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 Advance Praise

Indian wisdom and value systems are one of the most amazing
and fascinating strong foundations of knowledge. It’s really
commendable to see that Eastern thoughts are blended in this
book, which facilitate the integration of knowledge, application,
experience and practice on the Indian corporate playing field. This
book is going to be one of the very interesting collections for any
student, learner, practitioner, thought leader or even for researchers
for any kind of reference at any point of time in their life. I wish
the authors great success with this book. I see the practical use of
this book in my own research as a really handy guide, whenever
I look for management of change.

Dr Rajeshwari Narendran, Professor, ML Sukhadia University

and Director, Academy of HRD, Ahmedabad, Ex-President, ISTD

It was delightful to read the book Alchemy of Change: Managing

Transition through Value-based Leadership. Both the authors, Dr H. N.
Arora and Rajan Sinha, are scholarly practitioners. They bring in
the text their deep insights to explain various issues pertaining to
organizational change. Their deep familiarity with Indian spiritual
traditions and value systems has been brought to good use. This
can be of considerable value to Indian scholars and those in other
countries. Their ‘Indian Model for Driving Change’ is a valuable
addition and can be useful for researchers and practitioners. The
model has the potential of expanding itself into a larger treatise.
The simple and lucid style of writing makes the reader enjoy the
text. It is a unique combination of information and wisdom.

D. M. Pestonjee, Chair Professor, School of Petroleum Management,

PDPU, Gandhinagar and Ex-Professor, IIMA
Rare book on change management where the authors have
shared their actual experiences of facilitating change through
three case studies, related them with global literature on change
theories and ultimately presented change model specifically
relevant for Indian culture. A must read for business leaders,
human resource professionals and scholars with interest in change
management.

Dr Arvind Agrawal, Partner, Global HR Lead

Partners LLP, Former President Corporate Development
and HR, RPG Enterprises and President,
National HRD Network

Arora and Sinha have put together a useful compilation of case

studies and practical examples from the industry. This approach
makes the book a valued reference even for experienced HR
professionals. The book provides a refreshing perspective, devoid
of stereotype and cliched description. Instead, they have leveraged
their legendary thirst for reading Indian scriptures and history and
have provided a uniquely balanced viewpoint. I feel this book will
be a treasure trove not only for the students but also for seasoned
HR practitioners.

Dr Aquil Busrai, Aquil Busrai Consulting,

Former Director HR in IBM, Shell Malaysia and Motorola

The change has been the lifeblood of human kind, who has evolved
over thousands of years from amoeba to chimpanzee to Homo
sapiens. These changes transform not only the organization but the
leaders themselves at many times.
The authors, through their in-depth research, bring out a
plethora of change practices that seem to be set amid a spectrum
of several solutions, provide a coherent yet diverse perspective and
create a successful alchemy for change.
This is a must read book for entrepreneurs and business leaders
as well as students, who understand that quite often change
management is like a process of metamorphosis that drives
leaders and teams to pass through a valley of death with courage,
determination and resilience.

Prof. K. K. Sinha, Dean, Executive Education,

BIMTECH, Former Director (HR) NTPC,
Reliance Energy, Jindal Steel and Power Ltd

Alchemy of Change is indeed a labour of love. It is a product of

brilliant combination of academic erudition and professional
exploration. Arora and Sinha have narrated in this volume a few
Indian corporate ‘change stories’ and how they fit, not fully though,
in the conventional (Western) theoretical framework of change
management. The book captivates readers with fascinating stories,
insightful anecdotes and useful theory frameworks. The authors
have been courageous to view transition management, based on
their rich ‘personal corporate experiences’, from a different lens
of native wisdom. They have suggested and argued for, quite
powerfully, an Eastern Indian model of managing a sustainable
transition for well-being of all stakeholders. This is surely a seminal
contribution. Change implies giving up the old and adopting new
ways of thinking and doing. This book fulfils this statement, quite
well. Very readable and stimulating work.

Dr V. P. Singh, Distinguished Professor, Universities and

Ex-OD Advisor, Patanjali Ayurved

The need to understand and respond to change, in this ever-

evolving world, will always remain a contemporary pursuit.
Heraclitus had aptly observed that change is the only constant. On
this vital aspect of leading change, the authors have endeavoured
to blend Western thought with Eastern wisdom, particularly Indian
values, with examples that illustrate and insights that illuminate,
which are easy to understand and are practical in application.

Dr N. S. Rajan, former Group CHRO and Member of

Executive Council, Tata Sons and erstwhile Global
Leader of People and Organization Practice, E&Y
Change and its management is inevitable in 21st-century organiza-
tions. The authors present the art and science of it in a very lucid
manner in this book. They underscore the significant role the
mindset and culture (both within the organization and outside in
the society) play in this often chaotic journey. Indian leaders, who
are either starting on or in the midway of a change journey, will
hugely benefit from the authors’ deep expertise shared through this
very context-focused book.

Navaneet Mishra, Country Manager, Hexagon

Capability Centre India Pvt. Ltd, Hyderabad

I appreciate and acknowledge the immense passion and in-depth,

insightful transition process objectively captured by the authors
together with more than eight decades of impeccable corporate
professional expertise, conceptualising a new paradigm shift to
successful change management using Eastern philosophy and
aligning with Indian culture.
I admire their efforts in sharing life’s learnings with authenticity,
practicality and honesty. Culture and values have been thoroughly
evaluated with greater relevance to the traditional beliefs of
the very essence of Indian philosophy hitherto untapped in
management practices. I am personally aware of immense keenness,
extraordinary efforts of the authors, great research instinct,
voracious readership and great spiritual maturity in their thought
process with conviction. Practical industry examples, both in public
and private sectors, have been extensively referred to judiciously.
I feel extremely proud of the authors for believing, showcasing
and creating awareness amongst knowledge- and guidance-seeking
professionals, academicians, researchers and practicing managers/
business leaders.

L. S. Murthy, COO, Radiant Technologies Inc., USA

A few years back, Dr H. N. Arora advised us on change management.

He has created a benchmark on value-based leadership that,
I’m very confident, will be useful to all professionals in creating
hurdle-free change. Chapters and case studies in this book are best
examples of transformational leadership where a leader is not blindly
followed but respected because of trust-based management aiming
at common and collective goal of organizational performance. I’m
sure that the book will be beneficial to all leaders and professionals.

Atul Sanghvi, Executive Director and CEO,

Cera Sanitaryware Ltd, Ahmedabad

The language we use while shaping change often gets jargonized

and becomes daunting. Alchemy of Change shows that simplicity of
the language creates a pull that makes changes easier and faster.

Abhijit Bhaduri, Columnist, Coach and Author of

The Digital Tsunami
Copyright © H. N. Arora and Rajan Sinha, 2020

All rights reserved. No part of this book may be reproduced or utilized in any form or by any means,
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Contents

Foreword by T. V. Rao ix
Preface xiii
Acknowledgements xxi

Part I
Change Is a Fascinating Kaleidoscope
  1 Change Is Life, Life Is Change 3
  2 Anatomy of Change 9
  3 Changing Organizations 21

Part II
Experiences of Change
  4 Mega Corporation: Challenging Old Paradigms 27
  5 AG Corporation: A Change That Reinvented
a Corporation 41
  6 Akash Corporation: Lip Service Does Not
Bring Change 47

Part III
Manage It or Be Ready for Oblivion
  7 The Blueprint 57
  8 Preparing for Change 65
  9 Vision for Change 71
10 Building a Dominant Coalition 75
11 Designing Change Strategy 81
12 Handling Resistance 85
13 Sustaining Change 101
viii  Alchemy of Change

Part IV
Your Toolkit for Change
14 It’s a Team Game 109
15 Culture of Learning and Innovation Helps 125
16 90 Per Cent of Change Management Is
People Management 137
17 Who Is Holding the Reins? 143
18 Unleashing the Power of Infantry 147

Part V
Leadership: The X Factor of
Successful Change Facilitation
19 Leadership and the Need for a Change Leader 157
20 Value-based Leadership and Successful Change 165

Part VI
Culture and Values as
Vehicles of Change
21 Influence of Culture and Indian Culture 173
22 Values as General Ideals and Standards 183
23 Indian Values as Civilizational Backdrop 191

Part VII
Indian Model for Driving Change

Epilogue 219
References 223
About the Authors 229
Foreword

Today, all CEOs, CXOs and other corporate leaders are expected
to play multiple roles. These include identifying strategies to build
the organizational future; managing its current performance;
studying changes in the world and identifying new opportunities
for business; articulating the vision and values for the company;
inspiring people with this vision and values; designing systems,
structures and strategies; managing teams; networking to maintain
relations; getting new sources of information; making and
implementing people policies; representing and managing various
stakeholders; developing, retaining and managing customers;
ensuring financial performance for the present and preparing for
the future.
In the sea of multiple roles, most CEOs and CXOs get lost and
stick on to do what they are either good at or what is required
for the immediate future than to work for the sustainable future
of the organization. Post liberalization, in the last two and a half
decades, the corporate sector in India has changed drastically. It
has become more purposive, benchmark oriented, competitive and
accountable to short-term results and quarter-on-quarter financial
performance of the company. Today, most organizations have
started setting short-term goals. In the past, an organization was
set up to serve a larger cause in the society and worked for larger
human welfare. This approach was adopted by most businesses in
India such as the Tatas, Birlas, Murugappa Group, DCM group,
TVS group, JK Singhania group, Hero Group of Munjals and
Larsen & Toubro, and in recent times by HDFC, Wipro, Infosys
and so on, which have been sustainable, provided employment
grew at a fast pace and made a difference in the society. This is the
same across the world with organizations such as Nestle, Johnson
& Johnson, Ford and Suzuki. These organizations were founded
on strong fundamentals and a strong value system of service to
x  Alchemy of Change

people through their products or services. The leaders at the

top constantly reminded the people or employees of their values
and vison and focused more on them than on short-term gains.
The values of the founders and top-level leaders reflected service
to all stakeholders—whether employees, customers, suppliers,
investors or bankers—and basic principles of ethics and integrity.
A large part of these values was drawn from the Indian culture
based on seeing each person as a reflection of God or ‘Brahma’ or
incarnation or mirror image of God. The biggest value was respect
for people.
With tremendous changes in our economic structure and
availability of opportunities to do business or to earn more money,
the orientation of many new businesses has changed or has become
different. Organizations are being set up to be built for a few years,
get funding from a few financiers, make an IPO, boost its market
value and sell the company to someone else. Thus, in the last few
years, organizations have started getting set up only to be sold and
not for service to people. Service became a tool and money the
main motivation. Such businesses survive, but not beyond a point.
That is the reason why the percentage of businesses that survive
over a decade or two has decreased.
Recently, in a seminar on leadership, one of the keynote speakers
proudly announced that she created a record by staying with the
same company that she joined 18 years ago. She said that she is
proud to be so loyal. She went on to say that she did not need
to change the company but experienced that her company kept
changing every four to five years. The company was bought and
sold a few times and every time the name changed, the culture
changed, and she played a variety of roles without having to
change the company. I know of my friends and students who set
up companies to be sold a few years after they made a mark. I also
have had students who stayed with the company they started and
went through ups and downs courageously as they had started the
same with vision and values.
As quoted by the authors, the ET500 survey revealed that
82 per cent of the listed companies have either disappeared or
declined during the last 10 years. Businessweek’s survey of 1,087 corporate
 Foreword  xi

directors in 2005 found that 31 per cent of CEOs were fired by their
boards mainly because they mismanaged change. By most estimates,
70 per cent of all corporate change initiatives launched in the 1990s
failed to achieve their objective and virtually every survey ever
since has shown similar results. Having reviewed a large amount
of data and literature, the authors indicate that business firms set
up without strong foundations disappear sooner. A strong belief
system based on service values and culture leads to organizations
that sustain several decades and centuries.
According to the authors, Indian culture is predominantly
spiritual, with every human being living in a cosmic vision, leading
towards high spiritual truth. It does not mean that all the people of
India are spiritual. So true is this statement that I am reminded
of the two characters that influenced Mahatma Gandhi as a child:
Shravana and his devotion to his duty (carrying blind parents to
pilgrimage) and Harish Chandra who stood by his word even when
he lost all his kingdom, wife and child. Gandhiji learnt to speak the
truth, honour one’s commitment and be devoted to one’s duty.
These are values.
In my own work of effective people, I defined an effective person
as one who discovers and uses his or her talent for the benefit of
other people. Those who serve many people are very effective, and
those who continue to serve many even after they die through the
institutions they leave behind are super effective people. To be such
super effective person means to be an institution builder, and to be
an institution builder means transforming an organization through
change and to be value, vision and superordinate goals driven.
David McClelland formulated a theory of achieving society in
which he outlined that thoughts precede actions or thoughts create
intentions and propel us to action. Thoughts are made of language,
and therefore language plays an important role in development
and sustainability. The language we may like to promote drawing
lessons for this book is a language of values and traditions following
the spiritual paths outlined by many. Every change must be value
driven and meant for the welfare of all. Leaders play a primary
role, and value-based leadership is the most desirable aspect for a
sustainable and happy future for all.
xii  Alchemy of Change

This book with the three illustrative cases, incidents and a lot of
review of literature from ancient Indian wisdom as well as global
writers will form an invaluable collection for those interested in
understanding and practising leadership and bringing about change
to make a difference in the lives of others.
I like to close with immense gratitude to the authors for sharing
their wisdom and contributing to this book through practical cases
and wise words. This book is a must-read for all managers, CEOs,
CXOs, management teachers and students. The book provides
insights into the role that values and spirituality play in laying the
foundation to manage enterprises and even our life successfully.
It helps bring lasting change where required.

T. V. Rao
Former Professor IIMA, Founder President
NHRDN and Chairman TVRLS
Preface

A plethora of well-acknowledged literature by academicians,

thinkers and management gurus is available, advocating almost
similar processes and sequence for managing change. Their writing
has inspired and catalyzed my own thinking; but the experiences
that have enriched me tell a different story. The insights gained
from the work and study of theoretical framework have helped me
carve out an Indian model for driving change and present it before
you in the form of this book.
It was during 1996 when Dr Arora had an opportunity of
discussing with the chairperson of Mega Corporation about
the modalities of his association with the organization. During
discussions, the chairperson and managing director drew an
honest picture of the state of affairs then prevailing in the company
and his need to change the decaying several decades old culture.
The group was gradually losing market across its products, and
the management was merely a helpless onlooker of the various
malpractices which had eaten into the work culture for decades.
A brief analysis of the situation is given in Part II ‘Experiences of
Change’. He felt thrilled with the opportunity and the challenge
of handling a major change effort in the last four years of his
active service. This was followed by two other change initiatives
he became closely associated with. All three cases are given as
case studies in Part II, ‘Experiences of Change’. The names of the
organizations are fictitious to maintain confidentiality.
The success of change efforts at Mega Corporation and
Dr Arora’s exposure to the basics of change management
motivated him to explore the subject further and delve deeper
into managing the people side of change, one of the most
unpredictable variables that we will ever encounter. Dr Arora
started his research work on management of change under the
able guidance of Dr T. V. Rao, professor at the Indian Institute of
xiv  Alchemy of Change

Management Ahmedabad, and presently chairperson of T. V. Rao

Learning Systems.
Change is a constant in every part of our personal and
professional lives. Organizations are no exception, in fact, they are
witnesses to dramatic changes at remarkable speed. The ET500
survey reveals that 82 per cent of the companies which were listed
have either disappeared or declined during the last 10 years. This
is not only with Indian companies, but a look at Fortune 100 shows
that 70 per cent of the companies declined just in the same number
of years.
Businessweek survey of 1,087 corporate directors in 2005 found
that 31 per cent of the CEOs were fired by their boards mainly
because they mismanaged change. By most estimates, 70 per cent
of all corporate change initiatives launched in the 1990s failed to
achieve their objective, and virtually every survey ever since has
shown similar results. The success rates of Fortune 1,000 companies
for re-engineering—the 1990s most popular change fad—were well
below 50 per cent, perhaps as low as 20 per cent.
According to a 2013 Strategy & Katzenbach Centre survey on
change management, the success rate of major change initiatives
is only 54 per cent. The costs are high when change efforts go
wrong—not only financially but in lost opportunity, chaos, wasted
resources and diminished morale. Initiatives announced with great
fanfare see zealous efforts from employees. Hence, it is only logical
for scepticism to set in, if they see their efforts and the company’s
initiatives fizzle out. This subject was further studied by Herold
and Fedor examining over 8,000 individuals involved in over
300 changes, the findings of which were published in their book
Leading Change Management: Leadership Strategies That Really Work.
Amongst many things that they brought about, they found that
in most cases, it is not one change but many overlapping changes
that take place at the same time, and there is a ‘need to implement
a holistic change model that takes account of both the abilities of
those who will be asked to lead and carry out the change and the
context in which the change is to occur’.
On the other hand, some organizations succeed spectacularly at
transforming their work spaces, styles and culture, thereby rewriting
 Preface  xv

a new story with great flourish. Change in these organizations

brings opportunities, challenges and much excitement. So what
enables them to effectively execute their intent when the vast
majority cannot? What causes an organization to succeed and the
other to fail? Although each corporate failure shall have its own
set of circumstances related to environment, industry or product,
Professor Chris Argyris (1997), of Harvard Graduate School, found
a common thread:

All were staffed by brilliant people who knew what to do. They
were right. Yet, when the circumstances changed, these brilliant
people failed to see, accept or adapt to these changes. They
failed to learn. Any company, which aspires to succeed, must
first resolve a basic dilemma: success depends on learning, yet
people do not know how to learn.1

Everyone is trying to change. Somewhere it is a planned effort and

somewhere ad hoc. Somewhere it is vision driven and somewhere
it lacks vision or has a short-term vision. Societal behaviours and
rigid norms that are adapted in organizations are mostly based on
short-term focus with emphasis on shortcuts. Perhaps because of
a ‘trader mentality’, we do not seem to have the patience needed
to bring about stable and enduring change and look for cosmetic
solutions for immediate profit.
We may be theoretically aware of the process of managing
change; still we sometimes find it hard to bring about meaningful
change. The most critical barrier to change, in most places,
lies in the lack of belief in and passion for change at the higher
management level. They may say all the right words in the right
places, but deep in their hearts, their conviction for acting upon the
intent is bleak. In the 2012 edition of Prosci’s change management
study, 650 organizations cited ineffective change sponsorship as
the number one obstacle to change. This hesitant willingness is a
critical void through which even well-planned changes can come
crashing down.
It is also commonly observed that senior executives and
employees see change differently. For senior managers, change
xvi  Alchemy of Change

represents an opportunity for the business and for themselves. The

employees see the change as disruptive, with the fear of unknown
and the possibility of losing what they have grown accustomed to and
comfortable with. We do not make serious efforts to bridge this gap
by building awareness of the need for change and fail to accelerate
people’s understanding of and commitment to change. Therefore,
un-learning and re-learning are of prime importance. A globalized
economy is creating more hazards and more opportunities for
everyone, forcing the organizations to make dramatic improvement,
not only to compete and prosper but also to survive. If resistance
to change is a normal and natural reaction, then resistance should
be expected. If resistance is expected, then our planning activities
should be designed to mitigate that resistance, but this is where we
make most errors.
In many cases, we also find that organizations continue their
dependence on yesterday’s strengths, which may not be relevant
to contemporary business scenario. Most companies do not
anticipate the need for change and just react to events, resulting
in negative and traumatic responses that do permanent damage
to morale and trust.
It has also been observed that many organizations, through
downsizing, consolidation, restructuring and so on, have been suc-
cessful in reducing costs, while certain quality and re-engineering
efforts have helped in removing inefficient steps in work pro-
cesses. Those efforts helped them turnaround businesses, making
them more streamlined. It is important to note that such turna-
round cannot, however, be termed as transformation or change.
Transformation changes the fundamental image of the business as
seen by customers and employees and focuses on creating mind
share more than market share. Change truly occurs when individu-
als in the organization begin working in new ways—displaying
new behaviours, using new tools, adhering to new processes and
adopting new values. Through turnaround, by exerting pressure
by almost every modern management practice, employees work
lives might change but not always for the better.
Ever since the floodgates of competition were thrown open, we
have been shaken and are struggling to cope with the pace and
 Preface  xvii

rate of change. We are forced to re-examine various aspects of

business and even organizational structures. Leading that effort
has been the person on the top. A leader’s preferences are likely to
be reflected in the style of transformation. All aspired to improve
their companies while meeting certain personal objectives. All
were blessed with some degree of management and leadership
skills; a few were outstanding at both. More interesting than their
weaknesses, though, was the formative role their aspirations and
preferences played in shaping the change programme. Whatever
a company’s potential, transformation is doomed to fail unless
change leaders, with selfless spirit, release and orchestrate the
energy within the organization, with people adopting new values
and behaviours.
Peter Senge, in an interview by Fast Company, said2:

It is not simply a matter of more resources, more time, more

money, more consultants, more efforts or more intelligence. It
is not a matter of resources or intelligence. A lot of competent
executives fail at producing and sustaining momentum
around change. That suggests that something more universal
is at work here. The most universal challenge that we face is
the transition from seeing our human institutions as machines
to seeing them as embodiments of nature. We need to realize
that we are a part of nature, rather than separate from nature.
The thinking and acting of the past 200 years—nurtured in
Europe, accelerated in United States, diffused throughout the
world today—is a machine mindset. That mindset directly
affects how we see organizations—and, therefore, how we
think about creating change in those organizations. If you
use a machine lens, you get leaders who are trying to drive
change through formal change programs. If you use a living–
system lens, you get leaders who approach change as if
they were growing something, rather than just ‘changing’
something. Nature doesn’t change things mechanically:
you don’t just pull out the old and replace it with the new.
Something new grows, and it eventually supplants the old.
If you create compliance-oriented change, you will get
xviii  Alchemy of Change

change—but you will preclude the deeper processes that

lead to commitment, and you will prevent the emergence of
self-generated change.

Almost every company is struggling with the issue of manag-

ing change: what to change to and how to change. Everyone is
looking for a mantra to respond to the radically changing business
scenario.
In most organizations, structural and system changes become
increasingly dysfunctional as they ignore the basic dynamics and
spirit of human values. Any change process based on techno-
economic considerations to the oblivion of human values is bound
to disrupt interpersonal relationships within the organization.
The truth is that only value-based institutions that evolve from
the wisdom of the soil can bring about enduring change. Asian
countries such as Japan, South Korea and Singapore have made
proper adjustments in the managerial systems to suit the local
environment and culture to implement change processes in their
business organizations instead of aping Western management
practices.
While transferring technology, there is a tendency to transfer
some of the managerial practices and systems also on the belief
that these management concepts are universal and can be grafted
anywhere. Accordingly, popular concepts such as quality circles,
re-engineering, downsizing, 5S, kaizen and so on are being
incorporated from abroad as potential solutions for meeting
the challenges of change. While it may be easier to transfer and
assimilate the technology know-how, the transfer of managerial
technology is a difficult process because of the cultural variations.
The new systems are based on impersonal equations at work,
dissolution of traditional hierarchies and emphasis on assumed
contractual relationships—all of which are incongruent with the
basic grain of Indian psyche, our cultural heritage and attitudes,
which, to a great extent, govern the behavioural patterns. The
outcome has been management by chaos, crisis and manipulating
structures: anything but management of change in the real sense
of the term.
 Preface  xix

There is already an enormous amount of information on areas

such as values, change and leadership. There are few books that
hold it all together in a unified single framework which can guide
action. The problem is not a lack of information or ideas, but a
lack of synthesizing vast amount of information and presenting it in
an integrated form for practical use. This book, while emphasizing
that organizational change needs to be driven by value-based
leadership, integrates all the available perspectives on change in
one place.
This book has been written over several years. It is an offering
born out of Dr Arora’s own journey of understanding and
discovering the key principles that make for successful change,
enriched by the significant ideas and insights on the management
of change in academic journals and the writings of management
gurus. The book attempts to provide basic knowledge on change,
leadership, Indian culture and values, without resorting to jargons
and statistics.
We have divided this book into eight parts. Part I has been
divided into three chapters. The first chapter explains the meaning
and nature of change and how it affects organizations. This
understanding is a prerequisite for change initiation. The second
chapter helps in understanding the change process in its totality.
The third and final chapter describes how organizations are coping
with this cascading change in the present era.
In Part II, we briefly review three case studies, all of which are
change stories, but in totally diverse contexts and organizational
realities. Actual names of the organizations have been masked
and substituted by fictitious names, to protect their privacy and
reputation. The various interventions in these case studies are
discussed appropriately, along with the process of change.
Part III attempts to discuss a blueprint for managing change
starting from preparation to visioning to formulating appropriate
strategy and structure as well as how to manage resistance and
sustain change on a long-term basis. This is followed by a discussion
on tactics deployed for successful change in Part IV.
In managing change, the leadership is a critical variable
that facilitates or makes change happen. The whole concept of
xx  Alchemy of Change

leadership and the type of leader needed for successfully driving

change has been discussed in Part V.
Part VI is devoted to the role of culture and values in managing
change and the distinctive characteristics of Indian culture and
values that could have a bearing on the change process.
The insights gained from the change experiences and study of
theoretical framework have helped us propose an Indian model
for driving change, a model of value-based leadership. This
has been presented in Part VII. In the epilogue, we conclude
with our thoughts on the utility of the proposed model and the
journey ahead.
There is a flow in successful change efforts. The chapters follow
that flow.
Acknowledgements

There are many acknowledgements when a book represents long

years of experience and many known and unknown sources of data
and learning.
I would, however, start with special and grateful thanks to the
person who encouraged me continuously to stretch existing ideas
to new levels. I am most indebted to Dr T. V. Rao, Chairperson,
T. V. Rao Learning Systems, and Adjunct Professor, Indian
Institute of Management Ahmedabad, for his valuable guidance,
insights and sustained encouragement, and for agreeing to write the
Foreword for this book. Through his life and work, he has taught
me the mantra of working with a missionary zeal.
I also express my sincere thanks to the management and the
managers of organizations with whom I have worked and who have
demonstrated that value-based change is not only possible, but is
the only sustainable way forward.
Crystallizing my thoughts has been easier for me with the
inspiration drawn from various authors and thinkers I have
read or met along this journey. Most of them are featured in the
references.
It was wonderful to have Alok Mehta, a senior human resources
(HR) professional and Ila Mehta, a communication professional, as
my editors. Both jointly performed the task of polishing and refining
the first draft of the book. The enthusiasm of my son-in-law Alok
and daughter Ila has been reassuring.
While the book was nearing completion, I took the opportunity
of sharing its contents with Rajan Sinha, who was closely associated
with me while implementing change process in Mega Corporation
and was also a great support in the transformation process at AG
Corporation. Rajan came out with many useful suggestions. His
inputs during various rounds of discussions were so valuable that
xxii  Alchemy of Change

I left it to him to incorporate these inputs in the book as a co-author.

I appreciate his contribution, especially in developing the ‘Indian
Model of Change’.
Rajan, as a co-author, also happens to share the proposed
Indian Model of Change with Dr Harismita Trivedi of Institute
of Management, Nirma University, whose valuable suggestions
have been incorporated in the book. My sincere thanks to
Harismita.
We would particularly like to mention Ms Namarita Kathait of
SAGE Publications for her insightful comments and demands for
enriching the manuscript. She has been a constant source of support
during the entire process. Thanks, Namarita.
Finally, I would like to express my gratitude to my wife, Natasha,
whose support in letting me find my insulated space and time for
this work was a huge encouragement.
The book could never have been completed without blessings
of the Divine grace. I feel blessed and humbled in His presence
around and within.

H. N. Arora

Dr Arora has been my inspiration since the early 1980s in the

mould of Dronacharya–Eklavya relationship. Unlike the tragic
ending of the original story, he became my mentor and guide since
1997, when I got a call from him to work with him on a major
change project. This relationship has only grown since then. He is
involved with many change management assignments, including
some in which I assisted him. Therefore, when he wanted to
encapsulate his learnings after having completed his PhD under the
guidance of Dr T. V. Rao, he invited me to be a part of the project
I was too happy to pitch in. Grateful to you, Sir!
My wife and partner, Lila, can never be thanked enough for her
support and sacrifice for realizing my career dreams.
I would also like to thank all those leaders and stalwarts including
Abhijeet Bhaduri, Dr Aquil Busrai, Dr Arvind Agrawal, Prof.
D. M. Restonjee, Prof. K. K. Sinha, Mr L. S. Murthy, Dr N. S. Rajan,
 Acknowledgements  xxiii

Mr Navaneet Mishra, Dr Rajeshwari Narendran and Dr V. P. Singh

who took the time from their busy schedules and did advance
review of the book.
Of course, I am also grateful to Namarita Kathait and Shruti
Gupta of SAGE Publications for their painstaking support and
encouragement that has led to this book seeing the light of the day.

Rajan Sinha
 Part I
Change Is a Fascinating
Kaleidoscope
 C hapter
1
Change Is Life, Life Is Change

Mountains are being worn away, rivers are altering their channels,
valleys are deepening. All life is also a process of change,
through birth, growth, decay and death.
—S. I. Hayakawa

In nature, all change processes take place on the foundation

of continuity. No change can be perceived without continuity.
‘Change is the only constant thing in today’s world—Nothing
endures but change. A flowing river constantly changes its contents,
shape and course. It may look the same but it never is the same.
The river is like the world. Yesterday’s world is not the same
as the world today or tomorrow,’ says Heraclitus, the pre-Socratic
Greek philosopher. Change has been contemporary to human
existence, an ever-going phenomenon. It occurs in every part of
our personal and professional lives and is a common occurrence
in business today.
Former British Prime Minister Harold Wilson once observed,
‘He who rejects change is the architect of decay. The only human
institution which rejects progress is the cemetery.’ Change is the
law of life. Nothing remains the same from one moment to the next.
We are older than we were a minute ago, and that minute is gone
forever. It is natural for change to continually occur, whether we
expect it or not. Change could surprise us only if we did not expect
it and were not looking for it.
4  Alchemy of Change

Change implies giving up the old and adopting new ways of

thinking and doing. The present situation has to be abandoned
in favour of a future which is very similar yet very different.
Change brings a paradigm shift in the organizational performance,
giving a new dimension to business processes and significant
improvement in productivity. A fundamental assumption of change
is that something different is possible, and there is a chance to
improve performance in a meaningful way. Change is, thus, a
process of bridging the gap between what is happening and what
is possible.
Change means dissatisfaction with the old and belief in the new.
Dissatisfaction arises when a system finds it difficult to respond to
the environmental pressures. Today, new strategies for attracting
customers are being formulated, and a new ecology of competition
is developing. We are constantly faced with new situations, new
relationships and new pressures. In these circumstances, companies
need to realign some aspects of their strategy, organization
or culture while retaining the others. That is change. It is a
systematic, planned and simultaneous attempt across many fronts
to fundamentally alter the basic rhythm of a company. Change
management can, thus, be defined as a continuous process of
aligning an organization with its marketplace and doing it more
effectively than competitors do. The consequence of change is to
move the organization from its current state to a more desirable,
improved state.
The reasons for change could be as varied as the process of
change itself. Whether it is through lower costs, improved service
delivery, reduced risk exposure, better product, increased revenues
or improved customer satisfaction, each change is an attempt
to improve performance. While the notion of becoming more
effective or more competitive or closer to the customer could be
the motivation to change, these goals need to be translated into
specific inputs to organizational processes, systems, organization
structure and individual job roles. This is how we define the process
of change.
Change is not an event, it occurs as a process. Values, skills and
behaviours of people do not change based on certain orders or
 Change Is Life, Life Is Change  5

announcement. This can only be achieved through changing the

ways in which people think and act in the organization—through
altering their mental models and mindsets and needs constant
communication, tools, milestones, reminders and rewards. These
mental models or mindsets are called ‘routines’. These are made up
of assumptions, values and beliefs. More importantly, they contain
formulas or codes to guide behaviour in specific situations. Since
routines create and sustain stability in an organization, change
management is largely about changing people’s mindsets.3
When we talk of changing mindsets or mental models, we try to
persuade the individual to give up some of his or her assumptions
and beliefs. When this takes place by way of influencing and
persuasion, we experience change in behaviour, moving through
unpredictable and messy period of transition, and arrive at a desired
new way of behaving and doing the job.
Change is as much a part of today’s corporate reality as mindless
adherence to rules and routines was a few decades ago. The speed
of change and uncertainty continues to dominate the scene. It is
our customers, our competitors and the market that decide whether
to continue or not. In the new regime, managers do not decide
the fate of employees, customers do. The company does not close
plants or lay off workers; customers do, by their action or inaction.
Our needs are subordinated to those of the people for whom we
are creating value. This realization is a defining phenomenon of
the 21st century, in the sense that it is no longer a thought in the
minds of isolated industrialists or businesspersons or policy makers,
but it is now a global consensus.
In fact, in a 2002 speech in European Roundtable Conference,
General Motor’s boss, Morris Tabaksblat, said:

Manufacturers are no longer able to impose their will

on their customers. The era of push selling is definitely
closed. Now, we are fairly and squarely installed in the era
of pull marketing. It is no longer a question of knowing
what we can sell the customer, but of what we can learn
from customers about their needs and how we can help to
satisfy them.4
6  Alchemy of Change

Change today happens suddenly, unexpectedly and unpredictably.

