Tsunami Change

We all know that change is a fact of life. Nothing seems to remain constant. Yet the Scriptures remind us that "... there is nothing new under the sun" in the first chapter of Ecclesiastes. What seems to change is the packaging and the intensity.

In my understanding of organization behavior, there are three kinds of change: (1) Evolutionary, (2) Revolutionary, and (3) Planned Change. The first is associated with continuous improvement and the third with transformational initiatives. The second is associated with structural change (albeit it might very well be planned).

Why? Structural changes more often than not can have an immediate impact on the status quo. By structural change I do not mean "bird-cage" reorganizations where all the "birds" fly up and settle in different perches. They change who is on top and who is not, but often do not change performance. They change who is on the giving and who is on the receiving side.

The tactics we use for each type of change are varied. Some are power-coersive while others rational-empirical. This subject is for another blog.

A professional friend, Victor Pineiro, wrote a book several years ago on the tsunami type of change he experienced as a consultant-participant in his native Caribean country Curacao. Victor revised his book a few years ago after the tsunami triggered tragedy in South East Asia. A worthwhile reading! I learned much from his book and from his insights.

Recently, I have been tracking and observing a tsunami-type of change in a multi-national organization. A tsunami has a way of surprising you. There is little or no advance warning when it might strike.

In this case study, the tsunami was triggered by the lack of alignment between the CEO and two major shareholders. The CEO was keen on growing the company aggressively to global status while the major shareholders were more keen on squeezing shareholders' value. So when an opportunity surfaced to sell some of the company operations at a very handsome profit, the difference could not be resolved. Shoving became pushing, and soon the CEO was out.

This started a major tsunami.

Several executives were summarily dismissed. New executives were brought in with ideas more closely aligned with the major shareholders' vision. The short-term profit motive trumped the long-term growth potential. The squabble also surfaced many issues with the aggressive growth strategy of the previous regime. Many executives had reached their Peters' Principle (their position exceeded their level of competence). Under the guise of a family culture, many interpersonal scores were unsettled. People were selected for promotion based on nationality, friendships, culture alignment, seniority, etc. rather than competence or results. Growth had generated excess by some of the top folks too. Profitability, it seems, often hides many managerial weaknesses. The Emperor has no clothes!

Needless to say, the toll was high. Many individuals in lower level positions lost their job as fat was eliminated and/or as a more decentralized style of management began to emerge.

Organizational tsunamis can be deadly.

If you are in a corporate job, you are the most vulnerable. High ground (operations) is a safer place. Like animals in the wild, some individuals can sense it coming before it strikes, and they immediately proceed to higher ground (operations) or leave the company altogether (resign).

It takes years for the employee relations climate to recover. The very fiber of the organization is shaken to its roots. Established relationships collapse. A sense of vulnerability permeates the corporate community. The focus is survival -- the ability to survive another day, the hope for a good "package", the longing for the good old days. The organization goes into shock. Depending on its size, it might take years to recover. Some never do. A few use the experience to their advantage, and do not repeat their mistakes.

How about you? Have you have seen or experienced such a change? What did you do? What did you learn?

I am one of those animals that, more often than not, can smell it coming and I have always left the island before the tsunami strikes. How do I smell it? Hard to say. But I start to pick up changes in the language and behavior of the CEO, and his/her shift from the long to the short term. I start to listen to the major constituencies as they start to murmur.

Murmuring is an early warning system, I have learned. Murmuring is a special way of communicating disagreement, admiration, contempt, or other feeling we are afraid to verbalize. Often, it is not a postive sign.

Tsunami often seems to be triggered by internal forces -- infighting, politics, lack of a common vision, arrogance, intrigue. It can also be triggered by market forces.

I would love to hear your reactions to this subject.