Celerant: Economic Crisis Can Be Catalyst for Change

Dollar Pull You can count effective organizational change as one of the positives to come from the economic turmoil of the last 18 months. More than two-thirds of senior executives say the current global economic crisis was a catalyst for driving change across organizations, according to a recent global survey released by Celerant Consulting and the Economist Intelligence Unit.

“The crises of last year, and particularly the collapse of Lehman Brothers, was a trigger point. We saw it with all of our clients no matter what sector they were in. We saw some clients actually embrace it,” says Bill Hendrickson, executive vice president of Celerant Consulting. “There was no question that this time around people weren’t fighting the change. It was all about saving jobs and survival. Those things get people’s attention.”

The survey—The Burning Platform: How Companies are Managing Change in a Recession—asked 561 senior executives in Europe and the United States about change management at their company.

“Clients that had been trying for quite some time to get their people to embrace change had, all of a sudden, a real burning platform,” he says. “It wasn’t just coming from the top, people felt it for real. This time, when executives said they needed to launch a change program, people listened.”

Smart companies took advantage of the crisis to make change happen, Hendrickson says. But really smart companies move fast “but do it systematically and make sure those changes are sustainable over the long haul,” he says. “There is a danger, however, that firms are using the crisis to launch change initiatives too rapidly, with too heavy a focus on short-term objectives.”

This is the second time Celerant and the Economist Intelligence Unit conducted the survey. The first was in early 2008 before the economy collapsed. One of the key finding of the survey this time around, Hendrickson says, is the increased focus on keeping to budgets and timelines of projects. In the first survey, budgets and timelines ranked ninth in terms of project importance. This time, it moved all the way up to second. “That really surprised me,” he says. “You can’t drag out these change programs, especially not now. Clients need results, and they need these programs to deliver.”

Another surprising result, he says, is that 71 percent of respondents say that their companies are dealing with the changes resulting from the financial and economic crisis, “reasonably well,” while 8 percent believe that their firms are dealing with the impact of the crisis “extremely well.”

“Too me, that seems a little high,” Hendrickson says. “I guess it boils down to their own interpretation of success. Some may think that since they’re still in business that they have succeeded. But many of them might have made massive cuts just to keep the lights on.”

But some findings were consistent year over year. The most difficult part of any change management program remains winning hearts and minds.
Programs fail “when they are viewed as flavor of the month and not tied to the strategy. People need to know why it’s happening and how they are going to be part of it,” he says.

—Joseph Kornik

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