Markets emerge, flourish and disappear seemingly overnight.
Countless technologies, industries and markets have emerged
and vanished without trace, like photo-films, VCRs, typewriters,
pagers, public payphones, landlines, CRT TVs, just to name a
few. This phenomenon of disappearance of ubiquitous products is
only going to acquire mindboggling proportions. The basic goal of
change management, therefore, is to make fundamental changes in
how business is conducted in order to help cope with a new, more
challenging technology/market environment.

New Dynamics of the VUCA World

Niccolò Machiavelli, an Italian humanist, philosopher and writer,
wrote in his book titled Prince: ‘It must be considered that there is
nothing more difficult to carry out, nor more doubtful of success,
nor more dangerous to handle, than to initiate a new order of
things.’ Yes, change is difficult, but for organizations who want to
succeed in today’s business environment, it is inevitable.
Today’s times are challenging our old and established beliefs and
ways of working. Earlier, business was for life. Today, it appears
that all of life is for business. We are in the midst of the tumultuous,
chaotic, ambiguous and often unpredictable changes. Everything
around us is in a continuous state of uncertainty. Today’s business
environment confronts organizations to go beyond the many
assumptions they have held of business and governing the business.
At the same time, life today is throwing up opportunities for
creating new ways of working, new ways of doing business, new
relationships and new ways of living, which might lead to more
balanced and wholesome approaches to life.
In today’s world, speed has become the dominant factor, and
we have to race for an ever-moving finish line to always be a step
ahead. Nothing can give a permanent competitive edge. The only
way we can counter events is to gear ourselves to look at these
changes as potential opportunities. Highlighting the importance of
speed, Rupert Murdoch, Australian American business magnate,
 Change Is Life, Life Is Change  7

has said, ‘The world is changing very fast. Big will not beat small
anymore. It will be the fast beating the slow.’
Something somewhere is affecting everybody in one way or
the other. The status of work has changed. The old skill sets are
getting outdated at an ever-increasing pace and so is the concept
of job security. The simplest example is that of the disappearance
of typists, stenographers, data entry operators and an army of
so-called class-4 employees. Lifestyle, ambitions, attitudes, values,
behaviours, family life, work environment, societal norms and so
on—everything is getting impacted. Thus, at the individual level,
change can give rise to a spectrum of emotions and reactions: fear,
resistance, anxiety, energy, enthusiasm, ambiguity, helplessness,
challenge, motivation, cynicism and pessimism. Managing these
emotions and reactions, the people side of change, is often the
most challenging and critical component of organizational
transformation. No change initiative can succeed without getting
people on board. It is the degree to which they change their
behaviours and work processes that will make or break the change
initiative. Change management is the process of recognizing,
guiding and managing these human emotions and reactions in a
way that minimizes the inevitable drop in productivity that could
accompany change. Managing these elements and emotions in
ways that keep them focused and consistent is the true challenge
of change.
 C hapter
2
Anatomy of Change

Change Drivers
In the majority of cases, the primary drivers of change are the
demands of a dynamic market; the arrival of new technology;
the rapid movement to a global economy; emergence of new
competitors; swing in the economic cycle and a dramatic shift in
the behaviour, values, needs and beliefs of consumers. Power has
shifted from inside to outside, from corporate planners to aggressive
buyers, who have a huge array of choices and can conveniently
switch to something better instantly.

External Forces
As early as in 1999, Peter Drucker and Flaherty wrote, ‘External
forces producing unprecedented opportunities in the new society
were in the global arena’.5 Because of the scope and diversity
of globalization, space does not permit a detailed commentary,
but many trends are clearly visible that have had a profound
effect in reshaping the environment. Drucker and Flaherty further
observed that:

These external forces are rapidly changing the environment in

which business operate:
10  Alchemy of Change

• The same forces that destroyed Marxism as an ideology

and Communism as a social system are also rapidly making
Capitalism as a social order increasingly irrelevant.
• Complex and diverse global markets are replacing harmo-
nious and distinct markets operating within the confined
national boundaries of conventional Capitalism.
• Distribution channels and customer needs are changing
globally far faster than technological innovations.
• There is no evidence that government, trade and industrial
policies based on economic engineering will produce the
results they promise for the global economy.
• Major regional blocks such as Europe, North America, and
the Pacific Rim are becoming the key structured units of the
global economy.
• Productivity is the new ‘wealth of nations’.
• Increasingly faceless rather than face-to-face exchanges
dominate global communications.
• Western societies are no longer the centers of economic,
political, and cultural gravity.
• Money and information know no fatherland; they transcend
geographical units.
• The rise of transnational corporations, international regional-
ism, and supranational agencies, has substantively and quali-
tatively diminished the concept of national sovereignty.
• Competent management, investment, and education are the
main keys to economic development.
• The increasing number of new national states is a reaction to
the rise of ethnic tribalism throughout the globe. This trend
further reflects the superficial geographical demarcations of
a world without accepted borders.
• Cross border alliances, both formal and informal, are the
strongest integrating forces of the world economy.
• The distinction between the domestic and international
economy has ceased to be a reality; however, political,
cultural and psychological elements tenaciously cling to
the idea.
 Anatomy of Change  11

• Money flows are economic destabilizers, unlike information

flows, which have benign economic impacts.
• A business that wants to do well will have to be competitive
internationally. Even if it is not in foreign operations, it must
have a global mindset.
• Money has slipped its leash; it has gone transnational. It
cannot be controlled any longer by nations, states, not even
when they act in concert.
• In every developed country, traditional workers making and
moving things will account for only one sixth to one eighth
of the workforce in the coming generation.5

In addition, technological changes such as the internet, mobile

telephony and so on have made the gig economy a viable
proposition for both organizations and workers. The introduction
of artificial intelligence (AI), machine learning, 3D printing and
automation is making nearly half of the jobs either extinct or
close to extinction. While every technological innovation has also
spawned completely unthinkable new jobs, it is difficult to predict
the nature of many new jobs that will arise.
These external forces might also include global or local regula-
tions, inflation, cost of living, the economy, court decisions and so
on, where we have no direct control. In fact, on developments such
as cryptocurrency, even governments will have no control. Changes
in these areas have a direct bearing on the business of the company.

Internal Forces
Many a time, internal forces may also cause change to occur. These
internal forces might include the following:

1. In terms of Kouzes and Posner’s framework, two of the five

leadership practices are challenging the process and visioning.
The top management may conceive and develop a new
shared vision of a new desired future and direction to grow the
organization.
12  Alchemy of Change

2. An organization may be failing to achieve its objectives in key

areas of performance such as quality, market share, profitabil-
ity, growth, productivity, customer acquisition and retention,
employee attrition and so on.
3. The emergence of gig economy as one of the dominant
characteristics of labour markets, changing demographics of
employees in terms of both gender diversity and the growing
proportion of millennials in the workforce, their differing
expectations and so on.
4. Some of the biggest breakthroughs and innovations have
come through employees; whether it is 3M’s ‘Post-it’ notes or
‘kurkure’ snacks for PepsiCo. Often, they are also in the best
position to suggest organizational changes, at least operational
changes. Japanese companies have institutionalized kaizen
and suggestion schemes and so on as a part of organizational
culture. Many listening organizations also make use of large-
scale interactive meetings such as town halls.

Destabilizing Events
Large-scale change is usually triggered by some destabilizing
events, events of sufficient scope and magnitude to create significant
disequilibrium in the organization.6 These destabilizing events
vary quite a bit among industries, but in general they fall within
six categories:

1. Shifts in industry structure or product class life cycle: Throughout the

life cycle of a class of product, there are changes in patterns of
demand and users, in the nature of required innovation and
in the competition. When an industry moves from one stage to
another, it almost always involves a period of disequilibrium
for companies in that industry. For instance, shifting consumer
preference to quartz and less durable watches wiped out HMT
with the advent of Titan and so on.
2. Technological innovation: Technological innovation can change
the basis of competition within an industry. When the basis of
 Anatomy of Change  13

competition changes, there is great uncertainty. Firms that had

a sustainable competitive advantage suddenly find that their
advantage is gone, or worse, that they are at a disadvantage.
The core competencies of the organization are under a cloud.
Typical examples include assetless organizations such as OYO,
Airbnb, Uber and so on. Satellite-based communication has
revolutionized many industries beyond recognition, what S. K.
Sharma calls orbit change. We will talk about it in detail in the
Epilogue.
3. Macroeconomic trends and crises: Significant shifts in national and
world economics can change the basis of competition or present
challenges to current ways of running an organization. Any of
the factors such as oil crises, trade barriers, foreign currency
valuation/fluctuations, inflation, trade balances, consumption
patterns, capital formation can suddenly alter the situation in
which an enterprise finds itself, thus necessitating significant
change. This change can also be benign for some industries.
For example, rising oil prices made many previously unviable
non-conventional energy sources viable.
4. Regulatory and legal changes: Changes in the legal environment
or regulatory framework, such as the deregulation of
telecommunications, trucking, airlines and banking, can create
major modifications in the competitive environment. Mobile
telephony is a classic example of how regulatory changes
brought about a sea change in communications.
5. Market and competitive forces: The entry of new competitors into
a market may present new strategic threats if they choose to
compete in ways different from historical industry practices,
such as the Japanese did in the 1980s with automobiles,
consumer electronics and copiers. The result is competition that
is more intensive, more aggressive and simply better than that
in the past.
6. Growth: A final force contributing to strategic change is a
result of success in the competitive environment—growth.
As organizations become larger, their competitive strategies
and their organizational principles may bump into the
limitations of size. Successful niche players may find themselves
14  Alchemy of Change

under threat, especially from new and agile players, as they

get bigger.

Many a time, the environment may be friendly but the organization

may start to decline due to incompetent management or
overconfidence and arrogance of past success. This leads to
insensitivity to customer needs, reduction in product development
and quality and failure to monitor trends in the market. This
situation also offers unique challenges for organizational change.

Change in the Mindset

External change is usually obvious and has immediate impact
and, therefore, there is no choice but to deal with it in order to
survive in business. The need for internal change is often less
obvious and usually seems less immediate. It is usually given less
emphasis and priority because results are not immediate and
seemingly intangible. The fact remains that we cannot meet the
challenges of external change without first carefully managing
internal change. The real revolution is inside us. On the one hand,
it is traumatic; on the other hand, it fills us with enthusiasm. Belief,
courage and conviction are essential before we start the change
journey. All change management cases look alike, but in reality,
each one is unique to the prevalent culture, beliefs and mindsets.
Change is a huge mindset issue in terms of how to perceive, think
and behave differently, to improve over the past and the present and
prepare for the future.
Any internal or external crisis or performance gaps or identifica-
tion of new opportunities in the marketplace that the organization
needs to pursue in order to increase competitiveness may force
the organization to embrace change. Organizations benefit from
change that results in new ways of looking at customer needs, new
ways of delivering service and new products that might attract
new markets.
To succeed and thrive in this liberalized era, the Indian industry
has no choice but to become globally competitive. Disparity
 Anatomy of Change  15

between existing and desired performance levels has to be identified,

aligned and optimized. Performance falling below expectations or
below aspiration levels is the trigger for organizational change.
Unless organizations take radical action, the gap between their
expected performance and actual performance will only increase.
Somewhere current procedures may not be up to standard while at
other places new ideas or technology may be required to improve
current performance. Lackadaisical ways of handling things in a
protected environment have to yield place to dynamism, alertness
and enthusiasm, to deliver maximum value to its customers by
offering world-class products and services at lower costs, with
minimum response time. In a market economy, no organization
lives in isolation—it has to understand the changes sweeping the
business world, and to change itself fast so as to not be overtaken
by change but be in a position to take control of its future. Any
complacency will sweep them off their feet.
Today, we are into a single economic system drawn by
globalization. Each company will have to understand the impact
of worldwide trends on current and future operations of the
company. Every company shall be required to work out a strategy
that addresses a globalized market. Each one shall feel the need
to optimize learning opportunities through exposure to various
markets around the world and reach new customers. Today’s highly
competitive economy does not permit us to continue with long-held
strategic assumptions and conventional wisdom. We shall have to
unlearn, relearn, grow and innovate. Albert Einstein famously said,
‘If all you ever do is all you’ve ever done, then all you’ll ever get is
all you ever got.’
Art of War, written about 2,500 years ago by Sun Tzu, teaches
us to rely not on the likelihood of enemy’s not coming, but on our
own readiness to receive him; not on the chance of his not attacking
but rather on the fact that we have made our position unassailable.
The speed of implementing change in organizations is emerging
as a new competitive differentiator. When faced with such
turbulence and disequilibrium, we will need to look for new ways
to generate and nurture new types of competencies that are more
relevant to the situation. Today’s digital revolution has impacted
16  Alchemy of Change

how products are designed, manufactured and distributed. Digital

technology is today applied to more and more functions of business
and we use countless software to lower operating costs, creating
better products and improving the business model. It is not a job
to be done overnight. It requires deep convictions, enormous
upheavals, a vision of what lies ahead and perseverance even
at times when we face serious roadblocks and find ourselves
in difficulty.
To remain competitive today, organizations must respond to
continuously increasing changes in how they conduct business,
use technology, involve employees and deal with customers. The
fast and ever-changing environment calls for a different set of tools
and techniques to manage and administer. Organizations cannot
be just endlessly managed based on yesterday’s rules, assumptions
and practices as they are no more relevant in today’s fast-changing
environment. If the organizations do not keep pace with the
changing technology, consumer preferences and effective business
processes, they are bound to lose their competitive edge. John Lilly,
American philosopher and writer, has emphasized the importance
of change saying, ‘Our only security is our ability to change.’

Nature and Types of Changes

The nature and type of a systematically planned change depends
upon the need of an organization based on the environmental
impact it faces and its prevailing culture. At times, a few transitional
changes might be sufficient to yield desired results, but sometimes
the organization might need fundamental and radical changes.

Strategic versus Operational

Strategic change is concerned with broad, long-term and
organization-wide issues. It is about moving to a future state,
which has been defined generally in terms of strategic vision and
scope. It would cover the purpose and mission of organizations,
 Anatomy of Change  17

their corporate philosophy on matters such as growth, quality,

innovation, values concerning people, the customer needs served
and the technologies employed. It is a change in the content of the
company’s strategy, covering its scope, competitive advantages and
synergy. Operational change relates to new systems, procedures,
structures or technology, which will have an immediate effect on
working arrangements within a part of the organization.
A typical example of operational change could be implementation
of SAP across the organization or addition of downstream product
line, whereas an example of strategic change could be Hero Cycles’
foray into motorcycle manufacture.

Developmental versus Transitional

The concept of developmental change is based on natural growth,
namely, the business organizations change through a predictable
growth process like a child to adulthood. Developmental or
continuous change builds on the past, without rejecting it. Here,
the focus is on immediate impact on quality, quantity, unit cost
of production and timeliness through new systems, procedures,
structure or technology. Just like the improvement of billing
procedures or payroll processes.
Transitional change, on the other hand, is reactive and defensive
in nature, adopted by companies that have been successful but find
it difficult to compete and thrive in the new environment. In this
type of change, the company adopts proven formulas and protects
long-established practices to stay competitive. However, it could
be more difficult and painful. It is the same change that is brought
by acquisitions, mergers and restructuring.

Continuous versus Discontinuous Change

In any change process, the organization continues with certain
critical aspects, discards dysfunctional aspects and acquires certain
new features. Continuous change, which is incremental and slow,
18  Alchemy of Change

and discontinuous change, which is rapid and radical, both consist

of different features and require different capabilities and skills for
their management.
In continuous change, the transformation is relatively consistent
with what has happened before; we build on the past without
rejecting it, namely a development or an extension rather than a
radical redefinition of things. Here it is an ongoing process, and
we adapt to it constantly, without great efforts. The continuous
change model is based on the concept of a current state, a future
state and a transition state, and the change is expected to occur
over a finite period of time. This type of change can be delegated
without intimate involvement of the top management, who need to
only facilitate, monitor and support. Here, the expectation is that
the move to the future state shall be completed.
During the last few years, we have seen many significant changes
in the technological, sociocultural, competitive and political
conditions. To sustain growth and profitability in such a fast-
changing environment, incremental and continuous change is not
enough for most companies today. They do not need to change what is;
they need to create what isn’t. This is discontinuous change. For example,
when mobile telephony moved from voice communication to add
data communication, and as both voice and data communication
become virtually free, there is a sea change not only in technology,
but in sales and marketing, revenue models and so on. There are
additional challenges with further changes in technology such as
VOIP, WhatsApp-based voice communication and so on.
Discontinuous change occurs when the environment undergoes
some radical shift, a changed paradigm. This is not an extension of
what has happened before and involves radical transformation
of the whole organization, discarding most of the past. Since
the objective is to bring change in all parts of the organization,
its strategy, formal and informal organization and people, it
requires the destruction of some elements in the current system.
In the words of Picasso, ‘Every act of creation is first of all an
act of destruction.’ Here the cultural issues are felt much more
strongly, and there is a great deal of concern with what would
happen to existing relationships, power structures, people, systems,
 Anatomy of Change  19

positions, channels of information sharing and so on. Because of

its multiple initiatives, depth and scope, this usually takes more
time, anywhere between three to five years, depending upon the
nature of change and the complexity of the organization. It involves
multiple transition states, which may even be distressing, painful
and demanding on the organization and its people. Sometimes it
may not even get completed as short-term goals, which look very
attractive, shadow the long-term objective of change. In such a
situation, new issues gain priority, necessitating change managers
to readjust their initiatives and redefine their objectives during the
process of change. It cannot be delegated, and must be led by
the chief executive officer (CEO). Given its scope and depth,
leadership becomes a necessary and critical element for success.

Incremental versus Radical Change

The size of change has important ramifications on the change man­
agement strategy. Just like in boiling frog syndrome, where a frog
rather dies despite continuously rising water temperature instead
of jumping out, as compared to a situation in which it immediately
jumps out of, it is put in boiling water, people adjust to incremental
changes without significant resistance, whereas radical change is
most likely to invite significant resistance. It is, therefore, necessary
that the organizational leadership needs to ask itself on the gap
between current and desired state and the degree of departure from
the current state before formulating a change management strategy.
Although we have listed different types of changes above, these
distinctions are getting blurred in the present era. The speed of
change, particularly in the digital field, is so high that the organizations
need to be constantly embracing changes that would have been
classified differently, in order to survive and grow. It is increasingly
becoming debatable, for example, whether a change is strategic or
operational, or continuous or discontinuous.
 C hapter
3
Changing Organizations

If you don’t like change, you’re going to like irrelevance even less.
—General (Ret.) Eric Shinseki

India’s largest automobile company, Tata Motors is a classic case

of how the group reinvented itself.7 They were predominantly
manufacturers of commercial vehicles. Shrinking of Indian
commercial vehicles market by 40 per cent led to a loss of `5 billion
in 2001. This shook them up and they decided a three-phase six-
year recovery strategy. The first phase focused on stemming the
bleeding, followed by the second phase aimed at consolidating
their strength in India. The third phase planned to expand
internationally.
In the first phase, they brought down the break-even from
two-thirds to one-third of capacity utilization, so that they would
not incur a loss even with 40 per cent shrinking of market. This
was done with the massive induction of information technology
(IT), apart from other things. The second phase concentrated on
bringing out new products suited to the Indian market to fire up
consumer imagination. Nano was one of the results of this effort.
The third phase included Tata’s acquisitions and tie-ups
across the globe from Tata Daewoo in Korea, to Spanish bus
manufacturer Hispano Carrocera to Jaguar in the UK, Land Rover
in the United States, Thonburi in Thailand and so on. Today, they
have a robust presence in 50 plus countries, in all the continents.
22  Alchemy of Change

The same adaptability characterizes the entire Tata group.

Founded in 1868, it is not only one of the oldest groups, it has
operations in 80 countries and is recognized as the 13th most
innovative company in the world, besides being India’s most-
admired business group.
In 1997, Netflix disrupted the entertainment industry by offering
monthly rentals to customers so that they could avoid late fees
payable in their previous arrangements with traditional rental
companies. With the advent of YouTube, the way customers
consumed video had changed. Netflix survived and beat the market
again in 2007 by offering streaming services.
HMV reinvented itself by packaging its library of thousands of
songs into a radio-like digital product, Saregama Carvaan.

Survival of the Most Adaptive,

Not the Fittest
The emerging world is a world of competition and the basic philosophy
now is the survival of the most adaptive. Organizations, therefore, trying
to sustain competitiveness in today’s aggressive markets have to
successfully manage internal change for gaining a competitive edge.
Although change may be disruptive, organizations feeling the heat
of a competitive environment understand that they have no choice.
The pain of remaining in the current state shall be more severe than
the pain involved in implementing change.
Why have some organizations succeeded while others have
failed? Organizations that have learnt how to manage change
effectively are continually looking forward, not backwards. They
are taking control of the future by regularly evolving new ways
of doing business, building new core competencies, creating new
markets, bringing out new product concepts and thus continually
changing the rules of the competition. This cannot be done unless
they are willing to change and move from where they are today.
We are living in a period of major organizational changes.
Corporations are significantly downsizing, re-engineering, working
out new strategies and processes. During the last one decade,
 Changing Organizations  23

we have been bombarded with a large number of seductive and

contradictory ideas for ensuring corporate success in a changing
world—total quality management, empowerment, re-engineering,
just-in-time, total plant maintenance, kaizen, flexible employment,
5S, benchmarking, self-managed teams, employee stock options
plan, voluntary retirement scheme, knowledge management,
learning organization, six-sigma, restructuring, design thinking,
agile organization—the list goes on and on.
New markets appear while old and reliable ones vanish. As
customers have become sophisticated and demanding, the shelf
life of products and services is getting shorter. The customer
determines obsolescence, not the manufacturer, and this reality
cannot be overlooked.
Ever since the floodgates of competition have been thrown open,
Indian companies have been forced to re-examine their customer
relations, quality parameters, distribution network, technical
and managerial capabilities and processes, and organizational
structures. With globalization and the consequent integration of
economies, there is a greater emphasis on price, quality, innovation
and satisfaction of customer needs. They have rather become the
guiding principles of competition. Rapid and widespread diffusion
of technology, freer movement of capital brought about by a
single goods and services tax in the country, increasing focus on
transparency and digitization and so on have changed the rules of
competition, suddenly forcing companies to expand globally. New
systems, technologies and processes have shortened product cycles.
Due to advancement of technology and entry of new tech-savvy
millennial generation in the workforce, the softer aspects of the
workplace are also being influenced. The way we work, the way
we interact with each other, the age-old attitudes and mindsets are
being discarded everywhere. Traditional management styles based
on rigid hierarchical structures and highly controlled information
sharing are ineffective. Instead, a new management style is
emerging that is more open, flexible and decentralized.
Any industry or organization that fails to take cognizance of
changes around it, such as changing consumer preferences and
attitudes and lifestyles, social and political climate, changing
24  Alchemy of Change

employee aspirations, modern technology and processes, has to pay

the price. Textile and jute industries in India, which failed to keep
pace with the changing times, are classic examples of this syndrome.
Each organization is different in terms of structure and design,
technology, work culture, management styles, resources, employee
expectations and attitudes, work processes, customer needs and
complexities of the operating business environment. A change
technique that works in one organization may not work at all in
another organization with similar culture and within the same
country. Any change, therefore, has to be introduced keeping in
mind the people, the complexity, uniqueness and the culture of an
organization.
Our management sciences are heavily influenced by Western
concepts and practices. While importing technology, we also tried
to mindlessly import their management systems. If one system or
concept works well in one culture, it is not necessary that it would
be successful in another culture as well. Since countries in the West
are more advanced, and basic concepts in most cases are universally
applicable, total rejection of Western concepts and techniques
would be an overreaction. However, it must be remembered that
systems and practices are developed keeping in mind the specific
cultural needs of the society, and because of the vast cultural gap,
outright transplantation of Western management systems cannot
(and has not) succeed(ed). We should adopt what is appropriate
for us and supplement it with learning, specific to our context and
culture. Unfortunately, people often talk about this issue only in
clichés.
We should never believe that the changes we have been able to
bring about are the end of the journey of change. There is always
another wave breaking on the shore.
 Part II
Experiences of Change
 C hapter
4
Mega Corporation:
Challenging Old Paradigms

The Mega Corporation group ranked among the leading Indian

conglomerates, with significant presence across its multi-brand
businesses. The group has many modern manufacturing facilities in
northern India and an extensive marketing network spread across
the country. Mega Corporation has many subsidiaries and associate
companies, and competent and path-breaking joint ventures with
global leaders.

The Downfall and the Triggers

At some point of time, the group found it difficult to respond
positively to the changes in the economic environment. The group’s
turnover at this juncture was around `3,000 crores, with a workforce
of more than 15,000. The group was gradually losing market in all
its products because of its deeply engrained and stereotypical work
culture. The two major products of the group had lost substantial
market share during last seven to eight years. In one product, the
share came down to 14 per cent from 40 per cent, and in another
major product, it came down to 17 per cent from 25 per cent.
The percentage of labour cost to turnover was almost two to
four times high, as compared to the competitors. The productivity
28  Alchemy of Change

comparison was no different. It was the lowest in all products, as

compared to all the competitors. Labour cost being abnormally
high and the productivity very low, the writing on the wall was very
clear for the group. It was time for the group to face the reality,
especially in view of the fact that many new multinationals as well
as domestic competitors were preparing to enter the market soon.
During the late 1990s, the management conceded that the
external environment had become very competitive and many
international players were in the process of setting up manufacturing
units, which promised to produce superior products at reasonable
prices. It had, therefore, become imperative to reduce cost and
improve quality so that it could face the emerging competition.
In addition to regular workforce, there were more than 3,000
casual labourers. These casuals had to be engaged against such workers,
numbering hundreds, who had not been working at all, being either
leaders of the union, ex-leaders and undesirable characters, on
whom management had no control. Casuals were also required
to complete certain jobs left incomplete by the regular workers
or refused by them, being heavy in nature, or required to assist
the regular workers either for material movement or for machine
operation. In normal course, all these jobs were to be performed by
regular workers, but the management was feeling helpless and was
compelled to get the job completed through casuals.
In addition, there were hundreds of employees in the category
of staff and supervisors who were highly skilled workers in the past
but were now promoted based on seniority. Having no supervisory
potential and yet being promoted, they were not prepared to work
on machines any more. In the process, the company lost them
as skilled workers and gained poor supervisors. All such people
therefore were almost idle.

Charity, Not Business

Overtime (OT) was another factor that destroyed the work discipline.
In spite of over manning and engagement of casuals to the extent of
 Mega Corporation: Challenging Old Paradigms  29

49 per cent of workers’ strength, grant of overtime was a common

practice. In fact, it had been the main bone of contention and,
many a time, long work stoppages and strikes had to be faced on
the issue of grant of overtime. Interesting devices were evolved to
create situations whereby grant of overtime became a necessity.
There was nothing that the management could do to stop or curtail
unwarranted overtime. In case only a few workers were needed to
stay on overtime to complete a certain job, they would refuse
to stay unless the whole department was put on overtime. Indeed,
the charity overtime or industrial peace allowance was necessary
for running various manufacturing plants.
Another charity was in the form of incentive payments, under
various schemes. All the incentive schemes were linked to certain
ad hoc and negotiated figures of production and not on industrial
norms. These schemes were introduced from time to time,
separately in different product divisions to achieve higher levels
of production, against negotiated amount, through a table giving
figures of production over and above the existing figures and the
amount admissible.
Concession given in any plant, legitimate or otherwise, had its
immediate repercussions in all the plants of the group. Although all
the product divisions were independent companies, with separate
board of directors and management, and a few with the joint
venture partners on the board, the demands and facilities agitated
for and ultimately obtained were similar. Though the management,
products, market, competition, manufacturing process, labour
cost, business plans, profits and the issues faced by these different
companies were different in nature, there was a tradition to have
a common settlement, with similar wage and benefits across the
group. The union, which was one for all the group companies,
never agreed for business-specific separate settlements and benefits.
Collective bargaining towards a common package, against an ad
hoc rise in production, became the norm. This was being objected
to by the foreign partners in many companies, and because of
such unrealistic wage structure and costs, a few companies were
gradually being driven to closure.
30  Alchemy of Change

Indiscipline
Indiscipline was rampant and embarrassingly showing the group in
very poor light within industry peers. Hundreds of workers, leaders,
ex-leaders, undesirable characters, sick and non-performers were
not working but drawing full wages, incentives and overtime, as
admissible to other workers. In such cases, they even managed
their attendance, sometimes, without being present, for days at
a stretch. There was no check on late coming, and anyone could
enter any time and leave anytime. There were many who did not
return after lunch, but it always went unnoticed. In a few plants,
even the working hours were reduced on flimsy grounds, to allow
the workers to come late and go early. During night shift, all
manufacturing units were fast asleep by 2 am after completing the
targeted production. No change in the manufacturing process or
shifting of any machine was allowed unless additional money was
given.
Neither could any worker be transferred from one place/
machine/department/job to another. It was impossible to take
any disciplinary action, even for major misconducts, as it would
immediately result into work stoppage, and the management
would backtrack, under compulsion. Even if a charge sheet was
issued for a major offence, and the charges proved, an apology
was accepted under pressure from the union and the workers
were let off practically unpunished. Dismissal was unheard of.
The approach had always been to focus on immediate results
and production numbers at all cost, without any consideration
of long-term health issues, processes, quality, discipline, final cost
nor for the company’s repute. There was no fear of punishment
and the management was so helpless that sometimes workers even
did not pay for tea, snacks and so on for months together and the
management could neither stop service nor take any action. No
subcontracting of any component was possible as it was feared that
this would immediately result into work stoppage. There was a total
environment of rowdyism.
The management had no control over the unionized workers. Even
for allocating machines to workers, it had to seek the permission
 Mega Corporation: Challenging Old Paradigms  31

of the union. The union resisted any move by the management

if it adversely affected the interests of even a single member. In
case of any conflict between the union and departmental head,
the personnel department intervened and tried to find solutions.
However, they would end up persuading the department head to
agree with the union and advising them to stay in their good books.
One senior government official once remarked that ‘the
management and control of the company has been contracted to
the union and company management has lost the right to manage.’
Managers had lost hope of ever getting an opportunity to
manage. The whole cadre either had withdrawn or was frustrated.
They had lost faith in the management as it had always backtracked
and never held its ground. They felt that they were duty bound to
maintain peace at any cost and meet production targets. To achieve
this objective, they maintained good relations with the union leaders
by appeasing them and used them to solve their problems at the
shop floor. Everyone went out of the way to keep leaders happy so
that the show could go on. A few managers even started business
with the company, directly or indirectly, resulting into various
malpractices and supply of poor quality of components/material.

