Yesterday, I was asked by my best friend who is a well-known CEO of a a well-known international mineral company about the above mentioned subject and the following was my answer to him through a BBM (Blackberry Messenger):
There are basically two school of thoughts on change, Theory E and Theory O
- Theory E is basically using economic value as the basis. So, in this case it’s basically the shareholders value is the yardstick. This is actually the hard approach of change management where it’s quite tough for the leaders to pursue as everything is based on numbers. If you don’t deliver the numbers and achieve target then you are fired.
- Theory O is basically using a softer approach ie building organizational capability through creating culture. This is easier done than the theory E because you talk with a single mind root-cause or logical thinking: if we develop our organization very well then we will succeed economically.
Which one is the best? Combine! The two things must be balanced in such a way that there is good intention from the company to develop the benchstrengths of the people as well as organizational capabilities: structure, process, culture. But … at the end you will be measured as well in economic terms because business recognizes money not talented people. Of course talented people are expected to deliver the numbers (economic value).
Ho to make them change?
- Create a sense of urgency that as business the company must deliver the numbers – economic value that all can not deny. That’s the reason of our being until now because we create value through delivering our products to the market.
- Make them aware that every single day is a value-creating activity otherwise we cannot survive in life. Consider if this company is shutdown so that it does not produce, how can we earn our life? Can we survive? Maybe …But not with this plant anymore … The question is then can we do it?
- Create desire to become the actor (and NOT the victim) of value-creation process and keep developing themselves to become as proficient as possible worker so that they keep creating value for the company as well as themselves. The future must be “crafted” and “nurtured” by them and if necessary propose ideas of personal development to the company – not waiting for to be developed. Don’t let your life be ruled by your boss.