone from headquarters.
This list represents an ideal process, and not all of the steps are necessary or advisable with every change effort. Frequently there are limitations ——real or imagined——of time, resources, or personnel. The dictum, 'start slow, finish fast,' applies to most global change initiatives, with 'fast start, slow and agonizing failure' being a common alternative. Global project leaders who get off to a fast start are often doomed to spend many long hours spinning their wheels, generating unnecessary resentment among their counterparts, and failing to accomplish their goals. They need to back up and get the right fundamentals in place first instead of plunging eagerly ahead.
This material is provided
through a collaborative arrangement between Diversity Resources, Inc. and Meridian
Associates. Meridian Associates provides
a blended solution of web tools and services to help customers leverage crucial
knowledge and build key skills for working globally. The material above comes from Meridian
Associates’ GlobeSmart'.
GlobeSmart'
is an online tool that provides in-depth information about business practices
in 36 countries, tips on evaluating people in each country, and a
self-assessment tool that enables a comparison between one's own cultural
profile and that of another country using a number of the dimensions. For more information about GlobeSmart, go to http://www.meridianglobal.com
.
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