Steering the Change

The chairperson of the group entrusted the task of bringing
change to the newly inducted group HR head (change facilitator).
Incidentally, there was no focused and clear vision from the
chairperson, just some ad hoc statements. In the circumstances,
the facilitator had to start the process of change with a broad
framework of objectives. Large, discontinuous change in the
organization is brought about not just by a single leader, but through
a larger set of key personnel who make crucial contributions to the
planning and implementation of change.
The change facilitator, therefore, thought of forming a change
management team, the core group, consisting of five heads
of various businesses, to create a new vision for the group, a
compelling picture of what the organization wants to be and where
32  Alchemy of Change

it wants to go. It was the foremost task to carefully craft the vision
after taking stock of the organization’s culture and its environment.
These business heads were independently looking after
their businesses, without any coordination, among themselves,
though part of one group. All of them were busy in ‘somehow’
achieving production targets and trying to fit in as per the boss’s
requirement. In the process, workers/union were being appeased
by extending benefits, creating chain reaction in all the other
divisions of the group. These businesses were being run by the
respective business heads as their own empires, without any formal
or informal consultation or coordination and without any joint
responsibility for all the businesses of the group, and thus lacked
the pragmatics of a group identity. However, individually they
all seemed concerned about the state of affairs and fast-changing
business environment.
It was necessary to align the total core group with the singular
and dedicated goal of change. The change facilitator personally
reached out to all other five members of the core group with a
message that the task may be difficult but not beyond reach. It was
incumbent on them that they identify a specific set of problems and
opportunities, have a common understanding of why and how the
environment within needs to improve, and are able to identify,
develop, mobilize, align and orchestrate the various in-house
sources of energy. They needed an elaborate plan of action to
neutralize the sources of resistance.
The focus was on collective efforts of leaders of various business
units—the core group. With their management and leadership skills
pooled together and used collectively, it was reassuring to know that
an appropriate strategy for change and its effective execution was
now a definite possibility.
These five top executives, along with the change facilitator,
forming the core group of six had a two-day off-site meet to have
an honest review of the situation for proper diagnosis and giving
a shape to the vision for change and the proposed plan of action.
Everyone was fully involved and it was decided to first lay down the
ground rules for the functioning of the core group, which included
absolute confidentiality, an open mind, mutual trust, transparency,
 Mega Corporation: Challenging Old Paradigms  33

information sharing, regular interaction and staying true to the

group’s vision.

Taking Baby Steps

The first step in any change process is an assessment of the environ-
ment to identify what organizational conditions need change. The
core group, therefore, first analysed the situation and then suggested
a diagnosis, thereby identifying reasons for the present situation.
This was a very honest diagnosis where the business heads openly
accepted that they have been only concentrating on the numbers
without any concern for managerial processes and not taking cog-
nizance of the impact of their decisions on other businesses.
It was time, now, for the core group to give a greater definition
to the purpose, scope and desired outcomes for the change effort.
Understanding where we are, why there must be a change, how
far reaching it will be, and what the ultimate goal is, are critical
components of change process. Having analysed the present
situation and completing its diagnosis, the next logical step was to
draw a detailed picture of the future, a wide-angle photograph, on a
different set of basic assumptions, describing the scope and scale of
change and as to how the organization would look like after change.
The core group, after due deliberations, took a view on desired state.
Having defined the scope and desired outcomes of the change
effort, it was now easier for the core group to crystallize the vision
for change comprising elements of a notion of the way the company
needs to be organized to make the most of the market opportunity.
The core group accordingly finalized the vision, as follows:

To become India’s most successful company through world-class manufacturing,

right work culture and an environment where energies could be diverted,
channelized and utilized for growth.

The core group, moving forward from the stage of crystallizing the
vision for change, was engaged in designing the change programme
and the strategy. The vision statement laid down the purpose of the
34  Alchemy of Change

organization, highlighted the need for right work culture and gave
guiding principles and values. It was now time for the core group
to draw a road map to show how to reach the goal.
The approach focused on the development of work culture
based on trust and collaboration amongst all employees through
change in attitudes, beliefs and values, empowerment at all levels,
especially first-level managers and supervisors, and pursuit of a
long-term, consistent and fair policy devoid of ad hoc solutions
and appeasement. The objective of new work culture would be
to unleash and synergize the energies of all the employees of the
company towards achievement of common goal and vision.
Unlike the previous settlements, it was planned to use the
proposed settlement as an instrument for change in work culture,
adoption of industrial engineering norms and new work practices.
The basic theme of the previous settlements used to be a certain
increase in wages against a negotiated increase in production,
which inevitably led to suboptimization of resource capacities and
continuation of traditional work practices, resulting in higher labour
cost and low productivity.
Traditionally, wage settlements were perceived to be the only
instrument of bringing change, and as the existing settlement was
due to expire shortly, it was considered prudent to lay maximum
emphasis on the next wage settlement. The core group, therefore,
laid down the objective of the next settlement. There was realization
that it would be difficult to get employees’ support for the proposed
change in work culture without offering something in return, the
group prepared itself for negotiations.
It was considered necessary to develop a common approach to
issues such as developing positive attitude, developing managerial
and supervisory skills, sharing common vision and values and
proper integration of inputs with the transformation strategy. It
was, therefore, considered necessary to strengthen training and
development activity for need-based inputs to various categories
of target groups, namely, top management, middle management,
supervisors, HR heads, security heads, union and workers.
Certain preparations were considered necessary to be made
before launching the process of change and start of negotiations
 Mega Corporation: Challenging Old Paradigms  35

with the union for the settlement. These included compilation

of data on competitor’s productivity and best practices, laying
down manning and production norms through various studies
and benchmarking, developing proper inventory of manpower in
terms of skill, age, qualifications and so on, strengthening chain of
command right up to the first line of supervision, and finalizing
various systems.

One team of industrial engineers and HR specialists was recruited from outside/
drawn from other parts of the organization to work full time on collection and
collation of these data from across industries, industry associations and so on
in all sectors in which the group was operating.

As a critical strategy, the core group thought it was imperative to

draw people out of their comfort zones and develop support for the
change programme. The need to create a shared vision was given
more weightage than consoling those who might be apprehensive
towards change. Reassuring those who may be afraid of change
may often prevent the process of change and, therefore, it was
considered necessary to create a shared vision amongst people.
The first step towards a shared vision was by way of involving
the operation heads of various business units, the key people, next
in command to business heads. The approach of the workshop
for operation heads was participative, making them partners in
planning and creating the strategy for change. Commitment to
vision or developing a shared vision becomes easier if people
participate in planning and implementing the change programme,
on the principle that people support what they help create.
In Mega Corporation, the managers felt helpless and had almost
lost their right to manage because the union was powerful. It was
felt that if these managers, through the change process, could see
light at the end of the tunnel, which meets their needs and values,
most of them would deal quite well with the change. The top
management, that is, the core group members, interfaced directly
with the managers of all divisions to provide clarity, initiate a debate
and encourage managers to develop their own responses specific
to their own business roles. They were encouraged to challenge,
36  Alchemy of Change

question and learn, continuously refining and committing them­

selves to the vision and the process of change.
As per the management’s strategy, the forthcoming settlement
was the main instrument of change, which had to be negotiated with
the union. With the day-to-day increasing operational pressures,
with liberalization, trade unions are required to find solutions
for complex problems hand in hand with the management. The
union must work as a collaborator and not as an alternative power
centre, especially unions which have internal leadership, as was the
case with Mega Corporation. Collaborative union is best where
union leaders collaborate with the management, retaining their
credibility with the workers, and the workers are convinced that
the management was fair. Mega Corporation’s case was altogether
different where the union, taking advantage of management’s
weaknesses, had been exploiting it for undue benefits, and the
management had been appeasing the union for decades.
It was, however, time to raise the heat and wake the union up
first. It was necessary for the union to feel the extreme level of
emotional tension before they were prepared to change. This was
possible only through a clear understanding of realities and the likely
scenario if they fail to face the reality and wake up. Accordingly, a
few informal meetings took place with the union for an evaluation
of the business environment vis-à-vis our preparedness to compete.
The union had a key role to play, and it had to be convinced
about the need for change through hard evidence and data. For the
union to share and support the change, it was necessary to analyse
the situation thoroughly. Accordingly, the scenario and all hard-
hitting data were presented to the union leadership by the concerned
business heads. To ensure complete appreciation of the situation
amongst the union leadership, the data included business scenario
vis-à-vis competition, present position of the company and future
business plans. Also embedded in these data was the fact that how
imperative the correction of and cooperation from the workforce
was for the survival and growth of both employees and the company.

In order to soften the union resistance, repeated communications about the

current situation and imperative for change were also made to first-line
 Mega Corporation: Challenging Old Paradigms  37

supervisors in Hindi, which inevitably travelled to workers at large. This

helped in building the ground-level perception that change was urgently needed
to protect jobs.

Green Shoots
After these meetings, there was a palpable buzz and the feedback
was positive and encouraging. Extract from a letter by one senior
manager to the change facilitator read as follows:

It was a real pleasure listening to your down to earth views

which came like whiff of fresh breeze—change can never be
thrust down on people but has to be faded-in gradually so
that enough adjustment time is provided—we have started
with uncorking the bottle to release pressure and providing
ample opportunities to people to unwind themselves and
express their views and concerns. This process has helped
them to de-steam themselves of years of pent-up feelings. As
a result, many issues have got thrown up which have helped
us to do introspection and take timely corrective action,
wherever feasible. People have been encouraged to express
themselves without inhibition and fear. This is, however,
just the beginning and a lot needs to be done. We are confident
that with your active support and encouragement, we shall be
able to give practical shape to our dream of instilling pride in
people to be a part of the ‘Mega’ family.

Over time, predominance of unions’ influence in policy decisions, particularly

with reference to welfare and discipline, chain of command had become
emaciated with inversion of power relationship at the first level of management.
Supervisors and first-line managers used to feel powerless while dealing with
workers earlier. Regular communication and training at this level energized
these managers and supervisors. Similarly, team-mirroring workshops were
held to enhance alignment and trust level between shop-floor managers and
HR function. All these efforts led to greater cohesion and unity of purpose in
the entire management team.
38  Alchemy of Change

With core group meetings, training programmes, presentations

to the union, and communication meetings all around, everyone
started sensing some change in the air. Lots of fears, doubts,
suspicions, apprehensions started vibrating in the environment.
Resistance to change does not have anything to do with bad
will. It is human nature to resist change. We want things to stay
the same, thinking that change will be bad for us. The company
faced strong resistance from the workers. There was no reason
for the workers of Mega Corporation to support change as they
were comfortable in the existing environment. There were work
stoppages, strike and breakdown in negotiations. However, with
handling resistance at various stages of change, having repeated
and focused communication, promoting teamwork and learning
culture, practising value-based behaviour, and total transparency,
the company could succeed in bringing about change in their five-
decade-old culture.
The change brought an end to unproductive malpractices.
Improvement in productivity ranged from 30 to 70 per cent, while
reduction in wage cost per unit of production was between 10
and 30 per cent. The workforce was reduced by 26 per cent, and
overtime payment came down by 75 per cent. All the malpractices
related to either discipline or productivity were removed and a
transformed, productive work culture was established.

Mission Accomplished
There was a drastic change in the work environment after the
implementation of the agreement. Now each worker was producing
a much larger quantity than what he produced earlier. All workers
worked diligently for eight hours in order to achieve the required
output. The management obviously felt triumphant. A new work
order had been established and the management had complete
control over its affairs. This was also the time to demonstrate
that the change brought about is not just for survival but also for
growth and a better life. To ensure that the workforce feels safe
and see a better and healthier future for themselves in the new
 Mega Corporation: Challenging Old Paradigms  39

work environment, the managers of all the business divisions were

briefed by the core group members about the humane side of the
management and that the workers need to be handled with a touch
of care and compassion.
The memorandum of settlement described the management’s
and union’s dharma and statement of commitment. The management
called for accountability and performance from managers, involving
them fully in solving workers problems. The overall improved
performance, as a result of change, helped the company improve its
market share and image in almost all the businesses. As reported by
a leading business magazine, the company had powered ahead from
the fourth spot to the second in the industry in the first five months
immediately after the change.

There were indeed a few hiccups, as is perhaps inevitable in such large-scale

change. For example, one business head reneged on his commitment and started
resorting to old practice of using sops for short-term gains. However, these were
minor blips and the group continued on course to greater gains.

The group chairperson mentioned in its annual general meeting

that ‘the cultural transformation will afford the company
greater operational flexibility in resource utilization and higher
productivity. The company has now achieved a much healthier
business structure and is now ready to attack the markets with
new vigor.’
 C hapter
5
AG Corporation: A Change
that Reinvented a Corporation

Established in 1970, AG Corporation is a medium-sized engineering

company located in the central part of India. It employs around
450 qualified professionals and skilled workers. The company is
accredited with ISO 9001-2000 and is renowned as a specialist
in the field, producing international quality products with wide
market acceptability.
Besides being a quality producer, the company had a good order
book and an immense growth potential. Up until now, it had done
very well; however, recently a feeling of insecurity and demotivation
had crept in. Employees, including managers, were not paid salaries
continuously for three to four months. Sometimes there was no cash
available even to meet petty day-to-day expenses. Suppliers either
stopped delivering or provided material at their terms. This affected
the manufacturing activity as well. In these circumstances, it was
only the owner and CEO of the company who stayed determined
and strived to find solutions.
He had started this company in 1970 after having worked briefly
in a tool manufacturing outfit. He chased his dream and set up
this unit to develop quality substitutes indigenously, which would
replace imported tools and parts in the Indian market. He gained
repute and record for industry-best technology and engineering
excellence. For the first five years, he managed to generate good
42  Alchemy of Change

revenues, without borrowings. In due course, the company diver­

sified and, in turn, became the sole supplier to larger outfits.
Having worked closely with people at the shop floor during the
initial stages of business, the CEO had a personal connect with each
employee and was held in great respect. A God-fearing human
being, his compassion and moral standards made him a favourite
in spite of his own management style and weaknesses.
With his willingness to experiment and take risks, the CEO’s
commitment to innovation ensured that the company’s products
developed through in-house R&D, right from scratch. He believed
that innovative solutions were as important as carrying people
along, because a strong team is an essential prerequisite for success.

Solitary Reaper?
Ironically, such a firm believer in teamwork had no team to
support him. His top team members, of the level of directors, were
uncomfortable with his style of functioning, and mistrust was high.
The gaps had so widened that all decisions and actions were seen
with suspicion. One director felt that the company had tremendous
potential but it needed strategic direction and vision which was not
forthcoming from the CEO, who was running the business on his
personal whims and was not open to suggestions.
Another director also expressed similar views, painting a very
dark future of the company, with no hopes of revival, and expressing
serious concerns about his own future and that of his family. He was
equally bitter about the CEO’s style, saying that he was in habit of
taking independent decisions and doing everything himself.
Contrary to these feelings, the CEO felt that these top executives
do not feel accountable, neglect their responsibilities, do not support
and guide their team members, and always look for scapegoats in
others, for their own failures. It is under these circumstances that
he himself has to follow up the progress and stay hands-on.
In today’s fast-changing environment, constant and strategic
realignments of an organization’s culture, management processes,
tools and techniques have become a necessity. So, while the CEO’s
 AG Corporation: A Change that Reinvented a Corporation  43

main focus was on arranging working capital for day-to-day

operations, he could never free himself from the manufacturing
and commercial preoccupations.

Therefore, he brought in a change facilitator to assist him in the renewal and

realigning efforts. Story of this change effort is, in fact, the story of strong
sponsorship of CEO and value-based leadership.

Situation Analysis and Corrective Actions

A situation analysis revealed that there was no role clarity, and
people did not feel accountable. Information was not communi­
cated and shared, managerial and supervisory cadre was confused
and demoralized, and a sense of insecurity prevailed all around.
Employee turnover was quite high and workers were dissatisfied
over anomalies in salaries. Nothing seemed to be moving without
a follow-up from the CEO and the company was being run on a
crisis mode on a day-to-day basis.
There was hardly any system for rewards and performance
management. Rewards were decided by a few top executives,
without involving the respective department heads. This had caused
general dissatisfaction among employees.
The situation at shop floor was no different, where the productivity
was very low, with material wastage and rework amounting a
whopping 40 per cent. Departments such as maintenance, planning
and materials created additional bottlenecks for the shop floor. In the
absence of reviewing and monitoring processes for operations and
performance, almost every activity needed follow-up from the CEO.
The situation analysis established the need for immediate
interventions for discontinuous change. It needed a top-level and
committed management team for driving the interventions. A
substantial time was spent on resolving interpersonal issues with
the senior management, which led to fears, suspicions, doubts
and apprehensions about each other. Added to this was the
absence of communication, which had only widened the gaps.
With counselling and face-to-face open discussions with the whole
44  Alchemy of Change

senior management group, bridges began to appear between

individuals and the team. Things started looking brighter, a
beginning of new trust-based relationship, with transparency and
open communication seemed to be getting established.
The CEO and ED, along with the change facilitator, met with
heads of departments to share and discuss the change agenda, which
consisted of restoring shattered confidence and developing positive
attitude through teamwork, focused communication and system
support. The company had tremendous potential, and these heads
of departments were motivated to take the ownership of the change
agenda to bring the company back on track. These meetings later
became a regular feature for reviewing and discussing future plans.
The CEO attended regular communication meetings, which
had a trickledown effect on the heads of departments, who started
sharing information with their respective staff. He even addressed
workers sharing the company’s dreams, intent and efforts with them.
ED started conducting regular weekly meetings of heads of
departments for reviewing the manufacturing performance, looking
into bottlenecks and promoting networking and collaboration.
The core group of top five executives started meeting every
day for one hour to discuss strategic issues relating to business
and operations, take vital policy decisions and monitor their
implementation.
Vision, mission and values of the company were finalized
through a two-day workshop conducted by change facilitator, with
the help of an external trainer, and attended by top management
and heads of departments. The strategy to institutionalize them was
also worked out and implemented. Teambuilding workshops based
on Belbin framework and trust exercises were also conducted for
bringing about greater understanding and cohesion in the top team.
Increments and rewards were given through a newly introduced
performance management system, with defined roles, responsibilities
and key result areas. The process of rectifying anomalies in salaries
was initiated.

The organizational structure was changed by defining new roles and

accountabilities and promoting the deserving talent.
 AG Corporation: A Change that Reinvented a Corporation  45

When the situation looked grim due to instances of neglect or lack

of trust, honest and open discussions and counselling were held to
tackle the situation.
Sometimes, change efforts would take a back seat either due
to day-to-day crisis or due to a casual approach. The delinquents
could, however, be brought back on track by highlighting the
importance of change for the future of the company and, thereby,
their own.
Regular feedback from CEO, ED and others on such issues as
incidents of neglect, important developments, behavioural and
attitudinal responses, lack of responsibility, coordination, areas
of concern and interpersonal issues helped in making timely
interventions.
A new agreement was signed with the union, resulting in
improvement in productivity, elimination of wasteful practices,
laying down new production norms and introducing a new
incentive scheme. New work practices such as multi-skilling, multi-
machining and so on were also introduced.
An exercise was undertaken for identifying untapped potential
in managerial and supervisory staff to help chalk out their career
growth within the organization. A two-day outbound training
programme on teamwork and leadership was conducted for the
top team, while many other need-based programmes were con­
ducted for managerial and supervisory staff. Workers were trained
for TPM.

Mission Accomplished
Celebrating success and small wins became a regular feature at the
beginning of all monthly communication meetings chaired by
the CEO. Top team and managers felt that changes were quite
visible in the attitude of people and that things were moving in
the right direction. They became optimistic about the future
of the company and started motivating people in their depart­
ments. The CEO also felt that he has now plenty of time for
strategic thinking instead of firefighting and follow-ups and that
46  Alchemy of Change

the company is now seeing smooth functioning and good times

after three years.

Today, the turnover of the company is five times as compared to the time when
the change efforts started and the net profit has grown 15-fold. The management
feels that the organization is prepared to meet any challenge now.

The CEO was open to feedback and prepared to change. He was

once overheard saying, ‘You cannot change others without first
changing yourself.’
 C hapter
6
Akash Industries: Lip Service
Does Not Bring Change

Akash Industries is a large pharmaceutical company located in

northern India. Though set up hardly a decade ago, it has evolved
into a fully integrated pharma company, with state-of-the-art
manufacturing facilities. The company has six manufacturing
plants, employing around 5,000 people, with highly integrated
portfolio of products for the pharmaceutical and health care sector,
with a customer base across the globe including several blue-chip
organizations. It has WHO GMP certificate ISO14001:2004 and
many international accreditations.
The company is managed under the direct supervision and
control of the owner CEO. He is involved in day-to-day decision-
making and managing the business quite successfully. The CEO is
a God-fearing, compassionate and caring person with high moral
values. Having worked closely with people during the project stage,
he knew most people personally and commanded great respect
from one and all.
He would take personal interest in organizing two family get-
togethers each year: on Independence Day and Republic Day. This
was a regular feature, attended by six to eight thousand employees
and their family members. These get-togethers were loaded with
entertainment programmes and a variety of food. The CEO
would personally meet each employee and family members and
48  Alchemy of Change

would mix with them in most informal environment, including

on various festivals and pujas, a normal practice in the company.
Valuing relationships has earned him great respect and fondness
by one and all.
During discussions with the change facilitator, the owner CEO
laid out his expectations of a corporate culture of excellence, with all
systems and policies in place and where roles and responsibilities at
senior levels are well defined and where people feel so accountable
that he is not required to look into day-to-day issues.

Situation Analysis
The first step in any change process is an assessment of the
environment, organizational culture, values, processes, compe­
tencies, systems and so on to identify what conditions need to be
changed.
Situation analysis revealed that many senior positions at the
level of plant and departmental heads were manned by unqualified
people who, being old associates, enjoyed the confidence of the
CEO. They had been with the company from the very inception
and learnt the nuances of their job at the workplace itself. This group
had neither any managerial or leadership qualities nor any exposure
to the outside world. Some of these senior executives had to be
provided with additional staff to operate their personal computers,
check mail and send replies, as these executives were not technology
savvy. Most of these executives were not fluent in English either, and
this hindered their communication with multinational customers.
Their leadership capabilities were mostly below average: due to
lack of either competency or the organizational culture that did
not believe in developing capabilities. The CEO, a dedicated and
hard-working person, was aware of the pressing need for developing
leaders within the company, but never gave enough attention to it.
The CEO often dealt directly with junior employees in all
functions and plants, bypassing the hierarchy and thus creating a
communication gap. During meetings the change facilitator had
with various individuals and groups in the manufacturing plants,
 Akash Industries: Lip Service Does Not Bring Change  49

many junior executives mentioned that they reported directly to the

CEO as well as received directions from him without the knowledge
of the plant head. He himself reviewed the performance of all
the plants periodically wherein many important decisions were
taken to bring about improvements. However, in the absence of
any follow-up mechanism, these were easily forgotten and brushed
aside once the meeting was over.

At another level, the CEO used to conduct meetings with senior executives, called
‘Mission Excellence’, every six months.

People were expected to come out with their free and frank views
for improving organizational effectiveness towards ensuring
excellence. Besides this, various committees with specific tasks were
also formed from time to time, but soon after the first meetings, all
these efforts used to fizzle out due to lack of follow-up. There was
intent, but no system to support it getting translated into action.
Frequent change in the organizational structure was a common
feature. Roles and responsibilities of people, especially at the
senior level, were added or discarded by the CEO for reasons best
understood by him.
There was no delegation of authority, and each decision was
taken by the CEO himself, including approval of small value
purchase orders or signing cheques. People at all levels were used
to and happy running to the CEO for every small issue. Plant and
functional heads had no say even in the selection of managers
and staff for their respective divisions as all selections were made by
the CEO himself. In the absence of any performance management
system and reward policy, the heads could not recommend rewards
and promotions of their subordinates. All such decisions were taken
by the CEO himself.
Even the postings and transfers of staff in various plants/
functions were done by the CEO without any involvement of
concerned plant/functional head. There was a general perception
that CEO does not trust anybody and wants to keep all controls
with himself. Simultaneously, a lot of his time and energy were
being spent on unproductive or routine meetings.
50  Alchemy of Change

Most new appointments made by the CEO had to be terminated

for poor performance within a few months of joining, reflecting
on his poor assessment of people. Terminations were otherwise
also a common feature even for employees who had put in long
years of service. People could be terminated for minor lapses or
sometimes on baseless reports from those whose major lapses were
invariably overlooked. This created a feeling of insecurity amongst
all ranks, and everyone was trying to appease the CEO rather than
concentrating on their job.
Another important reason for insecurity and high attrition was
the behaviour of senior managers, especially the old associates,
who being unqualified themselves, could never tolerate a better-
qualified person working with them. They saw such people as
a potential threat, thereby depriving them of opportunities to
contribute and grow. The CEO wanted these senior managers
to find support and assistance in well-qualified appointees, but these
associates ensured their exit sooner or later. Suffocated in such a
frustrating atmosphere and having to report to staunch stalwarts
who restricted their growth, fresh joiners would choose to exit.
Forty to 50 per cent of these appointees used to quit within 6 to
12 months of their joining. The rate of attrition in senior- and
middle-level management was also high as they had no freedom
to perform and there was continuous meddling by the CEO. An
entrepreneur should choose the right kind of people to do the right
kind of job and then step back to let them function.
Workforce assessment was never done, and there was no
sanctioned workforce for any department. Overstaffing could
be seen in all areas. Extra hands were provided to complete the
production targets. Productivity was just 40 per cent of the industry
norms.
Interpersonal conflicts and absence of teamwork had become
a part of company’s culture. There were serious conflicts amongst
senior executives who were critical of each other not only during
private conversations but also in open forums. These conflicts had
an adverse impact on organizational effectiveness. The CEO chose
to overlook this important human relations aspect. In view of his
direct involvement in and control over all affairs of the company,
 Akash Industries: Lip Service Does Not Bring Change  51

he probably did not believe in teamwork. People at all levels were

individually delivering under fear and pressure.
The production department did not own the responsibility of
quality and considered it to be the responsibility of quality control
department. Each case of non-compliance with quality norms was
referred to the CEO. The focus has always been on bottom line—
achieving production targets with least concern for the processes.
Inefficiencies, wastages, higher cost, low productivity and bad
practices were tolerated for the sake of production targets. These
deficiencies had, thus, become part of the organization’s culture.
There were suggestion boxes where employees used to put in
their suggestions and grievances. The keys of all these boxes used
to remain in the CEO’s office, and no one else had any access to
these suggestions except the CEO himself. However, more than
suggestions, it was the CEO’s information gathering box. To top
it all, the CEO had also posted junior officers in each plant for
gathering details on day-to-day happenings and reporting directly
to him. These officers would attend all meetings conducted by
plants/functional heads and report detailed proceedings to the
CEO. Senior executives used to call it the ‘spying network’.
The HR department had a poor image, known for not helping
the employees, not looking into their problems/grievances and
working in a dictatorial style. It was just involved in routine work of
record keeping and salary dissemination with no understanding
of systems, developmental activities and creating a positive work
culture. Threats of being thrown out of the company by HR
managers and plant heads were a common feature. HR was
perceived to be the most ineffective department by one and all.

Action Plan
To sustain growth and profitability in today’s fast-changing
environment, most companies need radical transformation of the
whole organization, but this was not the case with Akash Industries.
It had a satisfactory record of growth and profitability. The need,
therefore, was of continuous or operational change relating to new
52  Alchemy of Change

systems, procedures, structures and management processes that

could bring greater organizational effectiveness and the company
could meet the challenges of the changing competitive scenario and
move towards achieving its goal of growth.
Accordingly, a detailed proposal and action plan was developed
for the proposed operational change. The action plan included
organizational structure; fixing accountabilities; identification
and filling up of organizational and operational gaps; potential
identification and development; monitoring, review and follow-up
mechanism; succession planning; developing new and fresh
talent; performance management and reward system; creating a
learning environment through information sharing and learning
forums; setting up systems in all functional areas; defining roles
and responsibilities for all positions; creating a forum of plant and
functional heads for cross fertilization of ideas and team building
across functions/plants; and finally developing a performance-
oriented culture of excellence where people are treated with respect
and care and they contribute their best to achieve organizational
goals.
The action plan was discussed with the CEO in detail, and it
was very encouraging to find that he agreed with all the points
in the proposed plan. Detailed proposals were worked out, with
strategies for implementation with reference to all areas covered
in the action agenda. The CEO thoroughly discussed each
proposal, seeking clarifications, arguing, reacting and reviewing
alternatives. Modifications, if any, as agreed to after discussions
were incorporated in the final draft ready for implementation. The
CEO would ask for the copy of the final draft saying that he would
go through once again and clear it soon for implementation. The
approach paper and draft policies were ready for implementation,
covering almost all areas mentioned in the action agenda but no
proposal ever got final go ahead for implementation, even after
continuous follow-ups and reminders.

With reorganization of HR department, introducing systems and formats for

timely actions, making HR managers aware of their role and responsibility,
and with constant monitoring and counselling, the image of HR changed and
 Akash Industries: Lip Service Does Not Bring Change  53

employees felt that they were getting help and grievances were being looked into.
There was positive feedback about the new environment in the organization.

Sponsorship Challenge
An effort was also made to implement the new performance
management system. The system was received well in the
organization as for the first time the managers and senior
executives got an opportunity to report upon their staff. The
recommendations for increment and promotion were compiled
based on these appraisals and given to the CEO for approval. The
benefits of the system were discussed with him while handing over
the recommendations. The CEO, however, completely overlooked
these recommendations, which were based on the data derived
from the system, and decided each case based on his personal
impressions about people. This was a big setback. This gave a clear
message that he himself was scared of change and was only giving
a lip service to it.
The CEO once mentioned, during discussions, that he wants
systems in the organization but cannot surrender his authority to
take decisions. Though being very open to feedback receptive, he
would, most of the time, agree to the needed change but would
continue with his old style. Many a time, during discussions, he
would agree that he was not able to take a stand, correct the
situation, manage his time and priorities, and reaffirmed his
commitment to change. Somewhere he had a belief that he has
been managing so well all these years and that was probably the
best style. It is difficult to unlearn behaviour that made us successful
in the past. It looked that he was also somewhere scared of making
changes fearing that these may prove counterproductive.
Organizations cannot be just endlessly managed based on
yesterday’s rules, assumptions and practices as they no more remain
relevant in this fast-changing environment. We need to innovate
and innovation means change. The CEO either did not understand
or did not want to understand that companies which aspire to take
control of their future need to manage organizational change.
54  Alchemy of Change

During his 14 months of association with the company,

Dr Arora had 22 long meetings on change agenda with the CEO. In
all these meetings, he spoke to him logically, rationally, emotionally
and sometimes even challenged him. He was a great listener with
a cool mind, looking to be a great advocate of change, agreeing all
the time to implement the proposals already discussed and finalized;
however, these proposals never saw the light of day. Despite the
stated change goals, he invariably defended the status quo and
behaved as he did before. Any effort to bring any change in existing
practices was resisted.
Finally, all the gains dissipated and the company reverted to
its earlier ways of working with added cynicism in the minds of
everyone that ‘nothing will change here’. If the CEO does not apply
to himself what he has been sermonizing, then the whole process of
change is bound to break down, as happened in Akash Industries.
The only consequence of failure of planned change is to set up an
organization for more painful and calamitous change, brought
about by inexorable march of market forces and technology.
We love routines and, by being apprehensive about possible
adverse consequences, do not try anything new. What we forget is
that in today’s fast-changing scenario, problems and new challenges
can gatecrash any time and we could be caught napping if we have
not prepared the organization to meet these challenges.
 Part III
Manage It or Be Ready for
Oblivion
 C hapter
7
The Blueprint

There are a hundred reasons why change can be daunting. Despite

well-laid-out plans, few things turn out as planned. No one can
predict with accuracy how the trenches will behave. Nilakant and
Ramnarayan (1998) say that this is so ‘Because real change in real
organizations is intensely personal and enormously political. It
involves altering not only an organization’s strategy, structure, and
operations, but also the perceptions, expectations, and performance
of thousands of people.’8
According to Prosci,‘simply coming up with right solution is not
enough to ensure that the results are achieved.’ The right answer
alone does not:

• Create buy-in
• Create commitment
• Mitigate resistance
• Eliminate fear
• Ensure compliance

Change management, at its core, is a structured approach for

bridging the gap between a great idea and tangible value to the
organization. Therefore, it recommends ‘balancing effort between
developing the right technical solution (arriving at the right answer)
and applying change management (crafting a solution for managing
the people side of a change)’.
58  Alchemy of Change

Managing the time period between the current and the future
state, when the change process is under way, is a monumental task.
This is the phase of high uncertainty as the status quo gets dislocated
during this phase due to a wide range of change interventions and
the future state does not become operational. Handling this phase
is, thus, a gigantic task.

