Diversity FAQ’s No 19: How is Diversity connected to Business Strategy? Part II – ‘Change and Downsizing’

Change in organisations is inevitable

Charles Handy, author, philosopher and specialist in organisational management and behaviour.

It seems pertinent that in pursing Part II of our discussions on how diversity is connected to business strategy, that we spend some time discussing the phenomena of ‘change’, a reality of business strategy, more so within the context of organisational change and downsizing – a very present reality in the UK workplace.  Indeed, the global world of business, precipitated by the fall of Lehman Brothers on September 16th, 2008, is arguably the spark that commenced the beginning of what we now understand as the global financial crisis, which played itself out before our eyes as organisations either folded or embarked on restructuring processes.

As of early 2009, organisations were still reeling from the effects: the Daily Mail reported that in the UK,100,000 people a month were made redundant, that a job was being lost every second, and that a typical organisation like MacDonald’s, for example, was receiving approximately 22,000 job applications per day. Indeed, figures from the Office for National Statistics (the ONS) showed that 302,000 people were made redundant in the three months to April 2009 – that is 36,000 more than in the previous quarter and the most since records began in 1995.

Indeed, coming closer ‘home’ – and as of the second quarter of 2011, 56% of the public sector and 29% of the private sector had made redundancies according to a recent KPMG survey, with further downsizing and restructuring predicted.

But when we talk about ‘change’, ‘downsizing’ and ‘restructuring’, what or who are we, in fact, actually referring to?? What is changing? Who or what is being downsized and restructured? Being able to answer these questions, and importantly, understand the reasons for the answers provided, is key to further understanding the fundamental connection between diversity and business strategy.

Charles Handy is absolutely right – change in organisations is in fact an inevitability. It is not so much a question of ‘why’ it happens, but one of expectation as to ‘when’ it will happen. Indeed, the Lehman Brothers example referred to above, though a landmark event in the world of business, viewed from this particular understanding, is in fact ‘accidental’ in the sequence of inevitable change events that organisations should expect. Why is this you may ask?

Whilst visiting my parents last week, my Dad gave me a picture of myself taken literally a few minutes after I had just been born! A ‘cradle picture’ he called it, one that I actually had never seen before. I looked at me as a 6.5 pound baby and thought to myself, how I have changed compared to the ‘man’ that I am now.

Organisational change is symptomatic and indeed only representative of the phenomenon of change that characterises us as different individuals (employees and/or customers) who themselves naturally go through a process of change and development, be that physical, psycho-social, ideological, ethical or otherwise – all of which have a direct impact on the organisation, its ‘behaviour’, overall design, and indeed its strategic change and restructuring prospects – in accord with meeting diverse customer need: It is in fact our diversity that drives change and indeed is able to thrive on it – positively…

The simple point being made here is that change in organisations is a direct derivative of change in people – customer and/or employees – a change driven by people differences and their diverse needs. Indeed, a study by the Cranfield School of Management found that organisations in the western economies face significant degrees of change due to a multitude of factors including technological advancement, competition and importantly, a fast paced, highly pressurised customer driven market to provide high quality goods and services at competitive prices in accord with specific need.

Bearing the above in mind, here’s the question to ask: How often are people’s diverse needs actually taken into account when designing and deploying a strategy in response to change? Do we consider that in order to positively manage change when it happens, that we need to initially ‘understand’ the ‘indices’ of change around us – people (employees, customers, etc)? Are diversity requirements really considered? What really drives change in organisations – bottom-line desirabilities or an engrained customer focus? Which often tends to come first?

I suggest it should be the customer. For it is in fact the customer (otherwise called ‘the human person’) who initially precipitates change  through the choices they make regarding goods and services. Indeed, the Chartered Institute of Personnel Development, (CIPD), suggests that though organisations are typically expected to go through a major period of change, every 3 years, over 40% fail to meet the set target objectives driving the change in the first place, such that they often have to re-engage the process again – prematurely, thus hemorrhaging vast amounts of money in the process. The reason cited, is the fact that people or the ‘downsized’ or ‘restructured’, neither have their needs met, nor are they supported prior, during or post the change process, such that the ‘newly emerged’ organisation typically has immediate critical challenges to manage including; employee re-engagement, reduced commitment to the ‘psychological contract’ and strategic vision of the ‘new’ organisation, talent retention and redeployment issues, and importantly, has to deal with the deep sense of unfairness arising out of the initial lack of consultation on the process deployed during the restructure.

Change is inevitable in organisations, but how ought we to effectively deal with it?

All business strategies must begin with the individual and proactively respond to the following initial questions as prerequisite to embarking on a change process:

  • Who are the individuals being impacted?
  • What circumstances do they have to deal with on a daily basis?
  • What particular skills and talents do they uniquely possess?
  • What challenges and issues do they face?
  • Why and how they will be impacted by the process?
  • What process can we develop to ensure we have taken note of all their views?

Responding to the questions above ensures that the change process adopted is a truly viable one, fit for purpose and as a consequence, geared toward improving the bottom-line of a business. This ought to be the fundamental point of departure for any change process, and where it is not employed, constitutes a fallacy in overall business strategy, arising from its lack of paying due regard to the human person – the key driver of change – and the ‘common denominator’ connecting diversity to business strategy.

NB: Look out for the next article due toward the end of the month entitled: “Is there a place for diversity professionals in the ’21st century’ organisation?”

Please also note that our discourse will take a temporary lull over the next couple of weeks or so as I am taking a short holiday abroad!… but will respond to your comments via my new HTC Sensation! – even diversity needs a little break!


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2 responses to “Diversity FAQ’s No 19: How is Diversity connected to Business Strategy? Part II – ‘Change and Downsizing’

  1. Mark rosegreen

    Very good article Jude!! I’m impressed! Really strong analogies and poignant reflections. Looking forward to your next article about diversity professionals in 21st century organisations…..should be an interesting read!!

    Mark Rosegreen

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