Steps for Successful Change

There are no universal rules or well-defined sequence of steps for
managing change. Each organization, based on its history and
culture, faces unique challenges and exhibits specific strengths and
limitations. Irrespective of the background, culture or history, a
major organizational change does require a sequential approach
to change. There have been many prescriptions, with well-defined
sequence of steps, from well-known behavioural scientists and
management teachers.
Tichy and Devanna9 define change as essentially a three-phase
process. The first phase is ‘awakening’, where the organization
becomes aware of the need for change and acknowledges that
the status quo is no longer viable. They call the second phase
as ‘mobilizing’, where the organization creates and adopts new
structures, procedures and people to move the organization in the
new direction. The final phase has been referred to as ‘reinforcing’,
where the organization absorbs the new behaviours, attitudes and
practices into its culture.
John Kotter (1996), in his book Leading Change, mentions eight
steps that are essential for successful change10:

1. The entire management must communicate with one voice that

there is no alternative to considerable change.
2. A group of executives with enough power and flexibility should
be set up to lead the change effort as a team.
3. People need to know where and how they are going. Therefore,
a credible vision and strategy has to be crafted.
 The Blueprint  59

4. All means must be deployed to communicate it to all the

stakeholders.
5. People at all levels need to be empowered to facilitate change.
6. Opportunities for creating short-term wins need to be created
lest critics and cynics spread negativity.
7. Use short-term wins to undertake bigger changes. Systems
and processes that come in the way also need to be modified/
changed.
8. Stabilize new changes by top management personifying the new
approach and connecting it with corporate success.

We have refrained from enumerating different models of change,

including Kurt Lewin’s (unfreezing–refreezing) and so on, for
simplicity. One more reason for not including the widely popular
Kurt Lewin model here is that, in the present era, in a typical
organization many change efforts may be overlapping, and it may
be unrealistic to imagine discrete states of unfreezing and refreezing.
However, a counter-proposition that most such programmes
are guided by a theory of change that changes in attitudes lead to
changes in behaviour is fundamentally flawed. ‘In fact, individual
behavior is powerfully shaped by the organizational role people
play.’11 They believe that:

Individual behavior is powerfully shaped by the organizational

role people play. The most effective way to change behavior,
therefore, is to put people into a new organizational context,
which imposes new roles, responsibilities and relationships. This
creates a situation that, in a sense, ‘forces’ new attitudes and
behavior on people.11

The aim of these overlapping steps is to build a self-reinforcing cycle

of commitment, coordination and competence, and the focus is on
reorganizing employees’ roles, responsibilities and relationships to
solve specific business problems.
Based on practical research conducted in more than 900
organizations, Prosci has given the ADKAR model, which is
60  Alchemy of Change

an acronym for Awareness, Desire, Knowledge, Ability and

Reinforcement.12 It is a goal-oriented model and focuses on the
actions and outcomes required for change. It emphasizes that
organizational change occurs only when each person is able to
transition successfully and focuses on five actions and outcomes
necessary for successful individual change, and therefore successful
organizational change.
In the ADKAR model, the process is sequential. It emphasizes
that each step must be completed before moving on the next, as
it is not possible to achieve success in one area unless the previous
action has been addressed. The five sequential steps of the ADKAR
model are as follows:

1. Awareness of the need for change: Understanding why a change

is necessary is the first key aspect of successful change. This
step explains the reasoning and thought that underline a
required change and answers some basic questions such as
what is the nature of change, why is the change happening,
and what are the risks of not changing to the individual and to
the organization. In the absence of such awareness, the natural
reaction will be resistance to change. Prosci’s benchmarking
studies show that a lack of awareness is the greatest source of
resistance to change.
2. Desire to participate in and support the change: In this step,
individuals are able to reach a point where they make a personal
decision to support the change and participate in the change.
Building desire is achieved by addressing ‘What is in it for me?’
and ‘What is in it for us?’ regarding the change. A desire to
support and be part of the change can only happen after full
awareness of the need for change is established.
3. Knowledge on how to change: Successful change requires
knowing how to use the new tools or perform the new skills
after implementation, and knowing how to change. We should
list the skills and knowledge needed to support the change.
In addition to formal training, other methods of transferring
knowledge such as one-on-one coaching, mentoring and so on
might be useful. Two types of knowledge need to be addressed:
 The Blueprint  61

knowledge on how to change (what to do during transition) and

knowledge on how to perform once the change is implemented.
4. Ability to demonstrate the new skills and behaviours: It is possible
that employees may understand the change on a theoretical
level and even have the knowledge to make the change but
ultimately cannot demonstrate the required skills and behaviours.
In this model, ability is understood to be the difference between
theory and practice. Barriers inhibiting the ability need to be
identified and employees need to be supported through practice,
coaching and feedback.
5. Reinforcement to sustain the change: The final element in the
ADKAR model is reinforcement, a critical step to ensure
the change is sustained. Ensuring that changes ‘stick’ and
individuals do not regress can be achieved through positive
feedback, rewards, recognition, performance measurement and
corrective actions. Reinforcements that will help in sustaining
the change should be listed, and it must be ensured that there
are no opposing incentives to the change.

All these approaches lay down general principles with some

differences in terms of emphasis. Somewhere the focus is on
developing the right attitude and mindset towards change, while
in another approach the emphasis is on implementing change
at the business unit or plant level. The ADKAR model focuses
on individual change and ensuring that each person makes the
transition. Since the model focuses on the individual, we are able
to measure the ground realities and steps required to assist them.
While models of change management are useful, in that they
describe the general principles that can help us understand and
manage change; the change rarely follows the exact steps these
models suggest. If a change followed an exact pattern and was
predictable, there would not be any need for different models.
While we can make use of basic steps that are essential to follow
and that are common to organizational change, we should go about
implementing change based on unique characteristics of the culture
and history of an organization, and the environment in which the
organization operates.
62  Alchemy of Change

Qualities of Change Agent

Sometimes, especially in a large organization, one person may

not have all the qualities of a change agent. In that case, more
than one change agent with complementary capabilities may
perform the role as an orchestra.
If you are the change agent, check yourself:

1. Are you a good empathic listener? There is a lot of debate

on what constitutes empathic listening. Dr Brené Brown
provides a very succinct four-point framework13:
a. Perspective taking: ability to take the perspective of
another person and recognize it as her or his truth
b. Staying out of judgement
c. Recognizing emotions of other person and
d. Communicating that you understand without ‘silver
lining’ it
2. Are you flexible and open? While goals may be specific
and may be time bound, a change agent has to find
creative ways to accommodate concerns of different
stakeholders without losing line of sight of goals.
3. Do you have knowledge of change management principles,
experiences of other organizations in similar contexts, both
within the same industry and in other industries, technology
involved, project management, government regulations
and so on. The wider the knowledge, the better equipped
you are.
4. Do you have full support and confidence of the top
management?
5. How are your networking skills? You will be required to
form critical coalitions of key influencers.
6. Are you able to withstand strong mental and physical
pressure without losing calm and composure? Do you
have sufficient physical and mental energy, which you will
be required to draw upon? Are you generally optimistic?
 The Blueprint  63

Change management can be a very exacting job. As we

have discussed Rosabeth Moss Canter’s analogy elsewhere
in the book, change, like the transformation of a caterpillar
to a butterfly, can be a very gooey sticky mess in the middle
with most people wondering whether it was worth it.
7. Are you generally seen as trustworthy across different
stakeholders?
8. Are you an excellent communicator, both spoken and
written, including in the language spoken by the masses
in the organization?
 C hapter
8
Preparing for Change

It is important to remember the wise saying of Kōnosuke

Matsushita, who founded Panasonic, that when you change your
point of view, your results also change. In other words, the process
of change begins in the mind, with a belief that change is necessary.
To begin any change process, we must first start by understanding
why the change must take place. The management of change,
therefore, starts with a sense of discontent with the current situation
and articulation of a vision for the promising future. The challenge,
therefore, is to analyse the business and market environment, agree
to a compelling and distinguishing vision, set up relevant goals and
values, and bring people, technology, finance, business and support
processes closer, to enable the company to fulfil the needs of its
various stakeholders.
The organization has to rediscover itself; it has to have a
relook and modify the underlying assumptions and inconspicuous
premises which form the basis of its decisions and actions. We
need to challenge the status quo, the beliefs, values, attitudes and
consequent behaviour, which currently define it, before we can
build up a new way of operating. ‘Every organization must be
prepared to abandon everything it does to survive the future,’ says
Peter Drucker.
Unless we know what is to be changed, it is of no use to know
how to set about making the change. The size of the gap between
the desired state and the current state explains the need to change.
66  Alchemy of Change

It is necessary to be aware of where we are before starting work on

where we want to go. An organization has, therefore, to look into
its past in the context of the present and the present in the context
of the future and assess whether it can continue doing the business
the way it has been doing.
Before we start the process of change, irrespective of its nature
or type, we should be conscious of current practices, processes
and culture that may hinder the success of change project.
Organizational culture and value system play a vital role in how an
organization reacts to change. Keeping this factor in mind, we can
pre-empt certain reactions and plan accordingly. There might be
certain groups or individuals resisting change, given their cultural
predispositions. Plans will have to be prepared accordingly to handle
these reactions. Organizational change signifies leaving behind a
traditional culture and climate of conformity and creating a new
culture that allows innovative ideas. Not paying due attention to
various aspects of existing culture and value system and not planning
for these obstacles in advance might lead to incomplete solutions.
Change involves moving from the present state to a future
state through a transition. There has to be clarity as to what the
organization needs to change and how it should go about it. This
calls for an awakening, which requires a frontal assault on the status
quo so as to arouse the emotional energy of an entire organization.
This energy could manifest itself as fear but has to be converted
into personal commitment to a plan of action, which would be the
only fuel that could sustain a revolution.
Jack Welch states that facing reality is crucial in life, not just
in business; you have to see the world in the purest, clearest way
possible, or you cannot make decisions on a rational basis. Facing
reality means dealing with what all of us would prefer to avoid:
danger, failure and our own shortcomings.14 Such an audit should
include the assessment of performance, policies, practices, core
values, attitudes, management style and strategy. The current state
of the organization should be evaluated against the performance of
other organizations from similar industry, especially its business
competitors. It helps the organization to identify gaps and issues
that need to be addressed. Such benchmarking enables the
 Preparing for Change  67

promotion of a compelling need to change, and the performance

gap, and the consequences of failure can be clearly understood.   Just
the key performance indicators need to be benchmarked against the
best practices in the industry. Possible courses of action can then
be identified and evaluated, and a choice made of the actions for
the journey to the desired state.

Content of ‘What’ and Process of ‘How’

Both content and process are important in managing change. No
doubt, ‘what’ we want to do (the content of change) is important,
but ‘how’ we do it (the process of change) is even more important.
Process is as important as the product of change. The contents of
organizational change are technology, marketing, quality and cost,
while the process includes strategy, structure, systems, policies,
methods, attitudes and other HR practices. For most of us, the
goal is so fascinating and tempting that we sometimes lose sight of
the details altogether.

Swami Vivekananda, emphasizing the importance of

means, has said:

But whenever failure comes, if we analyze it critically,

in ninety nine percent of cases we shall find that it
was because we did not pay attention to the means.
Proper attention to the finishing, strengthening
of the means, is what we need. With the means all
right, the end must come. We forget that it is the
cause that produces the effect; the effect cannot come
by itself; and unless the causes are exact, proper, and
powerful, the effect will not be produced. Once
the ideal is chosen and the means determined,
we might almost let go the ideal; because we are
68  Alchemy of Change

sure it will be there, when the means are perfected.

When the cause is there, there is no more difficulty
about the effect; the effect is bound to come. If we
take care of causes, the effect will take care of itself.
The realization of the ideal is the effect. The means
are the cause; attention to the means, therefore, is
the great secret of life.15

Andrew and Richard16 state five conditions required for any

planned change and adaptation to take place:

1. Leadership has to put change management as a top management

agenda.
2. Appreciation that people alone make the change happen.
3. People must be aware that there is a need for change.
4. Strategy should be clearly spelt out in actionable terms.
5. All members of the management should be aligned.

This model shows that the scenario planning can be a major factor
for change. We shall have to understand the nature of change, its
type, size and its impact on people. Some people may face very little
change affecting their day-to-day work while for others change may
involve doing something entirely different, and doing it differently!
We should be prepared to assist each group in the best possible way
and plan accordingly.
One of the essential prerequisites while preparing for change is establishing a
high enough sense of urgency in managers and employees. Communicating
a sense of urgency keeps positive energy flowing. Without a sense of
urgency, people become complacent and do not put in extra efforts
and make the needed sacrifices, things so essential for change.
Top managers have to demonstrate a sense of urgency in their
day-to-day behaviour with the belief that radical change is possible.
They must assess the organization’s strengths and weaknesses
to decide what needs to be preserved and discarded. It is also
 Preparing for Change  69

important for them to identify the limits to change, based on market

evaluation, its growth rate and organization’s capacity to change.
Establishing a timetable and specifying priorities has to be the
next step. At this stage, it is important to have clarity about how
pieces balance off one another; how changing one single element,
whether a procedure, practice, policy or reward, changes the rest;
how the sequence of events and its flow affect the whole structure. It
would be essential to deploy the relevant know-how related to kind
of activities planned for change and make it collectively available
to all concerned, by way of incorporating it into the structure of
the organization itself.
Effective management of change requires a system to ensure
that all key actors, namely, top leadership, managers and
supervisors, move in unison and fulfil particular roles based on
their unique relationship to the change at hand. Top leadership
must communicate directly and participate actively and visibly
throughout the project. For change to be successful, managers and
supervisors, who are close to action, have the responsibility that
their teams must change the way they do their jobs. Employees
look to their managers for answers, support and direction in times
of change. They have important roles both of a communicator and
an advocate of change and also that of a coach, helping employees
during the transition. Only carefully planned and implemented
change efforts can help organizations adapt significantly to shifting
conditions and improve their competitive standing, providing a far
better future.
 C hapter
9
Vision for Change

The best way to predict the future—is to create it.

—Peter Drucker

Vision is a futuristic, concise and clear description of the goal to be

achieved and the reality that we wish to create. It is a picture for
people of what the organization will look like and serves to inspire
commitment, motivate and engage people. Vision provides meaning
and purpose to the work of the organization and encourages people
to work to strive for its attainment.
According to Lucas,17

The purpose of a vision is to guide (lead people in the direction of

goals), to remind (what the organization wants to be), to inspire
(people and their behavior), to control (organizational activities
and processes in the direction of the vision), and to free employees
(from tradition and a past that is irrelevant).

It also reveals the culture and values of an organization and its core
competencies. An inspiring vision can help overcome the hesitation
to espouse change that comes from anxiety arising from uncertainty.
There are three parts of a well-conceived vision:

1. What does the company stand for (its values)?

2. What for does the company exist? What will be missed by the
society if this company was/is not existing?
72  Alchemy of Change

3. Where does the company want to go (envisioned future) and

how it will further/impact the previous two?

Kotter18 states:

The guiding coalition (for change) develops a picture of the

future that is relatively easy to communicate and appeals to
customers, stockholders, and employees. A vision always goes
beyond the numbers and helps clarify the direction in which an
organization needs to move. Eventually, a strategy for achieving
that vision is also developed. If you can’t communicate the vision
to someone in five minutes or less and get a reaction that signifies
both, understanding and interest, you are not yet done with this
phase of transformation.

In the case studies reported earlier, we observed

the group chairperson of Mega Corporation had
been talking about his expectations, including a few
vision-related statements but it still needed focus and
clarity, to be termed as vision. The question was:
Change to what? One business head shared that
the group chairperson had neither any vision nor
conviction but had only wishful thinking of an ideal
state. He used to make statements which would look
like vision but had no belief in them. He knew how
to say those things and those ad hoc statements could
not be taken as vision. Ultimately, it was the core
group which debated and finalized the vision for
change. In AG Corporation, the vision for change
was finalized through a two-day workshop attended
by top team and various heads of departments. The
strategy to create a shared vision was worked out by
the core group consisting of top executives.

While the vision is the picture of an end state where all the plans
and strategies will eventually take us, the plan specifies step by
 Vision for Change  73

step how to implement a strategy and the strategy shows how to

achieve a vision. Through vision we try to see a possible future, and the
well-thought-out plans and strategies make our journey on the road
to change comparatively free of roadblocks. Joel Barker, a well-
known author who has written extensively on vision and discovered
the concept of paradigms, has mentioned that vision without action
is a dream. Action without vision is simply passing time. Action with
vision is making a positive difference.
It is also important that vision and strategies are logical and
unambiguous. Blurred and illogical visions and strategies cannot
be communicated with clarity and sound logic. With large-scale
discontinuous change, where we venture into unknown territory,
it is important to set the vision and strategies correctly. Bold visions
would need bold strategies.
It is important that the dominant coalition (to be discussed in the
next chapter) not only develops a shared vision but also disseminates
it so that it becomes the shared vision of the organization, preferably
by taking inputs from rest of the employees/groups. Shared vision is a
source for creating a common identity and discipline, which establishes
a focus on mutual purpose and changes people’s relationship with the
organization. People begin to work together by developing shared
images of the future they wish to create. Shared vision binds people
together in a common cause and creates a moral commitment to
it. Developing a shared vision or commitment to vision becomes
easier if people participate in planning and implementing the change
programme. People always support what they help to create.

The core group in Mega Corporation considered promoting

acceptance and developing support for change vision to be
the most critical aspect of the strategy as it involved moving
people out of their comfort zones. Accordingly, the core
group members interacted with various groups of employees
to develop a shared vision.

Shared sense of desirable future helps motivate and coordinate

actions that create transformations. If individuals or groups become
74  Alchemy of Change

involved in the change, they tend to see it as their change, rather

than one imposed upon them. We should be able to create passion
amongst people to break out of routines and take ownership for
change.
Even though employees embrace the new vision, they sometimes
feel disempowered by certain obstacles, such as compensation or
reward system, which can force them to choose between the new
vision and their self-interest. We must be able to foresee and remove
such obstacles.
Rakesh Balachandran introduces an interesting caveat: ‘If the
job of your team is to only execute a strategy pre-determined by
corporate headquarters, probably a planning and execution session
would do your team better than a visioning exercise.’19 His other
advices are equally pertinent:

1. We have to pay attention to the time horizon for creating a

vision. He adds ‘Anything too short is meaningless—anything
too long will not be motivating enough for most teams.’
2. Though there are several tools for planning the visioning
exercise, he recommends Lego Serious play. Of course,
facilitators and business leaders should concur.
3. To make shared vision meaningful for the masses, it is also
important to spell out the acceptable and unacceptable
behaviours in the pursuit of shared vision.
4. It is important in the very beginning to spell what will be
milestones for shared vision.

We will be talking about the need and importance of milestones in

planning and implementation of change in subsequent chapters.
 C hapter
10
Building a Dominant Coalition

Even an extremely talented and charismatic person may not have

enough time, skills, energy and leadership capacity to lead change
all alone, except in very small organizations. Therefore, the need
for a dominant coalition is imperative. The dominant coalition is a
group of members in key influencing positions who combine their
resources and become more powerful than when they each act
alone. It is a group formed to pursue a strategy to achieve the goal
of change, knowing that their personal success is also dependent on
the success of others. This team is involved in setting direction for
the change, identifying options and narrowing down on resources
and support from various parts of the organization. As change
progresses throughout large organizations, additional teams are
also formed at lower levels to help drive action within their units.

In Mega Corporation, as we have mentioned earlier, the

first step was to put together a dominant coalition between
potential sources of energy that could direct the change effort.

According to Kotter,10 there are four key characteristics for an

effective coalition:

1. Position power: Are there enough key players on board, especially

main line managers, so that those left out cannot easily block
progress?
76  Alchemy of Change

2. Expertise: Are the various points of view—in terms of discipline,

work experience, nationality and so on—relevant to the task
at hand adequately represented so that informed, intelligent
decisions will be made?
3. Credibility: Does the group have enough people with good
reputation within the firm so that its pronouncements will be
taken seriously by employees?
4. Leadership: Does the group include enough proven leaders to be
able to drive the change process?

Diversity is essential, not only of functional knowledge and parts of

the organization but also of approaches.
The constitution of a task force is a key element of change
management. Ignoring any of the above elements can seriously
impede the success of the effort in two ways. If the key influencers
have been left out, their support may become suspect due to either
indifference or ego hassles due to a feeling of being left out. On the
other hand, if inconsequential persons are co-opted for any reason,
political or otherwise, this may dissipate the energy and focus of the
coalition because comparisons of contributions may occur. Apart
from the criteria as laid out by Kotter, what should be the personal
qualities or commitments of the members of the dominant coalition?
Boyett and Boyett20 have listed the following attributes of the
coalition members and their duties to:

• Share a keen sense of discomfort with the way things are.

• Agree on a vision for the future.
• Have a good reputation.
• Control key resources (time, money, and people) that will be
necessary for the change effort.
• Control the rewards and punishments and are willing to use
them to achieve the vision.
• Demonstrate public support for the change and convey in
their words and deeds a strong commitment to realizing the
vision.
• Be in for the long haul.
 Building a Dominant Coalition  77

Kotter10 advised that people with fat egos and snakes should be kept
out of the dominant coalition:

…people who create enough mistrust to kill teamwork. At

senior levels in most organizations, people have large egos.
But unless they also have a realistic sense of their weaknesses
and limitations, unless they can appreciate complementary
strengths in others, and unless they can subjugate their
immediate interests to some greater goal, they will probably
contribute about as much to a guiding coalition as does nuclear
waste.

The five business heads, along with the change facilitator,

formed the top transformation team (core group) in Mega
Corporation. Change facilitator was the facilitator of the
core group as the internal facilitator brings with him an
understanding of the organizational culture and politics, and
his own biases serve as a useful counterpoint to the biases of
the line leaders on the team. Fortunately, all the members
of the core group had, by and large, the characteristics as
considered essential by Kotter, and Boyett and Boyett. They
also had the non-traditional mind set and were willing to
venture into unchartered territory, conditions necessary for
success.
After the formation of an effective team, a visible and
dynamic coalition, which was a major step in getting around
the problems, the group diagnosed the situation and came up
with the desired vision for change. Their two-day workshop
allowed the group to examine their personal styles and
dispositions, and to ensure that there were no hurdles in the
free flow of energy. For the new roles and relationships, it was
necessary that frequent and consistent communication take
place. Now it needed a process or means to get there.
78  Alchemy of Change

Kotter states that regardless of the process used, trust is

a necessary component. When there is trust, you can create
teamwork. When it is missing, you cannot.10 Rajan recalls a similar
experience. One large industrial group in Oman wanted training on
trust conducted for its top team of all the group companies in 2005.
Until then, he had done training on such subjects as leadership
and team building, and this was a unique request. The group
chairperson gave an interesting rationale: ‘Leadership, teaming,
etc. all depend on trust. If trust is there, everything else is there.
Otherwise, there is nothing.’
It is also natural that the commitment can wither. Off-
site teambuilding events can be useful to reinforce energy,
understanding and mutual respect.
A well-functioning guiding team is able to articulate and put to
rest questions such as: What change is needed? What is the vision
of the new organization? What should not be altered? What is the
best way to make the vision a reality? What change strategies are
unacceptably dangerous? Good answers to these questions position
an organization to leap into a promising future.

The core group members of Mega Industry’s change

management team, therefore, emphasized the need for a sense
of partnership with each other where contributions would be
respected and a real consensus would be established before
committing the team to action. The core group, therefore, laid
down the following ground rules for its functioning:

1. Absolute confidentiality
2. Open mind
3. Mutual trust
4. Transparency
5. Information sharing
6. Regular interaction
7. Group vision/interest
 Building a Dominant Coalition  79

Besides these ground rules, the core group arrived at an

understanding with regard to its functioning and facing the
challenge of change. They included:

1. We shall meet on a regular basis to share information,

review the situation and take decisions.
2. We shall start giving the right signals that we mean
business with no compromises.
3. Onus of improvement and bringing change is on us;
however, we need the chairperson’s sponsorship.
4. In the corporate and professional world, we command
great respect but have an image that we cannot manage
our affairs. We shall improve our image.
5. Our approach to change, especially IR-related issues, shall:
a. be fair, benevolent and caring. However, we shall take
principled stand for developing the right work culture.
b. try our best to bring change without confrontation;
however, we shall not shy away from it if warranted.
6. We shall take charge of the situation under each one of us
with the belief that it can be done and we shall do it.
7. Each one of us will try to exercise better discipline.
8. We shall work as a team, with joint responsibility for all
businesses/operations of the group, holding a ‘Mega
Corporation’ perspective.
9. All major issues pertaining to any division shall be decided
jointly so that each one is aware of the background of the
decision/action taken.

During the first off-site meeting of the core group, the business
heads diagnosed that they had shown complete lack of ownership
in managing their businesses. There was overemphasis on
‘somehow’ achieving production targets without giving any
importance to the process or discipline. While handling various
80  Alchemy of Change

difficult situations during the change process, doubts still

persisted within the core group members that the chairperson
might interdict, but their consensus and firm stance prevented
him from doing so. There were occasions when the chairperson
did show signs of developing cold feet, but unified voice of the
core group prevailed. It had turned into a dominant coalition.
Despite differences, the core group members felt a sense of
partnership, exercised self-restraint and a real consensus was
established before committing the team to action. All the
business heads felt that the best thing that happened during the
change process was that core group members held together as a
team, worked with trust and transparency, everybody was party
to the decisions and felt bound by and to it.
Similarly, in AG Corporation, the core group of top five
executives who had the required expertise, credibility and
control over key resources, were committed to the vision of
change and felt a sense of partnership. The core group used
to meet every day to discuss strategic issues relating to change,
take vital decisions and monitor the implementation of change
process. This is another success story of a dominant coalition.

People emulate and draw inspiration from the conduct of their

superiors. We cannot hope to create an environment for change
when the top team is perceived to be a non-cohesive group of
individuals pursuing individual goals at the cost of organizational
goals. The success of teamwork depends largely on the capacity of
the individuals to look beyond their narrow horizons of ego, self-
gain and individual glory by following the path of self-restraint,
self-control and selflessness.
 C hapter
11
Designing Change Strategy

In the change process, we have to implement the plans to bring

about new ways of working. This, in turn, seeks to disengage from
the past and choose new attitudes and mindset. We, therefore, need
to coach and build new skills and competencies to enable people to
remain competitive. The change strategy should consider training
of employees in new skills, competencies, ideas, approaches and
behaviour.
Designing an appropriate change strategy involves setting out
clearly defined vision, objectives and strategic intent. It is important
to identify where we can secure early wins, creating supporting
alliances, scheduling the steps that must take place throughout the
change cycle and the way in which it would be brought about, with
focus on details.
Prahalad21 states the following important points while designing
a strategic architecture:

1. Emotional and the intellectual energy for going through the

transition.
2. A shared aspiration binds, unites and inspires everyone to
stretch beyond current resources.

In the process of designing a change programme, due attention

must also be paid to people’s issues and concerns. The systems
and processes to be used are equally important part of strategy.
82  Alchemy of Change

Sometimes, the entire process is production and function driven

and neglects the cultural change which we intend to bring. The top
management team or dominant coalition, which gives a shape to the
change programme and determines new organizational structure,
could sometimes lack sensitivity to issues and concerns of the people.
The change strategy must also include a plan of appraising
progress on a continuous basis to exercise control and acting if
unexpected deviations occur. It should, however, be kept in mind
that change takes time and should not be forced to occur too
quickly. People need to be provided with the time and opportunity
to disengage from the present state to which they are used to
and feel a natural attachment. The strategy should also contain
measures to deal with one of the biggest midcourse challenges to
keep the change process focused and energized.
Wang22 presents eight change management strategies that are
quite effective:

1. Change managers at the top directly impact the success.

Therefore, the CEO must align the best team at the top. These
people must be very strong communicators.
2. They should ask for feedback even before they begin. Quite
often, feedback from the lower levels is not taken and that is
where maximum resistance is faced later.
3. They should share the exact statistics instead of vague homilies.
4. Keep it simple, one at a time. Things have a natural tendency
to become complicated with the passage of time. Guard against
that. Do not attempt too much at a time.
5. As John Beshears and Francesca Gino23 state in an HBR article,
create an experimental group and a control group. It means that,
where possible, attempt the change as a pilot project in one part
of the organization and use the result to fine tune the strategy.
6. Emotion is as much a part of change as the data. Harness
emotions towards change. Wang22 states: ‘Don’t overestimate
the value of the dollar; don’t underestimate the heartstrings.’
7. Set up small wins. Make it a point to recognize and reward
people along the way, through a formal reward and recognition
programme. This strengthens the constituency for change.
8. Communicate, communicate and communicate.
 Designing Change Strategy  83

One of the prerequisites of an effective change programme is

the establishment of credibility of the management’s intentions
about the proposed change. Chances of success of change
programme increase considerably once the employees perceive
that management has good intentions.
It is important that entry points be carefully weighed. Quite
often, change facilitators or top management allow their own
perceptions or biases to guide what should be the first entry point.
Back in early 1980s, Rajan was working on a turnaround strategy
for one of the loss-making public sector undertakings. Armed
with specialized knowledge on organization design from one of
the top gurus on the subject, late Dr B. L. Maheshwari, director,
Centre for Organizational Development, he found that the organi­
zation had a poor structure. So a meeting was arranged between
Dr Maheshwari and the managing director of the organization.
Later, Dr Maheshwari remarked that the main challenge of
this organization was faulty strategy and not the structure. This
enlightenment was very useful in Rajan’s subsequent consulting
assignments. Quite often, managements would ask for training
or climate survey or the type of intervention of their choice as a
remedy for their problems. Without contradicting their ‘wisdom’,
Peter Block’s methodology of organization priority survey that
sought to collate perceptions of senior/top management of relative
priority concerns amongst strategy, inappropriate structure,
negative climate, ineffective systems and processes, unbalanced
power relationships, underdeveloped individuals, ineffective
teamwork, unclear aims and objectives, unassertive leadership and
so on in a forced choice format. The collated data were fed back to
the top management, which they did not deny because the inputs
came from them. This would immediately help build consensus on
the agenda ahead and was productively used across countries with
suitable modifications.
Of course, alternative methodologies exist, but shared priorities
of the top management are critical for the unity of purpose and
approach.
 C hapter
12
Handling Resistance

We should paralyze resistance with persistence.

—Woody Hayes, famous
American football coach

Why We Resist Change

Routines represent our zones of comfort, and we do not want

to come out of them, as there is a sense of predictability about
them. These routines have structured our thoughts in a certain
way. Comfort with the status quo is extremely powerful, and
fear of moving into an unknown future state creates anxiety
and insecurity. Negativity or lack of enthusiasm is, thus, a normal
human response to change. We should, therefore, never be
surprised by it, rather should expect resistance and work with
patience, giving time to people to undergo the psychological
transition which takes place during the process of change. We
are dealing with emotions of people while trying to change their
mental models and mindset, and this has to be done with lot of
persistence, tact and sensitivity.
86  Alchemy of Change

Kotter and Schlesinger24 cited four most common reasons for

employees’ resistance to change:

• Parochial self-interest: People often resist change because they think

they might lose something of value as a result of that change.
• Misunderstanding and lack of trust: People are often not very
clear about the implications of change. Misunderstanding is
highly likely if there is lack of trust between employees and the
management.
• Different assessments: Frequently employees assess the situation
differently from their managers. They might see more costs
rather than benefits resulting from change.
• Low tolerance for change: Sometimes people resist change because
they are unsure if they acquire the new skills and abilities that
the change requires.
  Professor Matti Otala views resistance to change as fully
natural and human and says that there are many sources of
resistance:

• The comfort of old habits

• Selectivity of attention and retention
• Dependence on role model’s example
• Fear of the unknown
• Economics
• Lack of trust
• Misunderstanding
• Parochial self-interest
• Different assessments of what change is needed
• Low tolerance for change (attitude)25

On the aspect of why individuals resist change, Hari Gopal26 brings

in the concept of divergence from their mental models:

Changing the mental map causes discomfort or pain. The

discomfort is less if the discrepancy/dissonance between
this mental map and the change activity is minimal. The
greater the dissonance, the greater the discomfort and higher
 Handling Resistance  87

resistance allowing for fewer changes in one’s behavior. If

the discrepancy is very high, individuals tend to reduce the
dissonance by either disregarding the external reality or
modifying their own ‘mental map’.26

Presented next is an exercise based on Jeffrey Russell and Linda

Russell’s illustrative list27 of the perceived losses of change and we
invite readers to draft their responses in each case.

What the employees may fear What you will plan, do or say to address
these fears? How will you turn this into an
opportunity?
  1. Job security: People may
fear job loss or a loss of
financial resources due to
a reduction in their job or
income level.
  2. Psychological comfort or security:
People may feel that the
change threatens their
level of safety, comfort,
security and self-confidence
by reducing their level of
certainty about the world
around them.
  3. Control over one’s future:
People may perceive that
the change threatens their
ability to control their
future actions, decisions
and identity.
  4. Purpose or meaning: People
may believe that change
threatens to take away
the identities, hopes and
aspirations that make their
lives meaningful.
(Contd.)
88  Alchemy of Change

(Contd.)
What the employees may fear What you will plan, do or say to address
these fears? How will you turn this into an
opportunity?
  5. Competence: People may
feel unprepared for
new responsibilities
and duties, which can
lead to embarrassment
and a reduction in
self-confidence.
  6. Social connections: People
may believe that their
social contacts with
customers, co-workers or
managers will disappear.
This can result in a loss in
their sense of belonging
to a team, group or the
organization. Since so
much of our sense of
self evolves through our
relationships to others,
this tends to be the most
traumatic.
 7. Territory: People believe
they may lose a sense
of certainty about the
territory or area that
used to be theirs. This
territory includes physical
workspace, expertise, job
titles, assignments and
psychological space.
  8. Future opportunities: People
may fear that they may
lose a deserved reward that
they have worked hard to
achieve.
 Handling Resistance  89

What the employees may fear What you will plan, do or say to address
these fears? How will you turn this into an
opportunity?
  9. Power: Change can
threaten a person’s sense
of power and influence in
their organization and life.
People may perceive that
the change takes away part
of what enables them to
feel effective.
10. Social status: People may
perceive that the change
will erode their status
that they have achieved
(through competence,
influence or hard work)
compared to other
people. They fear that
what they have worked
hard to accomplish may
disappear.
11. Trust in others: People may
lose their trust and faith
in others—especially
leaders and others whom
they have admired in
the past—when the
impending change
threatens to take away
other things of value.
12. Independence and autonomy:
People may feel that their
ability to be self-directed
and self-managed will be
eroded.
90  Alchemy of Change

Environment Matters for Change

The environment or context within which the change is taking
place is also important. These also need to be accounted for and
strategies evolved to deal with the following:

1. Employees will keep in mind the organization’s past record of

changes, including reinforcements or rewards. Similarly, if the
company has a history of initiating changes and not following
through or allowing some groups to opt out of change, then
these past events will heavily influence the willingness of
employees to engage in new changes.
2. Resistance to change is normally more intense for changes
that are implemented without employees’ involvement and
participation. In such a situation, motivation, energy level
and enthusiasm of the employees decrease. There is little or very
negligible scope of resistance if the impacted people are involved
in planning and execution of changes that are to impact them.
In the words of Peter Senge, ‘People don’t resist change. They
resist being changed.’
3. In the present era, employees may also fear that if they agree to
one change, the company may embark upon further changes,
which may be more difficult to accept.
4. Friends, family, neighbours, influential persons such as union
leaders, political leaders may be discouraging the employees
from accepting change.
5. Sets of data and perceptions of the management and the
rest of the employees may be different, and therefore they
may genuinely feel that the changes may be damaging to the
company/employees in the long run. On the other hand, in
cases such as acquisitions, mergers, amalgamations and so on,
employees’ perceptions may well be true.
6. Employees may perceive a change as running counter to organi­
zational values or their personal values. It has to be stressed from
the beginning that the proposed change is in consonance with
its long-held values. Alternatively, if some of the values have to
be jettisoned for long-term survival and progress, the rationale
 Handling Resistance  91

has to be properly communicated, possibly through town-hall

or other large-scale interactive processes coupled with extensive
communication.

People need time to work through the change process. Individuals

have their own inner lives, populated by their values, beliefs,
fears and aspirations. The choices they make are linked to these
elements and are the extensions of reality that operates in their
hearts and minds. None of us move through change at the same
pace or in the same way, nor are we motivated by the same thing.
One way of looking at resistance could be that we take it as feedback
and use it productively. It may be useful to address resistance by
individuals at the individual level through a personal conversation
between the resistant employee and his superior, keeping in mind
the inner dynamics that drives his thought process. This might lead
us to the final tip for managing resistance.

Things to Keep in Mind While Initiating

Change Process
Overcoming resistance is a process of touching what people think
and feel and can be dealt with only through validation of facts and
clarification about notions. If we could influence the thinking of
people, feelings would automatically get influenced, as feelings are
primarily the outcome of thinking. The way we communicate the
change to the people has the single most important impact on how
much resistance to change will occur.
When the change project is being initiated, we should be
proactive about the source of potential resistance and the likely
objections behind this resistance. We should act on this knowledge
ahead of time before the resistance impacts the change process. To
be effective at managing resistance, we must look deeper into what is
ultimately causing resistance instead of looking at it from the narrow
prism of a problem employee/s or problem section or area. We
must identify the root causes instead of just focusing on symptoms.
92  Alchemy of Change

Many managers underestimate the ways they can positively

influence specific individuals and groups during a change.
According to Kotter and Schlesinger, 24 there could be six
approaches for dealing with resistance to change:

1. Education and communication: Useful when one needs resistors’

support and resistance is based on inadequate or inaccurate
information and analysis. It is time-consuming and requires efforts.
2. Participation and involvement: In general, this leads to commitment,
not merely compliance.
3. Facilitation and support: This is most helpful when fear and
anxiety drive resistance. It includes training. This can be time-
consuming, expensive and yet fail.
4. Negotiation and agreement: This is particularly appropriate if some
people with power to resist are likely to lose out due to change.
However, this may create situations for blackmail.
5. Manipulation and co-optation: Management can co-opt significant
potential resistors in design and/or implementation. However,
this may limit the scope of education/communication and
participation. Nevertheless, it is sometimes used effectively.
6. Explicit and implicit coercion: People can be transferred or sacked.
This can lead to snowballing however.

As per the 2009 benchmark study of Prosci, the main reason for
resisting change by employees was ‘a lack of awareness of why the
change was being made’. No one made a compelling case for why
the change was being proposed, leaving employees wondering—
why? Similarly, for managers the principal reason for resistance was
a lack of awareness about and involvement in the change. Managers’
inputs were not solicited, resulting into resistance to change.
Real power comes not from forcing people to do what we want
but from changing the way people think so that they willingly
do what we want. We should create a facilitating climate where
behaviour is guided by genuineness, acceptance, caring, positive
regard and empathy. We should listen to and allow the resisting
person to express his ideas and feelings with regard to change.
Hearing the employees out and letting them express their point
of view in a non-judgemental environment will reduce resistance.
 Handling Resistance  93

In Mega Corporation, during the change process itself, one

of the business heads (member of the core group) continued
to pursue the appeasement policy keeping the short-term
business interests in mind. Under pressure from the union, he
agreed to issue goggles/glares to certain category of workers
and granted two increments to the workers of the assembly
department for shifting to new assembly line, erected very
close to the old assembly line, though it did not involve
any additional workload. Not only were these unjustified
concessions granted to the union in a closed-door meeting
with the divisional representatives of the union, a commitment
was also taken from them that this should be kept a top secret
and no one else outside the division, especially the change
facilitator, should know about it. When the change facilitator,
during one-to-one discussions with the said business head,
wanted to verify the factual position, he denied having taken
any such decision.
Since it was not only a question of serious repercussions
of the decisions on other business divisions but of basic
integrity, attitude and commitment of a member of the
core group to the vision of change, and also involved
the underlying ethics and principles of running business,
the change facilitator sought the intervention of group
chairman. In his note to chairman, with the details of two
incidents, he wrote:

With profound anguish and regret, I wish to bring to your

kind attention a few incidents related to X division, which
involve deeper dilemma and malaise relating to:
1. Independence of a company in functional matters
even when it has deeper repercussions on the
functioning of the other companies in the entire Mega
group.
2. Common vision and commitment to cultural trans-
formation.
94  Alchemy of Change

3. Short-sighted appeasement policies, undermining

ethics and imperatives of shared goals.
These incidents highlight appeasement, abject surrender
before negative elements, deliberate concealment of
information, and willful disregard of corporate concerns.
Needless to say, they are turning the clock back on our
common task of bringing about change in work culture
and have led to cascading problems everywhere else.
I am forced to seek your intervention to settle the issue
once and for all.

The chairperson discussed the issue with the business

head; post which the change facilitator focused on
developing greater conviction and commitment for change
in the concerned business head. Sometimes, managers
intellectually understand the need for change but are
unable to change their attitudes and behaviour. When we
change what we believe, we change what we do. Realizing that the
concerned business head was unable to make the emotional
transition, the change facilitator held discussions with him,
challenging his unviable beliefs and suggesting more viable
and contextually relevant beliefs. Later on, the said business
head proved to be the most active partner in the whole
change process.

Creating Conducive Climate

One of the essential conditions for effectively handling resistance
is to create a climate for change in the organization, which
requires willingness and ability of the top management to change
their behaviour and act as a role model. If they persist with old,
dysfunctional behaviour, the rest of the organization would follow
suit and pay only lip service to the change process.
 Handling Resistance  95

It is necessary that resistance and obstacles to change be dealt

with quickly and firmly. Failure to do so would lead others to lose
commitment and interest in the change.

In one of the business divisions of Mega Corporation, when

there was work stoppage for 20 days on the issue of transfer of
a few workers to other section, the management had spoken
to all concerned union leaders and the workers of the division,
who did not find any mala fide intentions on the part of the
management in the transfer and even accepted the logic
behind the transfer but did not agree to management’s right
to transfer. They resisted because they were afraid of change,
which could have given necessary flexibility to management
to manage as per business and environmental needs. People
are capable of logically and rationally considering and
screening relevant facts and beliefs but their values perform
a gatekeeping function. Values represent what we consider to
be important in life and act as criteria for making decisions.
These people wanted to remain the same without anybody
disturbing their comfort levels, which was important for
them. Reassuring those who are afraid of change by using
consoling words may often in itself prevent the process of
change and the management, therefore, taking a firm stand,
started taking disciplinary action against those involved in
instigating the unjustified work stoppage. The workers finally
came up with the offer of restoring normalcy provided they
were paid wages for the period of work stoppage, as has been
the practice in the past, in all business divisions. Besides the
fact that the demand was wholly unjustified, the management
did not want to give any wrong signal by way of extending
any concession, and thus, did not accept any condition for
restoring normalcy. Normal working was finally resumed after
20 days. Managers had a belief that things were difficult to
change, as the management cannot take a firm stand. The
stand taken by the management in the said case not only
96  Alchemy of Change

activated managers but also encouraged the fence sitters to

join actively in the change process.
Similarly, when the workers once agitated over the
settlement-related issues of production norms and new
work practices, the casual workers and overtime were
stopped by the union. The management took a firm stand
to demonstrate its resolve that it was committed to change.
Though only casual workers and overtime were stopped,
but there was no production at all and hence the regular
workers were also not paid any wage, on the principle of
no work no wage. The union, in view of past experiences,
had not expected such a tough stand by the management.
Finally, the union started approaching the management,
requesting for some face-saving device, so that the agitation
could be called off, but the management firmly refused
to extend any concession and the agitation was finally called
off unconditionally.
The firm stand of the management in the agitation of
20 days over the issue of transfer and the one-month-long
current agitation gave it confidence and established its
seriousness about the change. The whole management
was highly motivated and pursued the change process with
confidence. They believed that change was possible and took
charge of the situation in their respective areas. When the
driving forces outweigh the restraining forces, it becomes
easier to affect the change. Managers, with higher level of
confidence, started exercising control, resulting into improved
discipline and weakening of restraining forces.

Morris and Raben28 talk about the first question in the minds
of employees as WIIFM (What is in it for me or what is going to
happen to me). ‘The task of management will be to somehow relieve
that anxiety and motivate constructive behavior.’
A good portion of the normal resistance disappears when
employees are clear about the benefits the change will bring to
 Handling Resistance  97

them as individuals. Nothing is more important to individual

employees than to know the positive impact on their own lives
and career. Readiness to change will tend to be greater if we
can convince people that there could always be a new and better
situation.

With the change in environment, after the one-month-

long agitation was called off in Mega Corporation, and
the management was, to a great extent, in control of the
situation, anxiety levels went up and people started fearing
as to what was going to happen to them. This was time to
give emotional support to people by way of information,
support and counselling about the change. An effort was,
therefore, made by all the managers to define new terms
and persuade employees to accept them. Another goal of
such one-to-one discussion was to help people feel engaged
and committed to the organization’s future and satisfy their
need to feel respected, understood, listened to and valued
along the way.
It was observed that during one-to-one discussions all
these workers and the union leaders would agree verbally;
however, they failed to follow through. Lack of trust emerged
as a serious barrier. If people have trouble trusting each other
during routine times, they trust each other even less during
times of change.
One of the paradoxes of change is that trust is hardest to establish when
we need it the most. Mistrust causes people to focus on protecting
themselves instead of cooperating with change efforts.
The last strike engineered by the negative leadership was
the final test for the management to demonstrate its commit­
ment for change and that there could be no compromise on
basic issues, linked to the survival of the group. The time
to nurse the change resistors or to convince them about
the inevitability of change was over. It was the time to lay
down the law and tell everyone clearly that the game had
98  Alchemy of Change

changed and that they could either play within the new
rules or play somewhere else. The government declared the
strike to be illegal and all those involved in instigating and
inciting workers and other acts of indiscipline, including a few
leaders of the union, were dismissed. The message was loud
and clear and had the desired impact. The strike was called
off unconditionally and negotiations resumed to finalize the
settlement.

It is not science that you can lay down a formula for dealing with
resistance. As long as humans are involved, every situation will be
similar and yet unique. There will be several options, and one will
have to choose the most appropriate option using experience and
wisdom.
One can minimize resistance through proactive dialogue,
establishing shared meanings and interpretations and donning the
role of a coach and facilitator instead of regulator, commander
and a bureaucrat.
Change initiative may start with great enthusiasm and total
involvement of top management but, many a time, the effort gets
bogged down during implementation either due to day-to-day
issues or in view of some short-term objective. The emphasis on
day-to-day issues and priorities or the short-term profits during
the process of change has the potential of ruining the change
programme. The organization must be careful enough not to risk
the change programme for such short-term gains. They have the
potential not only of ruining the change programme but also of
management losing its credibility. Any organization undergoing
the process of change must also not fall in the trap of holding on to
its old ways of doing things. In the words of Peter Drucker, ‘The
greatest danger in times of turbulence is not the turbulence­—it is
to act with yesterday’s logic.’
 Handling Resistance  99

Key Points to Know about the Employees’

Resistance to Change

1. Resistance happens for a reason or some reasons. They

have to be addressed.
2. Plan for and expect resistance. Begin dialogue even before
commencing change to reduce surprise and resistance.
3. Be patient and allow employees to work it out within their
system while offering support.
4. There could be a very important lesson or a warning for
the organization in employee resistance.
 C hapter
13
Sustaining Change

Sustaining change means sticking with initiatives, making sure

that desired changes happen and outcomes are delivered. For any
change to be sustained, it needs to seep into the bloodstream of the
corporate body and become embedded in the organization’s culture.
Until new behaviour is rooted in social norms and shared values,
changes are subject to degradation as soon as change pressures start
diminishing.

Steps to Cultural Change

A culture truly changes only when a new way of operating has been
shown to succeed over a stipulated period of time. Real change does
not take hold until people actually change what they do. Trying to
shift the norms and values before we have created the new way of
operating does not work. We can create new behaviours that reflect
a desired culture, but those new behaviours will not become norms
until the very end of the process.
In this last phase of change, we keep it in place by helping to
create a new, supportive and sufficiently strong organizational
culture by integrating the changed behaviour and attitude into the
normal way of doing things. A supportive culture provides roots
for the new ways of operating. The change leaders help employees
integrate the changed behaviour or attitude into the normal way of
102  Alchemy of Change

doing things, making change stick by nurturing a new culture, new

group norms of behaviour and shared values. Once it is an integral
part of the culture, the new behaviour stands strongly rooted even
if the leadership changes.
Culture is a complex concept. To ensure that the new norms of
behaviour and skills become part of the new culture, it is important
to make sure that changes last by implementing sustainable
discipline in the organization. Employees need help maintaining
new behaviours, especially when their old ways of working are
deeply ingrained and there could be strong possibilities of their
backsliding into dysfunctional habitual patterns of old behaviour.
Leaders must focus on key behaviours having high impact on
important issues and must take personal responsibility for ensuring
that they do what they say. Leaders must also provide opportunities
for employees to practice desired behaviours repeatedly and
should personally model new ways of working. It is also important
that management processes and systems such as promotions,
succession planning, training and appraisal procedures, rewards,
organizational design and policies are refined and aligned to
support change. Change leaders must create an appropriate
architecture of roles, responsibilities, systems and overall context
that facilitates effective execution.
Once employees exhibit the new behaviours or attitudes, it
is important to give positive reinforcement, establish systems to
support these new behaviours and attitudes including rewards for
new behaviour, and sanctions for the old. This is also the time when
change leaders should focus on continuous development of employees
through training and education, provide additional coaching and
modelling to reinforce the stability of change and establish systems
that support and encourage the new behaviours and attitudes.
When changes are taking shape and people have embraced
new ways of working, the organization is ready to refreeze, which
helps people and the organization to institutionalize the changes.
Once the changes are institutionalized and become part of the
new culture, it is ensured that the changes become the new way
of functioning. With this new-found stability, every employee also
finds comfort and confidence.
 Sustaining Change  103

The rationale for creating a new sense of stability in our everyday

changing world is often questioned. Even though change may be
constant in many organizations, this refreezing stage is important.
Without it, employees get caught in a trap where they are not
sure how things should be done. So nothing ever gets done to full
capacity. In the absence of a new frozen state, it is very difficult to
tackle the next change initiatives effectively.
As and when we decide to introduce any new change, it would
be difficult convincing people that something needs changing if we
have not allowed the most recent changes to sink in. The changes
that have been brought about and have benefited the organization
and the individuals will be a source of motivation to implement new
changes, once institutionalized. There has to be a conscious attempt
to show people how the new approaches, behaviours and attitudes
have helped improve performance, and sufficient time must be
taken to make sure that the next generation of the top management
really does personify the new approach. We must articulate the
connections between the new behaviours and corporate success.
A fragile culture can be institutionalized through promotion,
a career advancement process. Promoting people who truly
reflect the new culture helps in strengthening the new norms and
behaviours. By putting people who have absorbed a new culture
into positions of power, we create an increasingly solid and stable
foundation. In turn, these representatives of the new way feel more
empowered and motivated to continually deliver their best.
As part of the refreezing process, make sure that we celebrate
the success of the change and thank them for enduring a painful
time—this helps people to find closure, strengthens their belief
in change and keeps them willing for changing future scenarios
as well. Just as in most cultures around the world, people believe
that the spirit may not find peace (some even believe that the spirit
may even come back) if last rites are not properly performed. It is
important to provide closure by removing remnants of the previous
systems, processes and so on that are no longer in consonance with
the new requirements.
In fact, even in cases like online ERP implementation, many a
time, failure is brought about by people continuing to find comfort
104  Alchemy of Change

in off-line spreadsheets. It is important to set up a mechanism to

monitor that people do not resort to old ways, or find a via media
through human ingenuity, at least for six months.

Project Management Approach

Based on change efforts in more than 200 companies, Sirkin,
Keenan and Jackson29 formulated four factors that determine the
outcome of any change/transformation initiative, and what they
called the hard side of change management.

D. The duration of time, until the change programme is completed

if it is a short lifespan, else the amount of time between reviews
of milestones.
I. The project team’s performance integrity; that is, its ability to
complete the initiative on time. This depends on members’ skills
and traits relative to the project’s requirements.
C. The commitment to change that top management (C1) and
employees affected by the change (C2) display.
E. The effort over and above the usual work that the change
initiative demands of the employees.

Using the study, the authors found that complex projects should
be reviewed fortnightly; straightforward initiatives can be reviewed
every six to eight weeks. Further, since the success of change
programmes depends on the quality of teams, companies must free
up the best staff, while making sure that day-to-day operations do
not suffer. Members’ roles, commitment and accountability are
clarified, team composition and team leader’s selection is carefully
done based on problem-solving skills, result orientation, ambiguity
tolerance, organizational savvy, willingness to accept responsibility
for decisions and lack of craving for limelight.
No amount of top-level support is adequate. Writers developed
a rule of thumb: When the top leaders feel that they are talking
up a change initiative at least three times more than they need to,
managers feel that the top leaders are backing the transformation.
 Sustaining Change  105

Support of mid-level managers, supervisors and workers is also

critical.
Project teams must calculate how much extra workload will
come to employees during the change effort, in addition to their
regular day-to-day work. The additional workload should not be
more than 10 per cent. If it is more than 10 per cent, people shirk
additional responsibility; current performance starts suffering and
this, in turn, can lead to people raising doubts on the desirability
of change itself.
These operational issues run the risk of being neglected. Just
as no change can be brought about by neglecting the human–
emotional aspects, change can also fail if the project management
issues are not fully planned and taken care of.
 Part IV
Your Toolkit for Change
 C hapter
14
It’s a Team Game

Talent wins games, but teamwork and intelligence wins championship.

—Michael Jordan

Teamwork is the backbone of any successful enterprise. Pockets of

individual excellence cannot solve present-day complex problems.
Organizations must learn how to derive maximum benefit from
the collective wisdom and generate synergy. Hellen Keller, a well-
known American author, says, ‘Alone we can do so little; together
we can do so much.’
The commitment in exceptional teams is so high that the team
members are committed to group goals above and beyond their
personal goals. They see themselves as belonging to a team rather
than as individuals who operate autonomously.
For effective functioning of any team, it is necessary that the
team members support each other, have faith in each other and
generally behave in a consistent and predictably acceptable fashion.
The key note of team building and its functioning lies not in
surface level skills but in basic values supplemented by obligation
orientation.
Arun Wakhlu,30 in his book Managing from the Heart, lists the
following characteristics of good teams as follows:

  1. A good team is clear about what it wants to achieve. The

values associated with the vision are clearly shaped by
110  Alchemy of Change

the members of the team. There is shared strength of a

common purpose, common struggles and the enabling vision
creates a focused energy towards their purpose.
  2. There is strong partnership in the team and members show
support for each other. There is high level of openness and
trust. The mutual understanding, love and respect that
is shared in a good team creates an emotional support
group, which helps the team to persevere in the face of
challenges.
  3. Roles are clearly defined and all members know how their
work fits in with the big picture. The experience, talents,
knowledge, skills, contacts, spiritual and emotional strengths
of all members combine and synergize into something far
beyond the individual capabilities.
  4. Both collaboration and harmonizing differences are used to
get the best results. Differences are seen as opportunities for
creative thinking and growth. Issues are always confronted
and dealt with openly.
  5. There are sound and understood procedures in the team as
also a set of agreed norms that people have mutually worked
out and follow. A common working approach is defined.
  6. Relationships with other groups and teams are sound. The
team is well integrated with its environment.
  7. The prevailing spirit in the team is strongly ‘can do’ and the
commitment to team goals is high. It has a powerful bias for
inspired action.
  8. Individual and team development needs are regularly looked
at and planned for.
  9. The team has a high standard of leadership and it is in the
most appropriate hands.
10. The team regularly reviews its progress on the task against
agreed performance standards and how it is functioning as
a team. Regular reflection on experiences and conscious
learning is a way of life.
11. In high-performing teams, people hold themselves mutually
accountable for results. There is an atmosphere of joy and fun
along with focus on the work at hand.
 It’s a Team Game  111

12. Finally, a good team is held together by spirit. It is the central

dominion of the heart, in the individual and collective life of the
team, which gives it the magical quality of a high-performing team.

The closer the members of a team are to their own real self, the closer they
come to each other. A wholesome team, because of its common spirit,
is more like an organism rather than a hierarchical structure.
Everyone’s thoughts, words and actions resonate with the same
core. Boundaries melt away, and one’s identity merges with that
of the team. Each one’s problem becomes everyone’s problem.
Everyone’s strengths and resources are shared by all. Phil Jackson,
American professional basketball executive and former coach, has
said, ‘The strength of the team is each individual member and the
strength of each member is the team.’
One of the critical indicators of a learning team is that there are
visible idea conflicts. Peter Senge states:

In great teams, conflict becomes productive. Even when people

share a common vision, they may have different ideas about
how to achieve that vision. The free flow of conflicting ideas is
critical for creative thinking, for discovering new solutions no
one individual would have come to on his own.31

The core group at Mega Corporation had its share of conflict

situations and the team was not characterized by an absence
of conflict. Teams normally converse through dialogue and
discussion. Dialogue is the process of presenting different
views to discover a new idea for a richer grasp of issues and
does not seek agreement. Discussions take place with a view
to take decision so as to converge on a course of action. Here,
the views are presented and defended. Sometimes, the process
of defending the views strongly and taking a stand about it
creates a situation of conflict. Since the core group at Mega
Corporation was committed to the objective of change and
had faith in each other, the conflicts could be resolved keeping
aside individual identity and ego.
112  Alchemy of Change

Even with the right team in place, it takes time for the team
members to align themselves in a clear direction. With clarity on
objective to be achieved, as a team, the members must thoroughly
understand and follow the procedures as also the set of norms that
have been mutually worked out for effective functioning of the team.
Partnerships are necessary for fostering good teamwork and
realizing a common purpose. Partnerships call for immense trust,
and, therefore, are as much a reflection of the state of mind as they
are of the physical assets of each of the contributing partners. The
outcome is one real partnership with sharing and concern as its core
values and which enables not only the survival but also sustaining
a competitive advantage.
Key factors in team development are commitment, trust,
purpose, communication, involvement and process orientation.
Team members must see themselves as belonging to a team
rather than as individuals who operate autonomously and should
be committed to group goals. Team members must have faith
in each other, support each other and feel a sense of ownership.
Everyone in the team has a role, and the team understands how it
fits into the overall business of the organization. Despite differences,
team members must feel a sense of partnership with each other.
Teamwork is the ability to work together towards a common vision.
Once a team understands why it is together and where it is going,
it must have a process or means to get there. The process should
include problem-solving tools, regular meetings, meeting agendas
and minutes, and accepted ways of dealing with problems.
The success of teamwork depends largely on the capacity of
the individuals to look beyond their narrow horizons of esteem,
preferences and gain, by following the path of self-restraint, self-
control and renunciation. If a team is to reach its potential, each
team member must be willing to subjugate his personal goals for
this higher purpose.
The key to team building lies in basic values, amplified by
obligation orientation. Teams break up or become weak because
the leaders adhere to surface-level skills in preference to deeper
values of management ethics, and there is a sense of ‘entitlement
and rights’.
 It’s a Team Game  113

Communication Is the Lubricant

The success of any change programme depends on persuading
employees to change the way they work, which people accept
only if they can be influenced to think differently about their jobs.
Communication is, thus, the most essential ingredient in managing
change. Studies have shown that the most common cause of failure
of major change projects has been the lack of communication with
those affected by the project. It is the most important tool in obtaining
buy-in from employees at all levels for the changes that will be
necessary to implement change project. Any organization that thinks
about change but does not communicate its intention to its employees
is either creating much more difficulties than necessary for itself or
is heading for outright failure of the change project. Maintaining
secrecy about the change programme could create mistrust, anger
and resentment, all of which can destroy the programme.
Kotter10 states:

Major change is usually impossible unless most employees are

willing to help, often to the point of making short-term sacrifices.
But people will not make sacrifices, even if they are unhappy
with the status quo, unless they think the potential benefits
of change are attractive and unless they really believe that a
transformation is possible. Without credible communication,
and a lot of it, employee’s hearts and minds are never captured.

Employees need information and guidance on why the change is

necessary and the effect it will have on them. Communication can
help in overcoming their sense of insecurity, which they naturally
feel as their comfort zones and methods begin to shake up. It is
reassuring for them to have their fear acknowledged. Organizations,
therefore, need to communicate to employees what the change
is, how it will occur and why the change was necessary. Paint
a threadbare image of current state and a vision of a new state
using success stories to boost their confidence. Employees should
feel assured that changes will make things better. If we operate in
secrecy or under-communicate, people would fill communication
114  Alchemy of Change

voids with rumours, attributing the worst possible motives to those

in control. Dave Ulrich states:

Companies have no choice but to try to engage not only the

body but also the mind and soul of every employee. Employee
contributions go up when employees feel free to share ideas,
when they feel that key individuals in the firm have their interests
in mind, and when they feel a valid and valued employment
relationship with the firm.32

The following things are important in communication:

1. Drawing etymological connection with another word,

communion, John Maxwell says that communication is not
transmission of knowledge of ideas, but to ‘connect’ with the
other. How can we present it as a ‘heart-to-heart’ talk?
2. Even at the risk of repetition to the extent of being boring, do
it again and again.
3. Trying to create a consensus. Jack Welch states, ‘Consistency,
simplicity, and repetition is what it’s all about…. It requires
countless hours of eyeball-to-eyeball back and forth. It involves
more listening than talking. It is a constant, interactive process
aimed at (creating) consensus.’14

In a recent edition of the Fortune magazine, Jack Welch is further

quoted as saying:

You have got to talk about change every second of the day.
When you say something, say it with well-chosen words, say
it with your eyes, say it with your body. Then say it with your
head and heart. Then say it again. And again. Till you get the
feel that you have been understood.33

The essence of a situation is sometimes hard to express, so the

leaders must make use of different modes such as images, symbols,
stories and allegorical language. We need to show people some­
thing that addresses their anxieties and evokes faith in the vision.
In today’s high-tech age, we can develop a dramatic situation
 It’s a Team Game  115

through presentations, using evidence we can see not just words and
numbers. This might get people grounded in different contexts
and with different experiences to grasp things intuitively, and move
out of bunkers, ready to move ahead with a sense of urgency. We
must, however, remember that all communication should be honest, even
if it is unpleasant. Honesty further reinforces clean intent.
Alignment of managerial group being a critical success factor,
communicating a clear image of the future to them is the first step
for managing change. This managerial group, consisting of middle
and line managers, is the one which comes in direct contact with the
employees and can play a significant role in developing awareness
of the changing business environment and also support for change.
Kotter lists seven keys to communicating effectively10:

I. Simplicity: Effective communication is directly related

to the clarity and simplicity of the message. Focused,
jargon-free information can be disseminated to large
groups of people at a fraction of the cost of clumsy,
complicated communication. Techno-babble and
MBA-speak just get in the way, creating confusion,
suspicion and alienation. Communication seems to
work best when it is so direct and so simple that it has
a sort of elegance.
II. Metaphors, analogies, examples: Colorful language has
great power to communicate complicated ideas quickly
and effectively. Well-chosen words can make a message
memorable, even if it has to compete with hundreds of
other communications for people’s attention.
III. Multiple forums: Communication is most effective
when many different vehicles are used—large group
meetings, memos, newspapers, posters, and informal
one-on-one talks. When the same message comes from
six different directions, it stands a better chance of
being heard and remembered.
IV. Repetition: The most carefully crafted messages rarely
sink deep into the recipient’s consciousness after only
one pronouncement. Our minds are too cluttered, and
116  Alchemy of Change

any communication has to fight hundreds of other ideas

for attention. All successful cases of major change seem
to include tens of thousands of communications that
help employees to grapple with difficult intellectual and
emotional issues.
V. Leadership by example: Often the most powerful way
to communicate a new direction is through behavior.
When the top five or fifty people all live the change
vision, employees will usually grasp it better than if there
had been a hundred stories in the in-house newsletter.
When they see top management acting out the vision,
a whole set troublesome questions about credibility and
game playing tends to evaporate.
VI. Explanation of seeming inconsistencies: In successful
transformations, important inconsistencies in the
message employees are getting are almost addressed
explicitly. If mixed signals can’t be eliminated, they are
usually explained, simply and honestly.
VII. Give and take: Communication is often such a difficult
activity that it can easily turn into a screeching, one-way
broadcast in which useful feedback is ignored and
employees are inadvertently made to feel unimportant.
In highly successful change efforts, this rarely happens,
because communication always becomes a two-way
endeavor. Even more fundamentally, two-way
discussions are an essential method of helping people
answer all the questions that occur to them in a
transformation effort.

J. D. Duck, focusing on the need for repeated communication

says that unless managers have talked enough number of times for
people to start believing, interpret and internalize in their mindset,
the communication is inadequate.34
Just disseminating information so many times, however, is
not enough. James A. Champy, while stressing upon the need of
two-way communication, says that instead of communication,
what we need is conversation. Not only these conversations should
 It’s a Team Game  117

be across the organization, they should be about the drivers and

implications of the whole effort.35

The focus of communication strategy in Mega Corporation

and AG Corporation was to communicate continuously and
tirelessly in all directions, to every member of the organi­
zation, regardless of position or seniority. The situation in
the company was analysed; purpose of communication was
established for different target groups, keeping in mind their
interests and approach to change; and clear objectives were
laid down before creating messages and selecting the mediums.
Since inadequate communication is one of the chief reasons
cited for failed change efforts, all out efforts were made to
create relevant and meaningful messages for different target
groups to maximize impact. There were three main target
groups for communication and the messages were clearly and
appropriately created for them every time, depending on the
context and the content of communication. Besides regular
meetings with managers and the union, circulars were sent
frequently, addressed to workers, supervisors and managers, to
keep all concerned informed of the developments and sharing
facts, progression in thought and information. The union was
a totally divided house, with major differences and divergence
of opinions based on the personal agenda of leaders, and
this was proving to be a major obstacle in implementing
the change program. It was therefore considered desirable
to communicate directly with the workers. Since an honest
and direct mention of this fact in the circulars to workers
could have offended the union, thereby further complicating
the situation, disguised circulars were issued, which were
seemingly addressed to managers and supervisors, but meant
for and made accessible to the workforce. In these circulars,
the dissensions within the union, proving to be main obstacle
for the settlement, were highlighted so that the workers could
exercise pressure on leadership for an early and just settlement.
118  Alchemy of Change

Managers of all the business divisions were communicated

the vision for change, a clear image of the future state and
its process. This was done by all the business heads and the
change facilitator (members of core group) jointly. This was
two-way, face-to-face communication, where they were
encouraged to challenge, question, seek clarifications and
come out with disagreements and apprehensions. We should
remember that employees’ views, concerns and questions
are important and constructive, not threats. Communication
meetings took place in various business divisions, which
were marked by active participation and evoked interest
and commitment. These communication meetings were
of great help in motivating the managers and giving them
the confidence that the management was supporting them
wholeheartedly.
Similarly, presentations made by business heads before
the executive body of the union were also a part of the
communication strategy. This was also two-way, face-to-
face communication where the union was communicated
the picture of existing business scenario vis-à-vis competition,
present position of the company and future business plans.
Hard comparative data of the company and those of
competitors were made available, and a compelling picture
was created of the opportunities available and also of the risks
of not changing. The union president later mentioned that the
best part of the management’s strategy was the presentation
made by business heads to the union. It was a great attempt
at creating comprehensive awareness.

In a situation where we intend sharing a holistic perspective of

what needs to be done, top-down communication might become
necessary but cannot be fully realized without a horizontal channel
as well. Change cannot be enforced from the top level down but
needs to be understood and adapted by all involved so that the
resistance against change is minimized.
 It’s a Team Game  119

Besides the clarity and simplicity of the message, it is also

important to be aware of the psychology of the target group and
the communication should be customized, also keeping in mind
the timings and the occasion. We must strike the right notes of
optimism and realism and carefully calibrate the timing, tone,
contents and positioning of every message. We can communicate
more effectively when we know what pieces of information
people need to know at a particular time and what the feelings of
the persons involved are. Arguments would fail to convince people
unless we relate to the audience at the right emotional level. With
focused and tailored approach, we should be able to walk into the
shoes of another, in the right way and at the right time to generate
the desired response. When we truly know how the other person
feels, we can communicate with him more easily and lead more
effectively.
Even efficient managers either under-communicate or inad­
vertently send inconsistent messages. In 1993, Wyatt Company
(now Watson Wyatt Worldwide) investigated 531 US organi­
zations undergoing major restructuring. Wyatt asked the CEOs,
‘if you could go back and change one thing, what would it be?’
The most frequent answer: ‘The way I communicated with
my employees.’ An effective communication plan is one that
contains the four critical elements of communication, namely the
right message, to the right audience, at the right time and from
preferred senders.
The right attitude and honest intentions in communicating
with our employees can help us take a giant leap towards winning
employee trust and commitment. True commitment is the energy
or enthusiasm that drives every employee, irrespective of the level
at which he is working. If we are honest and our expression is true
to our experience, our communication becomes authentic. As a
wise Indian sage put it: ‘May my word be firmly established in my
mind. May my mind be firmly established in my word.’
Authenticity and credibility in communication is possible only
through consistency in conduct. People trust others when there is
transparency of action, when they are told that something will be
initiated or completed, and it does. Ineffective communication,
120  Alchemy of Change

especially during the period of change, results in either creating

or increasing mistrust and that is why there is a need for effective
and persuasive communication, especially during periods of major
change.

In AG Corporation, communication played a vital role in

creating awareness, promoting acceptance and developing
support for change. Being a small unit, the focus was on
two-way face-to-face communication meetings with managers
and supervisors, sharing need, plan and strategies. The
approach was to communicate continuously and tirelessly.
Understanding the importance of communication and
preparing the organization for change, the CEO himself
was conducting all communication meetings, and it had the
desired impact. It was through these meetings that a shared
vision was created, and all the employees got involved in the
process of change.

Role of the Front-Line Supervisors

Prosci’s research says that when a supervisor tells an employee
about a major restructuring project, she may include the business
reasons for change, the risk of not changing, and the urgency to
remain competitive, he and his family hear that the company is in
trouble and he may not have a job post-change.
The supervisor needs to talk to the employee about how
the change will impact him and his team including day-to-day
responsibilities and nature of work, whether he and/or his team will
continue, what they will get and what they are likely to lose. Any
beating around the bush on these aspects will only heighten anxiety.
Of course, the way an employee receives this information will also
be influenced by his age and family situation, health, financial and
education challenges, his perceptions about the marketability of his
skills and credibility of his front-line supervisor.
 It’s a Team Game  121

One of the best ways to ensure the success of change effort is to

treat supervisors as the key link pin in communication process and
direct major effort towards regular briefings of these supervisors,
who in turn communicate the message to front-line employees
one-on-one. Larkin and Larkin say: ‘All the resources previously
spent communicating indiscriminately are aimed at communicating
with supervisors, who are given information, influence, and thereby
increased power and status. As a result, they are more likely to help
implement change.’36
David Leonard and Claude Coltea from Gallup assert that
70 per cent of all change initiatives fail because change agents overlook
the role front-line managers play in the success of the initiative.37
It is, therefore, necessary that the front-line supervisors have a
detailed idea about how the change will manifest on the ground and
are fully trained to handle anxieties without giving vague answers.
The other major source information, credible or otherwise,
is top management. The top management alone should address
issues related to why change is necessary and how it aligns with the
organization’s need to survive and prosper in a changing environ­
ment as well as what are the consequences if the organization does
not embark on the change process. Naturally, it is assumed that
the top management will have the necessary trust and credibility
to be taken as face value. This will be coloured by employees’
perceptions of past announcements and how they panned out. If the
management has not been mindful of the impact of their decisions
and actions in the past, any communication howsoever genuine will
be taken with a pinch of salt, to say the least.
Since the way an employee seeks to validate whatever
information he gets from the supervisor and the top management
from his reference groups, the role of influencers and opinion
builders also becomes important. They also need to be taken on
board.
The management not only needs to be clear how the information
is disseminated through them, front-line supervisors and influencers,
but also be mindful of how the information is being perceived on
real-time basis. In case of any ‘noise’, blockade or filtering, remedial
actions need to be taken in time.
122  Alchemy of Change

During the normal course of work in Mega Corporation, there

would not be much of interaction between supervisors and
workers and all work-related problems were handled through
the union leaders. Similarly, the union leaders who were
briefed about the changing scenario during the presentations,
training programs and negotiations, were themselves opposed
to change due to their own vested interests. Circulars had
only a limited impact due to low credibility and lack of trust
in management. The error committed in this case was of not
involving the front-line supervisors in the communication
process, thinking that a majority of them had no supervisory
potential, having been promoted from workers category,
based on seniority. In fact, the first word employees hear
about change should come from the person to whom they are
close with on a day-to-day basis: their supervisor.
So it was decided to communicate to workers through
managers, through union and through circulars. Managers
were trained to communicate with the workers, thinking that
they come in direct contact with them on day-to-day basis
and based on their working relationship, would be able to
develop awareness about the changing scenario and support
for change, and forgetting that there was a wide gap between
the workers and the managers.

Peter Senge has a word of caution:

When communicating with people about new ideas and new

business practices, it is not necessary to absolutely convince
them. It is important to help them see that the story you are
telling is ‘on their side’, and therefore worth listening to. It need
not align perfectly with their point of view. But it needs to show
that their point of view is treated fairly, and that they are not
cast as outsiders.31

As mentioned in chapter 11 (Designing Change Strategy), employees

need to be engaged in the process from the initial stages. It is not
 It’s a Team Game  123

necessary to be ready with change plan and strategies before starting

communication. We can start communicating about the need for
change and the risk of not changing. This would keep the employees
involved from the earliest stage and a party to the evolution of
thought. Since change is personal, it is important to connect with
people on a personal level, which will help them address concerns
they might have about the impact of change.
 C hapter
15
Culture of Learning and
Innovation Helps

An organization’s ability to learn, and translate that learning into

action rapidly, is the ultimate competitive advantage.
—Jack Welch

When Microsoft Enterprise Services wanted to enhance its

credibility in its Change Management services as a competitive
advantage, it partnered with Prosci to create a community of
change practitioners and subject-matter experts through extensive
training. This training ultimately covered 25,000 employees across
the entire Microsoft organization, creating 2,250+ certified change
management practitioners.
Oshkosh Corporation, a Fortune 500 company manufacturing
toughest specialty trucks, deployed Prosci’s change management
technology and got its managers trained through a series of role-
based trainings for successful management of change.
Likewise, every successful story of change management
worldwide is also a story of how seriously change management
training was taken as a vital component. For example, GSK got
1,250+ managers certified as essentially change management
practitioners.
126  Alchemy of Change

Training initiative at Mega Corporation was planned keeping

in mind the objectives of creating awareness about the business
environment, sharing the vision of change, aligning various
sources of energy, overcoming the sources of resistance,
developing effective teams, evolving right attitudes and values
and enhancing the level of motivation and competencies.
It was felt that management of change involves multilevel
exercises that required involving employees across all the
hierarchies, that is, managerial and non-managerial staff.
This involvement produces both vertical and horizontal
interactions, which need functional as well as behavioural
skills of leadership and communication.
Various programs were accordingly organized for opera­
tions heads, functional heads, divisional heads, line managers,
personnel managers, union executive and the negotiation team.
These programmes were not off-the-shelf training programmes
but were designed to meet the unique cultural and behavioural
requirements of large-scale change at Mega Corporation in
particular. Education that supports organizational change
differs substantially from education that supports individual
development, and thus, the focus of all these efforts was
on the development of competencies and widespread skills
needed for coping effectively with change. The programs also
aimed at giving an understanding of the need for change and
how it was going to affect structure, systems, processes
and people. Employees were given opportunity to practice
the new behaviours in simulated situations that would occur
during the change process.
Initially, two trainers were engaged to conduct these
programs. One was an expert of contemporary trends in
production, implementation and innovation happening
around the world. The other was oriented towards Indian
ethos and value-based management. The selection of the
trainers was based on two central considerations, namely
 Culture of Learning and Innovation Helps  127

the new ambient and emerging culture and the human

response, which considers the characteristics of Indian psyche
that govern behavioural patterns. After a few sessions with
these trainers, it was felt that their orientation was rather
mechanistic, with quick fixes that lacked the sincerity for
a deep-rooted and long-term success of the initiative. It
was imperative to have trainers with long-term vision and
sensitivity to the cultural grounding of the trainees. From
there on, well-trained internal faculty conducted all the
programmes.
In the case of AG Corporation also, various training
programs were organized for different levels of employees
to inculcate desired behavior and honing personal skills
necessary to implement the change process. These initiatives
helped in creating a learning environment in the organization
and a supportive climate for change. All other capabilities
come alive when the learning capability is nurtured. And it
was all happening right here at AGC.

Organizational change cannot take place without learning.

How can an organization improve without first learning something
new? Change requires doing things differently, which needs new
attitudes, ideas, values and skills. New competencies such as
knowledge of business as a whole, analytical skills and interpersonal
skills are necessary to identify and find a solution to problems.
It also requires the ability to see things in alternate ways and
displacement of concepts in order to gain new insights. Solving a
problem, introducing a product, and re-engineering a process all
require seeing the world in a new light and acting accordingly. In
the absence of learning, individuals simply repeat old practices. For
change to take place, people must start doing things and behaving
differently. Change and learning, thus, being intimately related,
our aim should be to develop an organizational climate which
has the capacity to learn. Well-known management consultant
128  Alchemy of Change

M. B. Athreya declares, ‘Not only will the global market reward

learning handsomely; it will severely punish the lack of learning.’
Only the most productive companies are going to win. If
we cannot sell a top-quality product at a competitive price, we
are going to be out of the game. The companies that survive in
times to come will be those that are able to respond quickly and
effectively to changing environmental needs. Be it manufacturing
or service industry, developing and delivering products or services
requires higher skill levels. An organization’s competitiveness will
get exhibited not only in its ability to source raw materials, cheap
capital or skilled hands, but also in its ability to acquire, enhance,
share and leverage relevant and new knowledge. We will have to
develop capabilities like being adaptive, flexible and responsive,
and will have to learn and act at a faster rate than our competitors.
The continually changing world of business requires strategies
for sustaining organizational competence, which could lead to
newer insights and more integration within the organization. An
important question is not about ‘doing things right’, but about
‘doing the right things’. Whether it is development of people in
organizations, the improvement of customer service or improving
the bottom line, each one involves new ways of doing things, and
success depends upon our ability to create new capacities for such
action. Only a continuous process of learning can bring this to
fruition. Alvin Toffler says that, ‘Illiterates of the 21st century will
not be those who cannot read and write, but those who cannot
learn, unlearn and relearn.’38
Only 60 of the top 500 Fortune companies in the United States
have maintained themselves on the list from 1955 to 2017. What
causes an organization to fail can best be explained by their inability
to change when required to maintain their position of strength.
They lacked the decisiveness to make the tough decisions that were
needed in the changing business environment.
Highlighting the importance of learning, Bhishma, in his advice
to Yudhishthir and Pandavas on his deathbed, said that leadership
needs an education for itself. There ought to be a good deal of self-
analysis and direction towards what is the duty of the model king
(leader). The only duty the king (leader) has to do is to continuously
renew himself towards his duty.
 Culture of Learning and Innovation Helps  129

Nilakant and Ramnarayan view training as an important tool

for managing the change process:

Training has become an important tool of OD for comm­

unicating and involving employees in the change process.
Training programs are also used to generate ideas and
develop collaboration among employees from different
departments. Training focuses not merely on skills, but also on
the development of new roles, new systems, new procedures
and new work methods. Training workshops and conferences
represent the initial steps in organizational change process. They
raise the consciousness of participants, make people aware of
the gaps between reality and ideals, provide a common platform
to articulate shared problems and difficulties, generate ideas for
change, and create greater awareness for change.8

Training focuses on honing personal skills in managing change,

that is, the skills necessary to implement the change process such as
leadership skills, conflict management skills, skills of a change agent,
effective communication and so on. Employee training can set the
supportive climate for change management when it is competency
driven, the competencies the company needs.

Not Through Training Alone

Learning is not through training alone. In fact, classical under­
standing is that 70 per cent learning is on the job, 20 per cent is
through mentoring and only 10 per cent is through formal training.
T. V. Rao states:

Much of the learning in organizations is informal, incidental,

anecdotal or event-based, cognitive, reactive and could be
negative. It is informal because there are few planned learning
spaces created for it by organizations. It is based on incidents
and anecdotes because of this informal nature. When an
incident occurs, the learning takes place. Organizational life
is full of events and problems…. Some learning takes place
130  Alchemy of Change

in the process of problem solving. ….It should be planned by

creating learning spaces. At present the only learning space that
is formally available is the training programs. Every meetings,
discussion and interaction between two or more people can be
made as a learning space, provided such attitude is inculcated
and a learning culture developed.39

In AG Corporation, the process of learning was

created through sharing of experiences in the
weekly review meetings, conducted by the execu-
tive director. Everyone would share his experience,
be it a success story or failure or any important
development related to product, customer, process
and so on. Work life is full of events and problems,
and every incident could be a source of learning.
Gradually, these weekly review meetings became
important forums. Problems and issues highlighted
during the experience sharing were openly discussed
and issues were confronted rather than put under the
carpet. This not only encouraged the team members
to express ideas, opinions and views but the process
was institutionalized as a great learning opportunity.
It was also obligatory for members to share their
success and failure stories during reviews, irrespective
of whether they were small or big wins. This proved
to be the most effective platform of learning.

Learning from Failures

Each one learns from the experiences and best practices of others,
remaining fully informed of developments throughout. Great
learning takes place while sharing the cases of failure, which lead
us to insight and better understanding. Failure is the best teacher,
provided we are willing to learn from it. Such learning, when spread
throughout the establishment, becomes organizational learning.
 Culture of Learning and Innovation Helps  131

With a sustained attitude, this learning turns into the established

way of doing things, almost like a culture woven into the fabric of
the organization.
Hubler40 talked about four constructs as integrally linked to
organizational learning: Knowledge acquisition, information distri­
bution, information interpretation and organizational memory.
Learning need not be conscious or intentional. An entity learns
if, through its processing of information, the range of its potential
behaviours is changed.
For developing a learning culture, it is necessary that the
corporate environment is supportive and conducive to learning.
Learning will only occur in a receptive environment. An environ­
ment where innovative ideas and instinctive values are honoured,
originality is respected and people are not questioned for their
bona fide decisions, where people are encouraged to give their ideas
and opinions, where there is collaboration and teamwork, where
innovative ideas do not die in the originator’s mind and where intuitive
values are honoured are the key prerequisites towards creating an
organizational climate of learning.
Taking this construct further, Peter Senge 41 popularized
the concept of learning organization as ‘an organization that is
continually expanding its capacity to create its future’.
Underlining this as a key to success in the present context, Bill
Gates42 says:

Knowledge is becoming the critical success factor in most

businesses. Learning organizations that allow employees to pick
up new knowledge and innovate constantly are obviously the
ones that will generate a sustainable competitive advantage. The
successful companies are typically the ones that learn to think
differently from the herd, process information more intelligently,
come to different conclusions and make different decisions to
move ahead of competitors.

The spirit of the learning organization comes from the continuous

learning of people, and success comes to those who master the
art of this continual and rapid learning. It is also important
132  Alchemy of Change

that organizations embed this knowledge into their systems and

processes. This ensures that change is eventually managed in an
environment that is now aware, knowledgeable and capable.
However, converting an organization into a learning organization
is not a short-term project. Nilakant and Ramnarayan emphasize:

Attitudes, values and behavior have to be cultivated slowly

and steadily over a period of time. An appropriate climate for
learning needs to be created. This includes training people in
appropriate skills related to problem solving, brainstorming,
statistical analysis, conducting experiments and so on. Creation
of cross-functional teams, rotation of people across departments
and rewarding collaborative behavior, are some of the ways to
promote learning across departments.8

The first step taken by Mega Corporation was to set sight

on a standard of attainment, based on the best practices and
norms in the industry. Information and data were collected
on best practices and various other parameters, especially
from organizations with whom the company competed for
business. The core group then went through the process
of analysing the data, measured gaps and completed the
benchmarking. Benchmarking enables us to seek out the best
standard set in everything that the company does. It offers a
goal that is attainable. Benchmarking is not primarily a data
gathering exercise. More important than the comparative
data are the underlying processes that produce that great data.
Good benchmarking analysis produces two types of infor­
mation: quantitative data to measure performance and to set
future targets; and qualitative information on the key success
factors that explain how the benchmarked company became
the best.

Change management involves several sets of players—people

who visualize and inspire the change, people who facilitate change
 Culture of Learning and Innovation Helps  133

and people who execute the change, as well as people who monitor,
measure and keep the change rolling.

At Mega Corporation, it was also considered necessary

that all those involved in change should be communicated
the findings from the benchmarking exercise so that they
could re-examine the overall strategy in light of what is ‘best
peer standard’, and incorporate these new learnings into
the strategy. A one-day workshop was organized for all the
business divisions before initiating negotiations with the union.
This was attended by key line managers, finance, HR and
marketing personnel, besides the members of the core group.
Operation heads first made a presentation about the business-
specific strategy for change, which was later juxtaposed with
the information about best practices and benchmarks. The
very idea of the workshop was to share the information, build
enthusiasm and support in the cross-functional team involved
in change process. Various cross-functional teams were also
constituted for redesigning business process, tackling critical
issues of existing incentive schemes and division-specific
business issues. There was a need to bridge the gap between
the existing abilities that the members of the cross-functional
teams possessed and the abilities they needed to perform
these tasks—such as self-directed leadership, self-motivated
teamwork and self-generated creativity. Various training
programmes were, therefore, designed and organized to
bridge this gap.

Innovation
Today, the battle is for speed and innovation, as top quality
and competitive pricing are not enough, and we need new ideas
and new processes that should enable us to win customers. Speed
of response to the customer is, thus, becoming a critical factor in
134  Alchemy of Change

the competitive marketplace. Innovation is a critical factor when

it comes to being competitive. We need new skills and expertise or
have to apply the existing skills in a more efficient manner.
Innovation is not just about developing new products and services;
it requires people to do something different and in different ways,
in order to create added value. It is about discovering new ways to
create and capture value through non-traditional approaches and
converting problems into opportunities. Innovation does not always
involve new products, services or business model. Sometimes it can
be as simple as a new slogan or a new marketing message.
Innovation means uncommon sense, which in turn, is a mindset
that seeks to create and unlock new value by challenging prevailing
rules of the market. It is a constant process of analysing the market,
identifying gaps, understanding the organization’s capabilities
to deliver on those and maintaining a really close relationship
between marketplace and the organization. A truly innovative
company never stops encouraging its stakeholders, particularly
employees, asking them fundamental questions about its successful
products, exploring possibilities or even imagine a completely new
product/service. Such companies discover and utilize their special
capabilities, which help them deliver products and services better
than the competitor does.
Innovation does not mean new products and technologies
alone. It could quite possibly be change in organizational culture
or change in the way we work and so on. It is always more than a
creative thought or creativity.
Operational improvements should not be confused with
innovation. Efforts for operational excellence or improvements
refer to achieving higher performance by reducing errors, lowering
costs and avoiding delays but without fundamentally changing
how the work gets accomplished. Innovation requires ability to
look at problems from different perspective and come out with a
larger number of solutions and entirely new ways of working. It is
the ability to restructure the problem differently and to discover
unconventional ways to unlock the new value.
Innovation is not something we can switch on and off. We
need a culture for innovation so that it sustains and remains
 Culture of Learning and Innovation Helps  135

useful. The commitment of the CEO is essential for creating a

culture of innovation. The CEO must meet rank and file, get
ideas, involve people and create a culture of openness to ideas. He
must be dedicated to innovation and its power and emphasize its
importance in all his communications. Though the commitment of
the CEO is essential for creating a culture of innovation, it would be
wrong to say that only CEO should create innovation. Innovation
has to be one of the key responsibilities of every employee, and the
company must embed it as an organizational capacity.
Talking about the importance of innovation, N. R. Narayana
Murthy43 says, ‘I have always believed that today it is not that the
big that eat the small. It is the agile one that eats the latter. It is the
innovative one that eats the slow learners.’
Many a time, companies avoid innovation in order to push
profitability. In such cases, the obvious result is failure, as happened
with Kodak, which failed to embrace change in the market. People
within Kodak tried to draw company leader’s attention to the world
of digital cameras evolving outside the company. Company leaders
thought that the world of digital cameras was not as attractive as
the world of film sales and that nothing would change. They failed
to ‘bring the outside in’, and we all know how the story ended.
Companies must see the threats on the horizon and focus on
innovation to avoid inevitable disaster.
For promoting a culture of innovation, it is necessary that
organizations measure and reward employees for innovation-
related activities. Employees who implement a new idea should
be rewarded higher than an employee who does a good job with
conventional mindset.
While leadership is characterized as the catalyst for change,
innovation is the process that brings in new methods and ideas
resulting in required changes. Most managers focus on making
existing processes—the status quo—work a little better. Change
leaders are much more likely to challenge assumptions, lead the
innovation agenda, build space for individuals to innovate and
create a culture that inspires people to take risk.
Creative thinking leads to innovation. In fact, it is the pre­
requisite for change. We look for new strategies, creative and
136  Alchemy of Change

realistic solutions during the process of change. Innovation and

creative thinking is, thus, the key to any successful change effort.
One of the key ingredients for a culture of innovation is freedom
to make genuine mistakes and failures.

Based on Rajan’s experience of working in Japanese multi­

national companies, implementing a programme of Japanese
International Cooperation Agency and LEAD Innovation
Management GmbH Paper by Franz Emprechtinger,44
the following steps can be adopted to establish a culture of
innovation:

1. Management has to set measures and accents so that there

is organization-wide awareness. People must be aware
of culture of kaizen particularly in Japanese and other
organizations inspired by them. Participation is voluntary,
and all employees are eligible. They are also provided
necessary skills, resources and structures, including report­
ing procedure, reward system and so on.
2. Communication and promotion have to be year-round.
So should be its progress reporting a part of every major
meeting year-round. In between, special campaigns can
also be launched, including innovation day, innovation
festival and so on.
3. In the very beginning, targets can be quantitative but
evaluation has to be qualitative.
4. Training on innovation processes and tools is frequently
organized with voluntary participation subject to prior
notice.
5. There are specific designated colourful innovation spaces
with free access on roster basis.
6. Create innovation competition.
7. Reserve innovation budget, including special training as
one of the incentives.
 C hapter
16
90 Per Cent of Change
Management Is People
Management

Those who have changed the universe have never done it by changing
officials, but always by inspiring the people.
—Napoleon Bonaparte

We must remember the most critical principle of change

management: organizations do not change, people do. For change
to succeed in any organization, each individual is important; she
must make her own transition and must think, feel, contribute or do
something different. As Kanter puts it, ‘Change is always a threat
when done to people, but an opportunity when it is done by people’.
Change in attitudes leads to change in individual behaviour and
changes in individual behaviour, replicated by many people, will
result in organizational change. This, in turn, positively impacts
performance and quality, which are actually the root intents of any
change intervention.
Pfeffer says that people are the principal source of competitive
advantage for organizations in the current environment. ‘In the
past, firms achieved superiority over their rivals through product
and process technology, protected or regulated markets, access to
financial resources and economies of scale. These are less important
now compared to how an organization manages its people.’45
138  Alchemy of Change

While considering organization change, it will be worthwhile to

understand current trends among employees and their preferences,
from the point of view of strategies to be adopted:

1. A BCG 2018 study on employees in 197 countries found that

though willingness to relocate has come down globally vis-à-vis
2014 to 57 per cent, it is still 90 per cent for Indians. The
same study also found that top preferences in India are career
development, learning and training opportunities, work–life
balance and good relationship with superiors.
2. As of 2017, the estimated share of millennial employees was 46
per cent in India.
3. In common with other South Asian millennials, these millennials
are high on technology as well as tradition. However, this
generation is highly individualistic, except where it comes
forward for social causes when it feels that it can make a
difference.
4. Use of contract labour has grown phenomenally in industries,
crossing 50 per cent in a majority of industries. Even in white-
collar jobs, temping is fast becoming the norm everywhere. They
may understandably not align with long-term organizational
goals.

We must recognize that change happens only through people. The

emotional effects of change need to be understood and considered
by all involved in the change process. It aims to touch the last
person on the job. Jack Welch46 says that a company today has to
find a way to engage the mind of every single employee. Failure
to do so will result in wasted minds and disengagement.
Why are ‘people’ so important for change? Human being has
an infinite capacity to think, to feel, to love, to disapprove and
to create. He is all the time guided by his emotions, aspirations,
desires, fears and prejudices. This non-business character of
the human element greatly influences his behaviour in the
business environment where various human factors are at play.
Organizational change is about switching off the old mindsets and
switching on the new mental models and processes. Organizations
 90 Per Cent of Change Management Is People Management  139

must remember that this switching has to take place in the minds
of the people. Human being feels secure with his set methods of
thinking and operating and fears new codes of behaviour in lesser
or greater degrees. Hence, organizations that want its people to
contribute with their heads and hearts must understand that the
non-business character of human being is of utmost importance to
bring in new management style and procedures. Management of
change is, therefore, not only rational and empirical management
but also emotional management of people.
Elaborating this aspect, Duck asserts:

The issue isn’t whether or not people have negative emotions;

it’s how they deal with them. In fact, the most successful change
programs reveal that large organizations connect with their
people most directly through values and that, values, ultimately,
are about beliefs and feelings.47

Imagine our challenges to align our workforce and contrast this

with what Sun Tzu says in his book The Art of War, written about
2,500 years ago,

In order to kill enemy, our men must be roused to anger. For

them to perceive the advantage of defeating the enemy, they
must also have their rewards, so that all your men may have a
keen desire to fight, each on his own account.48

The emotions that undermine change include insecurity, anger,

arrogance, anxiety, pessimism, cynicism and so on. People change
their behaviour and gradually develop facilitating emotions such
as optimism, faith, trust, passion, hope and enthusiasm, only when
their emotional concerns are addressed and resolved. Instead
of giving logical reasons for change, we must present people an
emotionally compelling case. In successful change efforts, people
find ways to help others see the problems or solutions in ways that
influence emotions, not just thoughts. Ultimately, organizational
change depends on the way human beings behave and, therefore,
change management should be holistic and people focused.
140  Alchemy of Change

Most people want to identify with the success of their organi­

zation and to contribute to society. People get involved and take
responsibility only if we tell them how to look at it in new ways and
how it is going to improve their world. Any change initiative, no
matter how good it may be, shall remain a theoretical ideal unless
people commit themselves to the change process. We will have
to create a broad base of support for change by integrating and
weaving together the vision of many people, scores of viewpoints,
sensitivities and insights. We also need to establish a process where
we acknowledge and reward people who excel and contribute to
making something meaningful.

People Must Commit to Change Vision

Reflecting on 20 years of Leading Change towards more value-
based work environments, retired Hanover Insurance CEO Bill
O’Brien says, ‘what people pressurizing for management to drive
cultural change don’t understand is: A value is a value only when it
is voluntarily chosen’. ‘Change can also mean top-down programs
like reorganizing, reengineering, and many other RE’s.’ Because
these change programmes are typically imposed from the top, many
in the organization feel threatened or manipulated by them—even
if they support in principle the intent or rationale behind the man­
agement change agenda.
There may be a situation where employees are required to give up
some of their interests and where mobilizing support might become
difficult but they will have to be assured that the change agenda
matches the overall interest of all stakeholders, including their own.

As mentioned earlier, in Mega Corporation, the first step

towards a shared vision was by way of involving the operation
heads of various business units, the key people, next in
command to business heads. The approach of the workshop
for operation heads was participative, making them partners
in planning and strategy making for change.
 90 Per Cent of Change Management Is People Management  141

Developing a shared vision becomes easier if people participate

in planning and implementing the change on the principle that
people support what they help to create. Participation also leads
to better ideas for change.

Managing change requires developing change-consciousness

among people, especially the main targets of change, the
workers in case of Mega Corporation. The workers supported
the union, which they perceived as the protector, and had low
trust in the management. Change cannot succeed unless there
is a critical mass of support, and building that support was a
key problem, especially amongst workers.

Hultman49 enunciates eight reasons why people will support

change if:

• It will make their life easier by eliminating unnecessary, tedious

or unpleasant work.
• It will result in either some personal gain or a new challenge or
opportunity. Risks have to be worth taking.
• If people are convinced that there is a situation of impending
bankruptcy, a hostile takeover, or a decline in market share
and so on.
• They believe that they are being treated fairly. They trust those
responsible for the change.
• They believe the change will work, the time is right for the
change and adequate resources have been allocated to
the change effort.
• The change is consistent with their values or standards and is
important.
• They believe those responsible for the change can be trusted.
Even if people do not completely agree with a change, they are
more likely to go along with it if they trust those responsible for
it. People tend to have confidence in those they trust, and they
tend to be suspicious of those they do not.
142  Alchemy of Change

Successful change also involves the maturity to understand that it

is a culmination of successful execution of a series of steps many of
whom are in parallel, and not sequential. Unfinished execution of
one set of steps can jeopardize the entire change effort. Secondly,
some steps, especially as they relate to winning the trust and
confidence of the people may take some time depending on the
complexity of the situation and the nature of strength of forces
arrayed against. Trying to speed up maybe counterproductive,
because if the people are left behind, the whole edifice of change
may collapse. History of change management is replete with such
examples worldwide, particularly in acquisitions and mergers.
 C hapter
17
Who Is Holding the Reins?

The most critical variable in the change process is the top person’s
integrity: The change team must have good reasons to trust him, his
actions and words must match, he should be sensitive to the needs
of change team and should communicate with the change team in
an open and honest manner. There has to be total transparency
between the CEO and all the members of the change team, without
manipulation and duplicity.

A major strength during the whole process of change

in Mega Corporation had been the support from the
chairperson. However, the general perception was that of
a weak management that could not take firm stances or
could backtrack without a flutter. This was also one of the
major reasons why the managers were frustrated and lost
hope to manage the company. It was an uphill task for the
core group to keep the boss in line and ensure that he did
not lose steam.
Later, when someone shared the people’s perspective with
the chairperson about his leadership—that he did not tolerate
any disturbance in production—and asked as to what made
him take a bold and different stand, he responded:
144  Alchemy of Change

I wanted long term improvement in performance and

efficiencies and thus sacrificed short-term gains. I wanted
to demonstrate as to how strongly we feel about change
and get out of the rut. I would have not succeeded and be
in the present day happy situation, if I had not taken the
stand. Changing human beings is a difficult process and
nothing was possible to achieve without demonstrating
that we mean business. You start standing alone then
others start standing with you.

Yes, no change was possible in Mega Corporation culture

without effective sponsorship from the chairperson. The
firm handling of various situations developed tremendous
confidence amongst the managers, and the whole cadre
became a motivated lot, fully involved in the change process.

Whether the change involves new processes, new job roles, new
behaviours, new organization structure or new systems, the top
leadership must be present to provide the authority and credibility
needed for the change to be successful. Prosci, in its benchmarking
studies, has identified three roles for senior leaders in times of
change:

• Participate actively and visibly throughout the project: Sponsors cannot

disappear once they have attended the kick-off meeting.
Their sustained presence is necessary to build and maintain
momentum for the change.
• Build a coalition of sponsorship and manage resistance: The sponsor
must mobilize other key business leaders and stakeholders so
they can take the change back to their part of the organization.
• Communicate directly with employees: Employees want to hear about
why a change is important from someone at the top—either at
the very top of the organization or at the top of their division.
Senior leaders are looked to for messages about why the change
is being made and the risks or costs if no change is made.
 Who Is Holding the Reins?  145

The role of the sponsor is paramount and a critical contributor

to success. Effective sponsorship can mobilize and activate the
organization while poor sponsorship can inhibit and delay and even
derail the process. An active sponsor lends authority and credibility
to the change, establishes commitment and sends a message as to
how important the initiative is.
Executive sponsorship ensures that sufficient resources are
available, priorities are established between competing initiatives,
other senior leaders also sponsor the change in their areas, and
employees understand why the change is being made and how the
change aligns with the vision of the organization. Lack of effective
sponsorship results in increased resistance from employees, slow
adoption or rejection of change and loss of credibility.

Story of successful change efforts at AG Corporation is

also the story of strong sponsorship of the CEO and his
value-based leadership who was personally involved in
communicating the change vision through regular meetings
with various groups and reviewing the progress at regular
intervals. The case of Akash Industries is a typical example
of another extreme where the chief executive was all the time
advocating change in all his conversations but did nothing
to demonstrate his conviction and commitment to change.

The CEO is the organization’s chief role model and employees

expect him to live up to Mahatma Gandhi’s famous edict, ‘For
things to change, first I must change’. Successful CEOs typically
embark on their own personal transformation journey. They invest
great effort in visibly and vocally presenting the transformation
story. It is a long process, but if we put our face in front of the
people, they are encouraged to support and practice the behaviour.
Narayana Murthy’s 2002 decision to take on the job title of
Chief Mentor at Infosys, for example, meant that he had to reinvent
himself because he laid aside his formal managerial (CEO) authority
at the same time. He explains, ‘You have to sacrifice yourself first
for a big cause before you can ask others to do the same.’
146  Alchemy of Change

The role of the top management is in shaping the vision, purpose

and strategy. There will be leaders at all levels in the organization
but the top management has to mobilize, direct and coordinate
the efforts of leaders at various levels in the organization to achieve
enduring change. Employees would also be willing to commit
themselves to action if the top management has a clear sense of
direction and is able to effectively weave the new organizational
reality into the fabric of the company. Because the process of
changing the culture of an organization takes time, the top
management must make a commitment to the long and demanding
work involved.
The top person must create a sense of purpose by way of
shaping and embedding in the company a set of shared values,
which determine the rationale for which the organization exists.
An ambition in terms of goals or targets is not enough. The goals
will change as the world around us changes but the core values give
an identity to the company and hold the organization together.
In the 2016 edition of Prosci change management study, not
only active and visible executive sponsorship was listed as the most
important contributor to change management success (three times
more than other contributors) but also listed lack of active and
visible sponsorship as the most challenging obstacle. Participants
also reported that ‘a sponsor should come from the correct level
within the organization and have sufficient influence to affect the
budget and other members of the executive leadership.’50 If the
sponsor does not have control over the systems and people impacted
by change, being at a wrong level or from some other part of the
organization, sponsorship is ineffective. Change management
also suffers if the sponsor leaves or is reassigned to some other
project or was invisible or indifferent or did not proceed to build
a dominant coalition of stakeholder senior managers. Sometimes,
sponsors themselves are not clear about their role and treat this as
just another responsibility.
 C hapter
18
Unleashing the Power
of Infantry

There is an anecdote in Ramayana. At one stage in the Rama–

Ravana war, Lakshman was hit with a powerful missile and
was prognosed to be alive only until the next morning, unless
he was administered a herb, Sanjivani, available deep inside the
Himalayas. So there was only one night in between, and there
being no other possibility, Ram and all the generals and soldiers
of his army waited for the inevitable with a heavy heart. Suddenly,
Jambwant challenged Hanuman, why was he crying, as he alone
was capable of flying thousands of yojanas (a unit of distance)
in the night and coming back before morning with Sanjivani.
Unsure of himself, Hanuman slowly gained confidence at the
exhortation of Jambwant, and did the seemingly impossible. This
was empowerment.

Empowering Employees
Empowerment is not about giving people new authority, new
powers and new responsibilities. It is about letting the people feel
that they have the power to effect change, to realize their personal
and collective dreams and goals. Empowerment is also the process
of removing key hindrances that stop people from acting on the
148  Alchemy of Change

vision, and enables them to think, behave and take decisions and
action in an independent and autonomous way.
In short, empowerment is making people feel that YOU/WE
CAN DO IT and WE ARE WITH YOU IN THIS. Conger and
Kanungo51 define empowerment as:

A process of enhancing feelings of self-efficacy among

organizational members through the identification of conditions
that foster powerlessness, and through their removal by both
formal organizational practices and informal techniques, of
providing efficacy information. This makes employees much
more productive, have higher job satisfaction and feel more
committed towards the organizational goal.

‘You cannot confer power on human beings. Try liberating them

instead’, says Oren Harari in World Executive Digest of August 1994.
He further says that as an effective leader, your job is to create an
environment where your people take on the responsibility to work
productively in self-managed, self-starting teams that identify and
solve complex problems on their own. If you concentrate on doing
this, you will find that your people will need you only for periodic
guidance and inspiration, which frees you to spend your time
confronting the big picture, common-fate sorts of strategic and
organizational issues. Concentrate on offering your people the gift
of liberation from the shackles of the organizational bureaucracy
and from your own ‘helpful’ instructions. Liberate them from the
protectors of the old guard. Do that and those delicious feelings
of power will emerge among your people, as will productivity and
organizational success.
Autonomy at work cannot be seen in isolation. It should have
strong linkages with the management systems and the work culture
of the organization. For empowerment to be experienced as ‘real’,
it is essential for the organization to have:

• An appropriate organizational structure allocating responsibilities

and accountability at all levels
 Unleashing the Power of Infantry  149

• Decentralization of power and authority

• Consultative decision-making
• Mutual trust
• Flexibility in operations
• Transparent communications and learning through experi-
mentation

Empowerment is about building accountability and ownership by

providing an environment that is free of constraints. Employees
will demonstrate wholehearted commitment in achieving organi­
zational goals once their feeling of powerlessness is removed and
they are given access to every kind of resource. Empowered
and well-informed employees are able to take initiative without the
need to appease authority. It is almost like a self-discovery where
every individual finds he is capable of holding ownership, without
depending on external sanction.
The obstacles and constraints that need to be addressed in order
to provide a hurdle-free environment for employees could be system
related, like the absence of an evaluation and reward system or
absence of economic rewards associated with transformation. There
could also be barriers in the mind where employees are aware of the
vision but do not act as they lack conviction about the change taking
place. Information blockades could also hold back the process,
since information is a source of power and lack of it can give a
semblance of dis-empowerment. It is important to develop a system
of information sharing in the organization. Very often, the leader
himself is an obstacle—either an immediate superior or someone
higher in authority. Such impediments to the process of change
should not be overlooked and cleared in the best possible manner.
Besides these, unclear goals and objectives and ambiguity in roles
and responsibilities can become a huge barrier too. It is imperative
to fine-tune and clearly define every role and every goal at all levels.
Change programmes need to involve not only the leaders as
sponsors of change but also the employees who will be affected by
the changes to the work environment. The organization has the
responsibility to create a work environment that helps foster the
150  Alchemy of Change

ability and desire of employees to act in empowered ways, to an

extent that they feel inspired to partner the change process and
make it a success.

A key role of the change facilitator at Mega Corporation was

to convince people that not only this change was possible but
we can do it despite all odds. This unleashed new energy,
especially amongst line managers and front-line HR managers.

Many companies worldwide are turning to what is called

‘shadow boards’ to solve the twin problem of employee disengage­
ment, especially amongst the younger employees and weak
response to changed market conditions. For example, Gucci started
a shadow board comprising millennials in 2015. This shadow
board has given insights and helped deploy its internet and digital
strategies leading to 136 per cent growth in Gucci sales from
financial years 2014 to 2018.52

A Dolphin, Not a Whale53

Torben Rick, propagating the dolphin versus whale concept,
says that organizational change should be divided into a series of
short steps or phases, something similar to how dolphins breathe.
Belonging to the same family, a whale breathes after long intervals
(see Figure 18.1).
We need to be cognizant of the fact that real transformation
takes time. Most people will not go on the long march unless they
see compelling evidence within a few months that the journey is
producing expected results.

Creating Small Wins

Achieving a long-term goal or a major breakthrough is relatively
arduous. Even small wins or incremental progress can boost work
life tremendously, increase people’s engagement with their work, and
can have a major impact on people’s sense of well-being.
 Unleashing the Power of Infantry  151

Figure 18.1. Change Management Is a Dolphin, Not a Whale

Source: https://www.torbenrick.eu/blog/change-management/change-management-
is-a-dolphin-not-a-whale/

Providing clarity and clearing the uncertainty about the

management’s role with regard to taking tough stands also inculcated
tremendous confidence amongst line managers who were earlier
highly demoralized. As the line managers witnessed the clear signals
and firm stances taken by the management, they gradually became
more involved. The small wins help build necessary momentum and
provide evidence that sacrifices are worth it.

In Mega Corporation, the tasks and processes were clearly

laid out for the core working team. There was a high sense of
ownership and commitment along with complete faith in joint
efforts. The unified and well-coordinated actions of the core
group helped the firm successfully handle two major agitations,
demonstrating its commitment to change and thereby sending
the right signals. In the past, all business heads were managing
their departments independently. There was singular and
short-term vision to achieve results without any coordination.
This had resulted in serious disparities in policies and practices
and the union was taking advantage of this situation. The
unified actions of the management during agitations clearly
conveyed its commitment to change, thereby improving the
level of commitment for change, especially amongst managers.
152  Alchemy of Change

Creating short-term wins is an important step for a successful

change process. Even in our personal lives, we need small wins to
maintain emotional well-being. Research indicates that a notable
proportion of incidents that had a minor impact on the project
had a major impact on people’s feelings about it. Similarly, these
wins are critical in the change process as they provide credibility,
promote faith in the change effort, emotionally reward the hard
work, keep the critics at bay and provide impetus to the overall
effort.

Celebrating success and small wins became a regular feature

at the beginning of all monthly communication and review
meetings chaired by CEO in AG Corporation. Top team and
managers felt that changes are quite visible in the attitude of
people and things were moving in the right direction. They
became optimistic about the future of the company and
motivated their departments with renewed zeal.

The change team should focus first on tasks where they can
quickly achieve unambiguous, visible and meaningful results.
This will keep the organization moving forward, reducing anxiety
that can get fixated on problems that are too large to handle
immediately. Many small wins are necessary to achieve our larger
goal of change. These wins reaffirm the faith of change leaders
about the validity of their vision and strategies, serve as a great
motivating factor to those actively involved in achieving the vision
and energize work life tremendously.
During the process of change, those sceptically sitting on the
fence start kindling faith in the efforts and begin to help once
they witness the success of small efforts. Level of resistance comes
down and momentum builds after the first wins, as changes get
consolidated one after the other. Even ordinary, incremental
progress can increase people’s engagement and their happiness
during the work.
After first few short-term wins, change efforts get a definite
direction as well. We should build on this energy to make the vision
 Unleashing the Power of Infantry  153

a reality by keeping the sense of urgency heightened and rewarding/

recognizing the staff that have made a difference. Remember, these
wins should not get to our head and the temptation of declaring
victory prematurely has to be controlled.
Short-term wins nourish faith in the change efforts, emotionally
reward the hard work, bring impetus and help us appreciate the
many milestones that exist on the path to making sustainable
change. These wins provide both, positive feedback to change
leaders and concrete data about the validity of their vision and
strategies. They also help retain the essential support of bosses,
justifying the much-needed reinforcement, and keep us fresh and
motivated for the next challenging situation ahead leading up to
the long-term goal.
It is critical for teams and individuals working on complex
change process to achieve small wins regularly. Setbacks are
quite common in handling complex problems, and people can
get disheartened with setbacks unless they touch and feel some
meaningful progress, even if that progress is a small one. This
brings about a feeling of accomplishment and a sense of optimism,
nudging them towards behavioural changes. Those who have
worked hard to create the wins are re-energized as well. Those
who have been pessimistically or sceptically sitting on the sidelines
begin to help. Quick performance improvements undermine the
efforts of cynics, they make less disruptive noise and the vision
begins to seem real.
 Part V
Leadership: The X Factor
of Successful Change
Facilitation
 C hapter
19
Leadership and the Need
for a Change Leader

Effective and meaningful change will have to be led by a group

of people but not necessarily by the vision of a single leader. Udai
Pareek54 remarks on this present-day leadership trend; ‘we are now
in a century of great leadership. By contrast, the 20th century was
a century of great leaders. We will need effective leaders in large
numbers at all levels in all organizations, rather than only a few
great leaders.’
We hardly find a real agreement on the definition of leadership.
It is basically exercising influence through a pattern of behaviour
that arouses involvement and commitment in people around. In
most successful cases where the level of involvement is high, people
know what they are doing and why. Leadership is, thus, a process
of locating and nurturing infinite possibilities in human beings and
affecting and remoulding people’s behaviour. Leadership is also
interlaced with the essential function of inculcating and shaping a
refreshed work culture.
John Maxwell says:

Leadership is influence—nothing more, nothing less. The

greater the impact you want to make, the greater your influence
needs to be. Managers can maintain direction, but they can’t
change it. To move people in a new direction, you need
158  Alchemy of Change

influence. If you can’t influence others, they won’t follow you.

And if they won’t follow, you are not a leader. The leadership
is, thus, about influencing people to follow.55

According to Lao-Tzu, China’s most influential political ruler in

the 5th century bc, the best form of leadership is to be conscious
of the leadership potential within the followers and to let them
unleash this potential in a spontaneous way. He says that the
highest level of ruler is the one who leads without words, allowing
the people to follow their own natures and live their own lives.
Azim Premji, one of the most successful business leaders, has
given 10 steps to leadership. These are as follows:

• First, leaders must develop powerful personal credibility. This

means they should not only be consistent in what they say and
do but must deliver on their commitments. The leader has to
generate collective enthusiasm in the team, and the team must
have faith in the leader before they commit to his dream. Personal
credibility is the most important ingredient of leadership.
• Second, great leaders tell people clearly what they expect from
them, whether in terms of performance or values. The more
that is expected from people, the more they tend to deliver.
Low expectations can lead to low ambition and hence low
performance. Winning leaders are demanding leaders. They
demand discipline, accountability and continuous increase in
performance and productivity.
• Third, great leaders are great teachers and coaches. Expectations
alone are not enough. Neither are rewards and punishments.
People need guidance on the path they need to follow. This does
not mean that the leader should spoon-feed his people. It only
means that the leader must have the capacity to look ahead and
give the right amount of guidance at the right time, and thus be
available for his people.
• Fourth, successful leaders need to have energy and be able to
energize others. Leadership demands extraordinary physical,
mental and spiritual energy to remain on top of the demands
made on them. Leaders must work both hard and smart, long
and intensely.
 Leadership and the Need for a Change Leader  159

• Fifth, leaders do not always have to be in the limelight. One has

to realize that leadership is not a privilege but a responsibility.
Think of birds flying in a formation. At different times, different
birds lead the formation. The leader must know where to lead
and where to step back.
• Sixth, winning leaders face reality. They do not dither.
Leadership is about making tough ‘yes–no’ decisions. Winning
leaders are willing to decide with imperfect data, if needed,
because leadership is about making judgements that others are
either unwilling or unable to make.
• Seventh, leaders keep renewing themselves. They constantly
learn from their own experiences and those of others. They
create knowledge, capturing and sharing processes and methods
in the organization.
• Eighth, leaders surround themselves with people who err on the
side of optimism. If people are always in the company of cynics,
they will soon find themselves becoming like them. A cynic
knows all the reasons why something cannot be done. Instead,
leaders spend time with people who have a ‘can do’ approach.
They choose their advisers and mentors correctly.
• Ninth, leaders play to win. Playing to win is not the same as
cutting corners. When you play to win, you stretch yourself to
your maximum and use all your potential. It also helps you
to concentrate your energy on what you can influence instead of
getting bogged down with the worry of what you cannot change.
Leaders do their best and leave the rest.
• Tenth, leaders respect themselves. Without self-confidence, it
is impossible to lead. This is needed even more in conditions
of uncertainty and change. In Wipro, one of the leadership
qualities on which we measure our leaders year after year is
self-confidence.

Swami Vivekananda says:

The best leader is one who leads like the baby. The baby,
though apparently depending on everyone, is the king
of the household…. It is absolutely necessary to the work that
I should have the enthusiastic love of as many as possible,
160  Alchemy of Change

while I myself remain entirely impersonal. Otherwise jealousy

and quarrels would break up everything. A leader must be
impartial.’15

Another interesting perspective is given by Vallabh Bhai Patel: ‘If

it becomes necessary for us to sit in seats of authority, let our hands
be clean, our tongue mild, our hearts sound and our vision clear.’

Change Leader
Leaders today have to deal with more uncertainty and ambiguity
than ever before, and therefore, must create an organization where
all levels of hierarchy adopt a common vision and contribute in
achieving it. Leaders should make sure that people not only see
the vision, they live and breathe it. They need to influence and
persuade people to reflect on and change their mental models.
Change leaders do not bring change; they facilitate its emergence
and mobilize support to the idea of change. They need to have the
skills for influencing others.
Morris and Raben, while referring to role of leader in change,
feel that:

There are number of specific things that leaders can do. First,
they can serve as models. Through their behavior, they can
provide a vision of the future state and a source of identification
for different groups within the organization. Second, leaders
can serve an important role in articulating the vision of the
future state. Third, they can play a crucial role in rewarding
key individuals and specific types of behavior. Fourth, they
can provide support through political influence and needed
resources. Similarly, leaders can remove roadblocks and
maintain momentum through their public statements. Finally,
leaders can send important signals through the informal
organization.28

Effective change management requires credible and visible

leadership that helps people unlock their potential, change their
 Leadership and the Need for a Change Leader  161

behaviour and hold everyone accountable. When we talk of

behaviour, we are talking about values, attitudes and beliefs, which
form an important component of the organization culture. In view
of each individual’s own family, educational, experiential and
psychological background, it is the leader’s task to unify, motivate
and develop commitment amongst individuals towards the change
mission and be a real transformational leader. Organization-wide
change requires sustained efforts, and the role of leadership is to
ensure continued momentum in the change efforts.
Nadler56 defines the key challenges of leadership as follows:

1. Strategic anticipation. Correctly anticipating at least strategic

direction the world, the environment and the industry will take
is sine qua non for visioning the future of the organization.
2. Sense of Urgency. Some urgency is needed to stimulate
behaviour.
3. Effective creation and management of pain. Pain, however, can
motivate both functional and dysfunctional behaviour. Again,
only the leadership has the capacity both to create pain and
shape the responses to it.
4. Making people believe that reorientation is truly critical to the
core issues of the organization.

True leaders have a compelling vision of a new future and get

followers committed to it by shaping their values, interpreting
the organizational purpose and by empowering them. They get
things done through commitment, by keeping the fire burning
within people. When Reliance Patalganga refinery was completely
submerged in the flash floods of 1989, DuPont managers declared
that it was virtually impossible to get the project back on track in
less than four months. But the company’s chairperson, Dhirubhai
Ambani knew something more—that nothing was impossible if
his employees were motivated. As the foreign consultants looked
on, every single employee worked round the clock, sweeping the
floor, dismantling the machines and cleaning them, restoring
the refinery back to shape in less than three weeks. Being associated
with the company during the period, Dr Arora was a witness to
the commitment of the great leader and how he motivated people
162  Alchemy of Change

to complete the job in record time, to the astonishment of advisers

from DuPont. Change leaders create hope, excitement and
engagement, inspiring people to make things happen.
These change leaders encourage risk-taking and have a relatively
high tolerance for mistakes made by followers. In situations of
complex change, it is vital that leaders trust others to bring their
own perspectives to the table. Trusting others means allowing
them to perform their task without micromanaging them. Leaders
encourage and seek out innovative solutions and approach old
situations with new perspectives.
Jon R. Katzenbach57 has given common characteristics of
change leaders:

1. Commitment to a better way: Real change leaders see their target as

exciting, worthwhile, and essential to their personal satisfaction,
as well as to the prosperity of the institution.
2. Courage to challenge existing power bases and norms: Real change
leaders do not welcome failure, neither do they fear it. By
demonstrating the ability to rise again, they also build courage
in those around them.
3. Initiative to break through established boundaries: Real change leaders
take it upon themselves to work with others to solve unexpected
problems, break bottlenecks, challenge the status quo and think
outside the box. Setbacks never discourage them from trying
again and again.
4. Motivation of themselves and others: Highly motivated themselves,
real change leaders create energy, excitement and momentum
in the people around them.
5. Provide opportunities for others to follow their example and
take personal responsibility for change. More often than not,
they use facts about customers and competitors to motivate their
people to win in the marketplace.
6. Caring about how people are treated: Real change leaders are fair
minded and intent on enabling others to succeed. They never
deliberately manipulate or exploit people. They are determined
to help each person achieve their full performance potential.
 Leadership and the Need for a Change Leader  163

7. A sense of humour: Far from trivial, a sense of humour often gets

real change leaders through when those around them have lost
heart. It enables them to help others stay the course in the face
of confusion, discouragement and the occasional inevitable
failure.

Looking Within: Change Mindset

We have so far discussed leader behaviours which help top leaders
be more effective in their role as change leaders. Perhaps, deeper
than that is the change and growth mindset. This cannot be
developed in a day.

How does one develop this?

First and foremost, there has to be an instinctive habit of
getting out of one’s comfort zone. Kouzes and Posner talk
about ‘Challenging the Status Quo’ as the first out of five
practices that define leadership.58
Second, continuous reading habit, particularly life
experiences of those who broke mental barriers, such as Steve
Jobs, Jack Welch, Anthony Robbins, Stephen Covey and so
on, helps. At the same time, one has to protect oneself from
naysayers, lest old dictum of garbage in, garbage out plays out.
Third, essentially believe that hard work, grit and discipline
bring more achievements than talent and intelligence.
Fourth, be humble to acknowledge their own as well as
others’ strengths and contributions.

Mark Sanborn says that change management is the single

most important skills of the new millennium.59 He further asks if
the leader is ‘change-skilled’. A leader needs to answer the three
questions himself:
‘Today your playing field can shift from day-to-day. Can you?
164  Alchemy of Change

Today, your job description could change overnight. Can you?

Today, your employer and manager can change any time?
Can you?’
A leader’s mindset has to change before he becomes eligible
for being an effective change leader. Then alone, he will better
appreciate the moment of inertia of a human mind and design
humanistic change plan that minimizes resistance.
Lichenstein60 says that a top leader also needs to ponder over
these questions before embarking upon a major change:

1. What are the values and motivations of my board and how do

I find them?
2. How do I gain acceptance for policies at the right level?
3. What are the values and motivations of my main stakeholder
groups (e.g., staff, suppliers, communities, customers and market
analysts)?
4. How do I bring on board these other stakeholders even though
our values may be different?
5. How do I use this information to develop better policies and
strategies so that I am able to increase shareholder value?

If the values of the top team are at variance with the rest of
the organization, even if at unconscious level, it will give rise to the
following kinds of responses:

1. ‘Management has lost the plot.’

2. ‘They are killing the soul of the organization. We did not join
this organization to see this day!’
3. ‘Why are they in so much hurry?’

As a result, there may be passive and active resistance; even

sabotage will not be unlikely, derailing the entire change effort.
Therefore, it is the top leader’s/team’s responsibility to first focus
on value alignment at least with the key influencers in the affected
population, besides with key stakeholders. At this point, it may
be pertinent to reiterate that the effort should be to develop a
consensus instead of a majority vote.
 C hapter
20
Value-based Leadership and
Successful Change

The emphasis of traditional leaders is on systems, practices,

organization and keeping things under control. Their focus is on
control to ensure efficiency, productivity, performance and profits.
Traditional leaders seldom make good change leaders because of
this restricted and limiting mindset. Value-based leadership looks
inward for strength, purpose and values. This enables them to
lead others reach their full potential, thereby making a difference
in qualitative besides quantitative performance. Value-based
leadership promotes personal and organizational vision, enabling
people to make complex decisions required in today’s environment.
There are two stories of Mr G. D. Birla, an Indian entrepreneur
of a bygone era. He once declined a proposal to manufacture lac
because he was told that the process involved killing of insects.
On another occasion, he was approached by Mr M. M. Malviya
for donation to his dream project of setting up Banaras Hindu
University. While waiting in the anteroom of Mr Birla’s chamber
at his residence, Mr Malviya heard Mr Birla shouting at his son for
spoiling many matchsticks in lighting a candle. Gravely disappointed
at Mr Birla’s stingy behaviour, Mr Malviya tried to make a quiet
exit without asking for donation. Meanwhile, Mr Birla called for
Mr Malviya. Mr Malviya came back and after great hesitation,
told Mr Birla the purpose of his visit. Mr Birla happily gave him a
166  Alchemy of Change

cheque for a handsome amount and asked him more about plans
of the university. By now, Mr Malviya had become comfortable
and with Mr Birla’s permission, he told him about his getting
disappointed by conversation between Mr Birla and his son.
Mr Birla had a good laugh and said that just because he had a lot
of money, he could not allow waste by his son even in a small thing.
The success of the leader depends on backing up his words with
actions as this creates trust. The only way for a leader to create trust
is by laying out values and then walking the talk. It is authenticity
and the character that builds trust and makes value-based
leadership possible. Since character is a combination of integrity,
selflessness, understanding, conviction, courage, loyalty and respect,
the sum total of our values and beliefs, it invariably gets reflected
in our behaviour and actions. It is a pattern of behaviour, thoughts
and feelings based on universal principles of moral strength, and
integrity—plus the courage to live by these principles each day.
This high character is what makes people believe in you and look
up to you as a leader.
Warren Wilhelm (1996) stresses the importance of values as
guiding principle of leadership thus:

As the pace of change in our world continues to accelerate,

strong basic values become increasingly necessary to guide
leadership behavior. Such values act as social constructs.
They allow leaders to make decisions about the direction in
which to lead and how to proceed. Without values, otherwise
effective leadership can be grossly destructive socially, as proved
by dictators such as Hitler and Saddam Hussein. It is the
interactive combination of intelligence and sound social values
that allows leaders to nudge forward the positive progress of
humankind.61

David Hurst (1995) says that ‘Organizational change requires not

means-end rationality but value-based rationality. In value-based
rationality, action is taken not because it is a means to achieve
certain technical goals but because the action is seen as intrinsically
valuable.’62
 Value-based Leadership and Successful Change  167

Noel M. Tichy,63 a distinguished professor and consultant, while

emphasizing the importance of values, has observed that winning
leaders deliberately and consciously do five things:

• They clearly articulate a set of values for the entire organization

or team.
• They continually reflect on the values to make sure that they
are appropriate to achieving the desired goals.
• They embody the values with their own behaviour.
• They encourage others to apply the values in their own decisions
and actions.
• They aggressively confront and deal with pockets of ignorance
and resistance.

Danah Zohar feels that with value-driven leadership ‘business

becomes a spiritual vocation in the largest sense of the word, and
its leaders serve the wonderful what can be of reality.’64
Chanakya has also mentioned, in his Arthshastra, that the
root of holding a kingdom (organization) lies in the self-controlled
life of the ruler (leader). If the ruler follows the dictates of his duty
(dharma), the ruled also do the same. If the ruler be un-pious, the
ruled are also un-pious. The ruled are simple if the ruler be simple.
The ruled follow the ruler.
An excellent exposition of human values is found in the long
counselling session, which Bhishma had with Yudhishthira, as given
in ‘Shantiparva’, about the conduct of the king (leader):

• The king’s behaviour has to be supported by self-restraint, with

passions under control.
• The king, remaining cheerful by meditation and by restraining
desire and other passions of the heart, succeeds in obtaining
great merits.
• The king has his soul under restraint, is possessed of wisdom,
and is desirous of prosperity.
• The king should always reflect upon himself: What does he lack?
What evil habits he is addicted with? What are the sources of
his weakness? What are the sources of his faults?
168  Alchemy of Change

• The king—who is free from malice, who has his senses under
control and who is gifted with intelligence—thrives in affluence
like the ocean swelling with the waters discharged into it by a
hundred streams.

Our Indian philosophy of work is that we work not simply to satisfy

our physical, mental and psychological needs, but it is an activity
directed for the realization of the divine within us, the internal
moral consciousness, which helps us behave more honestly and
spontaneously, for the good of all. It is an offering to the divine in
us to unfold itself. Sri Krishna, in verses 45 and 46 of chapter XVIII
of The Gita, has said that devoted to his own duty and worshipping
Him, from whom is the evolution of all beings, with one’s own duty,
man attains perfection.

During the final stages of negotiations at Mega Corporation,

serious differences arose on certain points in the draft
settlement and both the parties held their ground. Finding
no way out to resolve the stalemate, the union agreed to refer
these points of differences to an arbitrator, whose decision
shall be final and binding. The union opted for the change
facilitator (heading management’s negotiation team) as
arbitrator. The arbitrator heard both the parties and gave his
award, which was accepted by all. This clearly proves that a
value-based leader, even though he represents the interests
of opposite party, could enjoy the trust and confidence of
people. The union agreed to accept the change facilitator as
an arbitrator because he was considered as trustworthy, fair
and compassionate in his individual capacity.

In business, if we dare to speak about values, we are considered

preachers and not businessmen who take decisions that make
sense from a financial point of view. What is most important is to
determine: Have we followed our inner conscience? Have we done
what was right? Have we given our best effort? Have we used all of
our senses and values that we are conscious and aware of? If we are
 Value-based Leadership and Successful Change  169

leading a purpose and we are doing it based on some fundamental

values, then we have great potential and we can be successful in
almost anything.
Zubin Mulla has written many articles on importance of values.
In one of his articles in Aon Hewitt’s publication, he says that:

The most compelling evidence of the importance of values comes

from a recent study of 45 Chinese Chief Executive Officers
(CEOs) and their direct and indirect subordinates (Fu, Tsui,
Jun, & Lan, 2011). The study showed that the CEO’s values
substantially enhanced the impact of the CEO’s behaviours
on middle manager’s attitudes and behaviour intentions.
More specifically, only when CEOs gave more importance to
others’ happiness as compared to their own happiness, did the
CEO’s leadership-oriented behaviours have substantial positive
effects on middle managers’ affective commitment towards the
organization and the middle managers’ intention to leave the
organization.65

There are differences in opinion, however. Burns suggests when

history evaluates the legacy of a leader, what matters most is not
whether they were personally virtuous or ethical in their interactions
with others, but whether they had the right intentions and whether
they led their followers to a better state or not.66
It is not just the values of the CEO that can have a major
influence. In one of the organizations perpetually afflicted with
industrial relations (IRs) conflict, a new HR head joined. Before
him, general IR approach was largely political and people believed
that successful IR management means managing power equations
between various employee groups, playing one against the other
through selective allocation of benefits, hiding data about the health
of the organization lest employees/unions may jack up their price
for industrial peace, being hand in glove with labour authorities
and so on. Incidentally, these beliefs are widespread, especially in
manufacturing and other organizations with a large workforce. New
HR head was intrinsically opposed to this approach. So, while he
played along the then rules of the game, slowly he started being
170  Alchemy of Change

upfront about what was practical and what was not. Naturally,
this not only led to consternation amongst other personnel tasked
with handling IR and top management, but unions were also
flummoxed and smelt a conspiracy to break the power of unions
because reverberations of plain speaking also started reaching rank-
and-file workers. This was especially so because many of the just
expectations of workers were met even before the unions raised a
demand. Over the years, conflict and animosity was replaced by
harmony and trust and even annual collective bargaining rituals
became a tame affair lasting a few hours instead of days earlier. In
time, finding himself with no significant work to do on IR front,
HR head started devoting himself to employee training, marking
a shift in his own career.
 Part VI
Culture and Values as
Vehicles of Change
 C hapter
21
Influence of Culture and
Indian Culture

Culture is the totality of dominant beliefs, guiding norms, under­

standings, values and ways of thinking that is shared by members
of an organization. This is also exhibited via patterned regularity
in people’s behaviour, manifested in customs and traditions. It
represents an environment jointly created by people, leading
them to action and coordinated effort, and truly engaging people,
without any precise sanction. An essence of the distilled wisdom of
generations belonging to a society or organization, culture sets the
standards and boundaries of behaviour within and beyond.
Rajagopalachari describes culture as a subtle instrument of
civilization, which acts through family training, tradition, religious
belief, literature and education. It acts silently. It makes people feel
they are not forced to obey but do it of their own free will and gives
them a sense of pride in good behaviour.67
In any company, people develop particular ways of handling
work; gradually this becomes the accepted way of doing things.
These ways of doing things become habits, and that is what
corporate culture is: the habits that have become part of the
organization’s personality, or ‘how things are done around here’,
what will be rewarded, what punished and what ignored.
Geert Hofstede has been one of the foremost researchers in
this field. He views organizational culture as a collective mental
174  Alchemy of Change

programming and considers that values are its fundamental core.

Values are broader, trans-institutional principles that apply to a
range of situations. They include the general ideals and standards
of the organization.68
Unless any major change effort aims at successfully aligning or
modifying organization culture to new imperatives, it stands the
risk of failure.
A 2013–2014 Change and Communication ROI Study of
Towers Watson and Willis across the world found that funda­
mentals of change levers (leadership, communication, involvement,
training/learning and measurement—that are known to drive
success) are more effective when grounded in a deep understanding
of an organization’s culture and workforce. The same study also
found that doing the following improves change effectiveness:

• Paying careful attention to employees—evaluating the culture,

employee readiness for change and, in particular, the impact
of changes on people.
• Training managers to be catalysts for change and holding them
accountable.

Global 2015 study of Prosci on Best Practices in Change

Management found that:

9 out of 10 respondents rated cultural awareness as either

important or very important to change management success.
They felt that change management has to be customized for the
culture in which it has to be implemented. An understanding
of cultural norms allows change managers to integrate change
activities more fully thereby increasing credibility. Culture-
specific norms and taboos can act as landmines to change itself.
Lastly, critical communication improves through culturally-
aware translators.

For example, the study found that open forum engagement was
not effective in Asian context, because of the inherent employees’
hesitation in openly voicing dissent.
 Influence of Culture and Indian Culture  175

Any organization operates in a certain sociocultural milieu

and cannot be indifferent to the values of the society in which
it operates. The greater the degree of divergence between an
organization’s culture and the culture of the society in which it
operates, the greater the amount of energy that is dissipated in
unproductive ways. Even if these differences are not so apparent
in day-to-day running of the organizations, these fault lines
reappear in the event of any major change, seriously undermining
efforts for smooth transition.
In today’s world, there are quite a large number of multinational
organizations from across the world. These organizations, rooted
in their local cultures of the USA, Germany, Korea, Japan, China
and so on, often get dismayed by some of the values and practices
of Indian managers and employees. Likewise, Indian MNCs
operating in other countries often find local cultures to be at
variance with their mental models and behaviour patterns, leading
to unproductive misunderstandings.
Western research is rooted in what it can be loosely called as
Western world view. For example, Research Psychologist Lewis
Andrews, after 10 years of investigating the connection between
spirituality and mental health, says that study shows that people
who believe in one God and have very strong spiritual values are
happier, healthier and in most cases more intellectually involved
than people who do not.69 One does not know what are its
implications in the Indian context.

Indian Mindset and Culture

Most of the management models are rooted in Western theories
and cultural constructs, which may not be consonant with
Indian mental models. One of the most visible effects of this
incongruence is found in appraisal and reward systems. A 2014
article titled Kill Your Performance Ratings based on a survey
by PricewaterhouseCoopers found that 95 per cent of managers
were dissatisfied with their performance management systems.
Incongruence between policy and practice exacerbated by typical
176  Alchemy of Change

Indian cultural norm is not bringing up any negative or unpleasant

issues in face-to-face interactions with those who work with you,
unless you are angry. The same ambivalence has got translated into
routine communication about any disciplinary action anywhere
in India: ‘though your misconduct deserves strict disciplinary
action, management is taking a lenient view and you are being let
off with (a lighter punishment).’ The unwritten value is personal/
human relations must extenuate enforcement of discipline. Even
the societal value is, ‘who are we to punish? God will take care’.
This ultimately leads to Indian state being perceived as a soft state.
Alan Roland compares the American and Indian societies thus70:

Feature American Society Indian Society

Important structures Peer groups, extra Extended family
familial relationships
Relationships Cousin, brother in law— Specific words for
generic names each relationship
Occupational and Individual decides Family has a role
major life decisions
Orientation Change Stability

Therefore, we must understand Indian culture and psyche to

devise more effective Indian models of leadership and change
management.

Spiritualism Is Not Religion

People often confound spirituality with religion. Away from the
religious practice, spiritualism is a belief that one’s existence is
inextricably linked with other beings and even ‘non-beings’ like
nature.
One of the main constructs of Indic philosophy is Om
Ishaavaasyamidam yatkincha jagatyaam jagat (Ishopnishad ) meaning,
‘God pervades everything—living and non-living.’
These non-living include vegetation, rivers, mountains, stones
and so on, even universe. Associated with this basic perspective,
 Influence of Culture and Indian Culture  177

the work ethos in India is based on a holistic vision of life. The end
of all work is to bring out the divine in ourselves by serving the
divine in others. A person has to work to realize the divine within
him; therefore, work is considered as duty (sadhana) in Indian
philosophy. It is the performance of action for the unfoldment of
the spirit towards greater perfection and working for the good
of others, good of all being. Somewhere this also connects and builds
towards the guiding philosophy of ‘Vasudhaiva Kutumbakam’, of
treating the whole world as one family.
Those with spiritual view to life do not measure success or
failure. They follow their inner conscience, do what they consider
right, and give their best effort, using all their values and good sense
that they are in acceptance of. Spirituality is also paying attention
to the inner self, to be able to perfect one’s behaviour and attitudes,
both inwardly and externally with others, basing one’s conduct on
fundamental values, such as love, truth, peace and equanimity.
At work, if we have a spiritual outlook, we have a wider outlook;
we are more patient and we have greater respect for and better
understanding of the people we work with. If we have a righteous
policy based on care for people, and a compelling business strategy,
then financial success will come automatically.

Influence of the Construct of the Joint

Family
Indian culture is predominantly spiritual, with a cosmic vision,
leading towards high spiritual truth inside every human being. It
does not mean that all the people of India are spiritual. The streets
are teaming with shallow and unspiritual lots. But society extends
its respects to the spiritually alive people.
Suresh Krishna (1988), Chairperson and Managing Director,
Sundaram Fasteners Ltd, says:

In the West, people respect people who achieve, who acquire

things, who become richer, who are more successful. In India,
people respect those who renounce, who give up things, who
178  Alchemy of Change

are like Swami Vivekananda. These are the people who are
respected, not the people who acquire things in life.71

Sundaram Fasteners Ltd is one of the most successful companies of

the country, with a record of not a single industrial dispute or loss
of a single working hour during 30-odd years of its history. Suresh
Krishna says that this could be made possible by practising what is
very fundamental to Indian ethos: the joint family system.
The institution of joint family has survived centuries and is still
a social force influencing the way of life and attitudes of a large
majority of Indian people. The binding principles of the joint
family have been so strong that numerous foreign influences over
the centuries have been unable to dilute its basic structure. The
eldest is the head of the joint family and has a stature to reckon
with. He/she is the ‘kartā’. The welfare of the family is his/her sole
concern. He/she is demanding yet affectionate, listens to everyone
in the family with equanimity, involves others in decision-making,
takes care of their interests, and is always approachable. The kartā’s
nurturance is reciprocated with respect and reposing of confidence
in him/her by the members of the family. What we see around in
our societal day-to-day behaviour that we stand up when a senior
enters the office, refrain from smoking or drinking alcohol in the
presence of an elder or senior, speak humbly and politely to all
elders, is all because we have grown up in a system where the head
of family and all elders are respected.
While describing primary characteristics of and basic learnings
from the joint family, P. Singh and Asha Bhandarkar have
mentioned that the individual in the joint family is exposed to warm
and close personal relationships, where emotional links with others
become the core characteristics of Indian personality profile and the
kartā by his/her behaviour and style evokes feelings of security and
trust. They have, thus, argued for evolving culturally consistent
and relevant management system based on kartā model.72
A joint family consists of large number of members and its
organization and structure is based on cooperation. It fosters great
virtues such as sacrifice, affection, cooperation, spirit of selflessness,
broadmindedness and self-control.
 Influence of Culture and Indian Culture  179

The notion that the kartā or the head of the family is omnipotent
and over-dominating and puts at risk the individuality of other
members in the family does not seem to be correct. Since all the
members of the family are bound by the obligations imposed by
the sacred laws and customs, every individual enjoys lot of personal
freedom, operating within the set of rules.
Indian environment is characterized by a strong sense of value
attached to tradition and traditional practices. Indian workers, who
are by and large rural, bring to their organizations the cultural
norms and values in their most raw form. Hence, there has been
a greater penetration of social habits and cultural values into the
work environment of organizations. Coming from an environment
of strong family ties, the basic learnings, habits and attitudes of
the system are so deeply ingrained in the individual that he looks
for a work environment with which he can identify himself; an
environment where he finds a kartā-like figure to guide and mould
him. It is because of our cumulative experiences and need to hold
on to our heritage, that we seek out a symbolic parent figure in
the workplace through whom we feel empowered, protected and
in whom we can repose our confidence. When we feel this need
to relate with others, it releases positive energy like intimacy,
togetherness, mutual understanding and respect. Behaviour based
on these positive energies and relationship facilitates integration
between individual and organizational goals.
Other behavioural reflections and impact of values developed
in the joint family system, on the organizational process, are
fewer power games and groupism, smoother relationships,
higher empathy and camaraderie, acceptance of authority and
empowerment.
The kartā style is all encompassing, creating trust and shared
values. A true kartā is characterized by an empowering orientation.
Empowering and shaping the subordinates through positivity and
unconditional acceptance helps in building the subordinate a total
person, who thereby learns to take risk and make independent
decisions. The superior, in such an environment, shows tolerance
to the subordinate’s mistakes and converts them into learning
experiences. This style genuinely concerns itself emotionally and
180  Alchemy of Change

intellectually with the people and facilitates individual growth

through the process of support and advice.
It would therefore be a justified assumption that a management
style based on the values of joint family system, under a kartā style
leadership, makes for a great business perspective—an indigenous
answer to dozens of trial and error management styles that have
not been rooted in the Indian context!
Suresh Krishna, chairperson and managing director of
Sundaram Fasteners Ltd, who has been successfully practising the
paternalistic—kartā—style of management for over three decades,
has beautifully summed up:

Let us not look at what is going around the world, because

sometimes it works and sometimes it doesn’t. Let us look at
ourselves, our values, our ethos, our culture, our joint family
systems, what the worker wants; let us find an answer for that
and then I am sure, we will be able to mobilize our resources,
so that India becomes not only internally competitive but
internationally competitive.

Culture and ethos of country is very strongly embedded within any

human being who comes to the organization, especially the fact that
they come from a very engaged family atmosphere. Over the ages,
the family has proved to be the strongest institution and we must
try to make use of the strengths of the system and its philosophy.
Ancient wisdom is in perfect balance with the cosmic principles and can be
aligned to the corporate world.

Learnings from the Hofstede’s Cultural

Dimensions and Indian Culture73
Amongst the six dimensions, Indian culture scores highest (77)
on power distance. Obedience is the normal expectation, so is
employee expectation that they will be told what they are supposed
to do. Control is familiar, even a psychological security, and
attitude towards managers are formal even if one is on first name
 Influence of Culture and Indian Culture  181

basis. Communication is top-down and is essentially directive

(see Table 21.1).
The next highest score is on masculinity (56). However, display
of masculinity is tempered by societal premium on humility and
abstinence.
Uncertainty avoidance score is low (40). People are tolerant of
imperfection and the unexpected with the famous ‘chalta hai’ (it is
okay, even if not okay) attitude. People generally do not feel driven
and compelled to take action initiatives and comfortably settle
into established rolls and routines without questioning. Rules are
often in place just to be circumvented and one relies on innovative
methods to ‘bypass the system’. A word used often is ‘adjust’,
which means a wide range of things, from turning a blind eye to
rules being flouted to finding a unique and inventive solution to a
seemingly insurmountable problem. It is this attitude that is both
the cause of misery as well as the most empowering aspect of the
country. There is a saying that ‘nothing is impossible’ in India so
long as one knows how to ‘adjust’. This gives rise to entrepreneurial
instincts.
India’s lowest score is on indulgence (26), leading to a lot of
cynicism and pessimism. People feel restrained by social norms.
Amongst other markers, India’s intermediate score on individua­
lism shows that it is both a collectivistic and individualistic society.
Relationship is based on expectations—Loyalty by the employee
and almost familial protection by the employer. The Individualist
aspect of Indian society is seen as a result of its dominant religion/
philosophy—Hinduism. Dominance of karma and prarabdh means
that each one is responsible for the results one gets for their actions.
The above is not an exhaustive interpretation of Indian culture’s
standing on Hofstede dimensions. We also have to keep in mind
the changing values and norms with the advent of the millennial
generation, to build a culture that is not only attuned to the
changing milieu but capitalizes on core strengths of Indian ethos.
Table 21.1. Indian Culture Hofstede Scores and Implications for Change Management
Variable Score High/Med/Low Features Implications
Power distance 77 High Acceptance of authority, Greater acceptance of fiat
top-down directive
communication
Masculinity/feminism 56 High Ostentatious display Create and celebrate small
(tempered by value of wins in a modest way
abstinence and humility)
Uncertainty avoidance 40 Med–low Acceptance of imperfection, Regimentation may
rule indifference be counterproductive,
if hurried. Promote
entrepreneurism
Individualism/collectivism Medium Respect for group but Attend to group, as well as
individual accountability One-on-one communication
Indulgence 26 Low Cynicism and pessimism, Focus on culture, social
restrained by social norms norms
Long-term orientation 51 Medium Karmic philosophy, Focus on public good and
patience, low punctuality ethics
 C hapter
22
Values as General Ideals
and Standards

Try not to become a man of success but rather try to

become a man of value.
—Albert Einstein

Anything and everything we do, either consciously or unconsciously,

is based on our beliefs, attitudes and values. A value is a deeply held
belief upon which we act by preference. The idea of what the right thing
to do in a situation comes from our values. It may be termed as a
principle which determines our decision for the choice of our action.
It is our conception of what is good and desirable, our conviction
of what ought to be. Our attitude is an expression of our values.
Karp and Abramms give an interesting analogy:

Think of a value as a lighthouse. A lighthouse maintains a

central and clear position of visibility. It does not call all boats
into the harbor to anchor there; its function is to direct shipping
safely. In other words, a lighthouse’s primary function is to direct
shipping away from itself and toward the intended destinations.
The message is, ‘As you go where you are going, keep me in
view, or you risk becoming lost.’ Values define who you are.
Actions get you what you want. When things chronically go
wrong for a person at work or at home, it is frequently because
184  Alchemy of Change

of a fundamental inconsistency between that person’s value and

his actions. The person is behaving in a way that is inconsistent
with his own nature.74

High values lead to fair and objective decision and action by

leaders, ensuring the welfare of all concerned. Values keep a
leader on track. We can possess these higher values only through
realization that there is a higher dimension guiding and governing
the entire human existence.

Where Do Values Come from?

The values we live by are not external in nature. They are neither a
manifestation of some kind in our bodies nor something genetically
inherited. One might wonder, then, as to the source of these values,
which constantly guide us and make us who we are in every way.
Why is one individual affable and the other unfriendly? Why is one
person on a team so giving and the other extremely self-centred?
The judgement about any act being right or wrong is possible only
when we have the freedom to choose one or the other and it is here
that we need the science of values.
Human values come from our deeper state of being—the
consciousness. Our depth dimension is the centre of all values.
To most of us, the source of this depth dimension is the existence
of the divine force within us. To some, it derives from the ‘true
north’ principles derived from the universal laws of nature. To
some others, they are derived from civic consciousness and tenets
of peaceful coexistence and mutual growth.
Family and childhood experiences and ongoing occurrence of
various events also play an important role in shaping our values.
During childhood, our family members, peers, teachers and
religious affiliations help us discover our values. Our experiences
from school, family rituals, celebrations, styles of interaction—all
have an impact on our value formation. As we grow, we experience
new feelings, emotions and conflict within ourselves, which create
a major impact on our values. As a result of such self-discovery,
 Values as General Ideals and Standards  185

we see our earlier beliefs in a completely new light. Things

altogether change when we undergo this type of advanced learning
through internal self-discovery. As we learn more about ourselves,
we increase our own self-confidence and perception of self-worth.
The true strength of mankind springs from within. Irrespective
of religious and cultural diversities, there exists a remarkable
degree of agreement about values, such as humility, truthfulness,
forgiveness, selflessness, integrity and gratitude, the richest resources
of which are available in the scriptures of all religions of the world,
which have guided mankind through the ages.

Organizational Values
J. R. D. Tata once said, ‘If someone were to ask me, what holds
the Tata companies together, more than anything else, I would
say it is our shared ideals and values which we have inherited from
Jamshedji Tata.’75
Organizational values are shaped by the individual values of
leaders, and very often created by the values of the founding fathers.
If such values are used as the basic criteria for selecting successors,
the organization is bound to flourish.

The group chairperson of Mega Corporation once made

certain interesting observations about organizational values:

Values are different for different people, different for

different organizations. The collective practice of values is
expressed in terms of outcome. I am interested in outcome
and cannot trade in individual values and temperaments.
Goals are important and also how do we achieve the goals.
Tree cannot be separated from the wood and, therefore,
it is impossible to have a collective value system. Align
everyone to goals and never attempt to align values. Every
186  Alchemy of Change

individual is different in terms of values and instead of

aligning their values, align them to organizational goals
so that you could achieve them.

However, there was a consensus amongst the business

heads and change facilitator on the values of transparency,
empathy and so on as the cornerstone of change effort in
Mega Corporation. Events have later proved that these
contributed in the perception of moral force and mutual trust.
This was recognized by the union and the workers and made
them open to debate their otherwise entrenched positions.

A management that is satisfied with the routine functions and

achievement of physical targets cannot provide the required support
for the formation of organizational values. A shared ambition in
terms of goal or targets is not enough to create a sense of purpose.
It is not enough to define what the company aims to achieve. To
create purpose, it is important to shape and embed in the company
a set of shared values, which determine the rationale for which
an organization exists and provide a description of what kind of
company it wants to be.
It is equally, if not more important to know ‘who we are’ than
‘where we are going’. Goals will change as the world around us
changes but the core values give an identity to the company, endure
as a source of guidance and inspiration and hold the organization
together. To hold any organization together, there is a need for
an enduring and binding force, which would enable people to be
comfortable in taking decisions and forging ahead with planned
actions. The core values need to be integrated into every employee-
related process—hiring methods, performance management
system, promotions, rewards and exit policies. Organizational
decisions should be based on these core values alone and once
embedded into its systems, the values also need to be promoted at
every turn. Since they define meaning for the organization, they
should ideally become a constant backdrop against which changing
 Values as General Ideals and Standards  187

strategies and operating procedures are reliably enacted. It would

be justified to state that commitment to ideas, actions, decisions
and directions are intense in organizations where a value system
is in place.
People can be relied on to do the right things once they buy into
and internalize organizational values. As employees internalize them,
values can serve as a control system against violations as decisions are
taken supported by reference to these. They serve as a guide in cases
of controversy or disagreement. These organizational values when
discussed with suppliers, distributors and other business partners,
demonstrate as to what the company stands for, creating a high image
for the company. Statement about organizational values invokes a
higher purpose, a purpose beyond current challenges that indicates
service to society. This purpose can become a source of competitive
differentiation and enhanced brand reputation. These organizations
also have fewer problems attracting and retaining talent.
As per Collins and Porras, ‘Core values are the essential and
enduring tenets of an organization. A small set of timeless guiding
principles, core values require no external justification; they have
intrinsic value and importance to those inside the organization.’
They have also quoted Ralph S. Larsen, CEO of Johnson &
Johnson, who said that even though his core values may be his
competitive advantage, but he has them because it comes from
his inside.76
Azim Premji, chairperson of Wipro, one of the world’s most
successful companies, expresses his commitment to organizational
values:

To meet the challenges of the future we are prepared to

change everything about ourselves except our beliefs and
values, as they alone guide, govern and bind us together as
an organization. It is essential that we consciously internalize
our beliefs and be fanatical about consistently practicing them.
If we fail to honor our beliefs, we will lose credibility, not only
as individuals, but also as an organization. Our beliefs define
our basic philosophy of managing business and will remain the
spirit and essence of Wipro.77
188  Alchemy of Change

Other such successful and world-class organizations in the country

include Infosys, Tata Group and Sundaram Fasteners Ltd, which
have deep commitment to their organizational values, and all their
strategies are formulated and decisions are taken in the backdrop
of these values. These organizations have proved that it is possible
to run a business successfully without compromising on values and
beliefs. If the head of the organization can establish overarching
corporate values, he can get the whole organization working
effectively in the same broad direction.
Values initiative should not be treated as a onetime event
measured by the initial attention it receives, such as a marketing
launch. It is important for a value team to arrive at a statement
that works than to reach a decision it may later regret. Leaders and
executives should discuss values over a long period; they should
consider and reconsider how the standards will play out within
their corridors.

In AG Corporation, the vision, mission and values were

discussed and debated amongst team of senior executives and
later finalized for the company through a two-day workshop
attended by the top team and heads of departments. The
strategy to institutionalize them was also worked out. It was
decided that all executives would repeat them at every chance
they get and employees were reminded that organizational
values form the basis of every decision the company makes.
Frequent discussions about organizational values can be engaging and
empowering. The organization becomes a community united by shared
purpose.

Dr B. M. Munjal, chairperson, Hero MotoCorp, one of India’s

most successful companies, while talking about organizational
values, says:

I have always believed that business should be based on intrinsic

values which stand the test of the time. The values, which
 Values as General Ideals and Standards  189

hold true for life, should hold true for business as well. I have
always believed that ethics, along with integrity and character,
remain unchanged, in good times or bad times. In fact, I am
convinced that the global economic crisis had something to do
with violating value-based principles. We call these principles,
Dharma.
  I am fortunate that my elders imbibed very strong ethical
values in me and the lessons that I learnt from them have been
my guiding light all these years. These are the teachings of our
Vedas, which have been passed on through the ages, and which
I believe should form the basis of leadership even today. These
include: coping with success and failures with focus on karma;
focusing more on the deed and less on the outcome; never
forgetting the merits of humility and hard work; doing right
things as opposed to doing things right; respecting individuals;
and finally, enjoying the journey and not worrying about the
destination.78

Organizational values are perhaps more important today than at

any other time in history because of the fast-changing and dynamic
business environment. Who we are as an organization and what we
stand for are just as important as what we manufacture or deliver.
 C hapter
23
Indian Values as Civilizational
Backdrop

Yesterday’s kings played the same role as today’s leaders. As per

classical wisdom given in various scriptures, the duties of the
king (leader) included protection, growth and development of
the state (business entity), sustaining and enhancing the general
(stakeholders) welfare, maintaining internal order (organization’s
culture), and according precedence to public interest (welfare)
over his self-interest. This understanding of a ‘king’ is in the pure
classical form, with equanimity and gratitude towards all sectors
of society, and not the autocratic image of a glamorous king we
associate with fairy tales!
Yajur Veda (9/22) mentions the oath to be administered to the
king: ‘This kingdom is entrusted to you. You are its director,
controller and upholder of this responsibility. This kingdom is given
to you for the welfare and prosperity of agriculture and nurture of
the subjects.’
As per this oath, the first duty of the king (leader) is to protect
his state (organization) and his praja (stakeholders) and at the same
time enhance their respective welfare. In the happiness of the
subject rests the happiness of the king and in what is beneficial to
the subject, rests his own benefit.
These leaders of yesterday well understood that morals and
values are the cornerstones of society, and this gave them the
192  Alchemy of Change

conviction to rise above temporary provocations. The basic Indian

philosophy looks for congruence between the internal and the external and a
synthesis between spoken words and actual behaviour. The kings used to
set an example by living this philosophy and devoting themselves
to general welfare.
Indian philosophy is based upon an introspective metaphysics.
In their research paper ‘Value Identification for Effective
Performance’ Manoharan and Jayaraman identified seven values
from Indian traditions and culture viz. achievement, right conduct,
selflessness, sacrifice, emotional detachment, unity in diversity and
low priority for accumulating wealth. Indian philosophy emphasizes
that work is a sadhana or a striving towards the goal of realizing the
divinity within us and not simply to satisfy our needs.79
Indic philosophy and values are not associated with a particular
religion or society. They are called: human values, emanating
from Sanatana Dharma, the universal religion. According to our
scriptures, there are certain common codes, which are applicable
to all: truthfulness, non-violence, self-control, purity of mind and
body, compassion, equanimity, righteousness, simplicity and so
on The two important values in Jain religion are: doing good
to others and thinking good of others. Buddhism focuses on the
path of holistic living for the good and happiness of many, for
compassion, goodness and good things of life to all. The great
Indian philosopher, Chanakya, inspired Indian kings to seek success
in administration by the method of righteous action, leading to
manifestation of divinity within.
Indian ethos always seeks to arouse the ‘whole person’, the
essential divinity and infinite strength within, which ensures
success, both internal and external. Based on his study of Buddhist,
Vedantic and Yogic psychology, as well as derivative epic and
Pauranic literature, S. K. Chakraborty has distilled the values
rooted in the deep structure of Indian culture and society and which
could be organically more valid and resonant for the Indian psyche
in the Indian management context.80 These values are:

• The individual must be respected: Not because of his or her

individuality but because of the transcendent, the divine
 Indian Values as Civilizational Backdrop  193

enshrined in him or her, whether good or bad, older or younger,

rich or poor.
• Cooperation and trust: Because the divine inner being of all
individuals is a unity—deception or deprivation of others
is deception of deprivation of oneself; besides such inner
disposition also helps the digestion, believe it or not.
• Jealousy is harmful for mental health: Just as cigarette smoking is
harmful for physical health.
• Chitta-Shuddhi or purification of mind: With the noble thoughts of
compassion, friendliness, humility, gratitude and so on, these
bhavanas lead to a refined and accurate perception of human
relationships, contributing to sounder decisions.
• Top-quality product/service: Which is primarily a function of
the quality of the mind or consciousness of doer, and only
secondarily of quality circles or statistical quality control.
• Work is worship: Because the best way to approach the divine
through secular life is to offer each piece of work mentally—in
as complete, perfect, humble, and pure in form and spirit as one
offers a flower or a fruit or a sweet to Him—this can stimulate
work ethic in the healthiest way. When work is treated as
worship, it leads to excellence in task performance.
• Containment of greed: Whether of tangibles ( e.g., money) or
intangibles (e.g., praise), because it causes stress and robs the
individual of wisdom.
• Ethico-moral soundness: Because every action or Karma is a cause
for a subsequent effect—wholesome as well as unwholesome—
and also because ethico-moral soundness gives peace of mind
and promotes mental health.
• Self-discipline and self-restraint: Because they conserve energy,
strengthen will power, create trust and confer dignity.
• Customer satisfaction: Because he is the divine come upon us in
human garb.
• Creativity: Because human creativity is an integral component
and extension of cosmic creativity; but this link has to be
experientially cultivated through mind stilling.
• The inspiration to give: As opposed to the motivation to need, grab and
so on because giving is more fulfilling, it adds more meaning to
194  Alchemy of Change

work and life; also, the individual lives in society with ‘debts’ to
supra-human, human and sub-human beings. Besides, giving
with humility is more dignified than petty needs.
• Renunciation and detachment: Not of or from duties and respon­
sibilities, but of/from selfish results/rewards and egotistic
demands in the workplace; of/from the lower, unregenerate ego
and its vanities.

Chakraborty feels that it is a very compact profile of human values,

anchored in the transcendent aspect of human existence, which
Indian management should immediately begin to understand,
explore and implement. He also feels that these values still silently
nourish Indian society and culture outside the organized, urbanized,
university-stamped and rootless upper crust of our population.
The essence of Indian ethos is that there is commonness,
universality among us all. There is the essential oneness of life and
at a deeper level of an all-pervading consciousness; everything in
the world is interconnected. Every individual is part of a cosmic
whole and at the same time is himself a whole, full, complete and
autonomous self. It is like the drops of water which make up the
ocean, but each drop is complete in itself. This calls for treating
everyone with love and affection as if they are us.
‘He beholds the self in all beings and equally beholds all beings
in the self,’ says stanza 29 of chapter VI of The Gita. It says that the
perfect person is not merely one who has realized his own divinity,
but one who has equally understood and has come to live in an
intimate knowledge and experience of the divinity inherent in all
creatures without any distinction whatsoever.

Values in the Bhagavad Gita

The Bhagavad Gita was composed against the backdrop of a war,
where Arjuna felt that the situation was futile and the fight should
be abandoned. Sri Krishna, Arjuna’s alter ego, tries to help him
surface his self-deception and attempts to bring him back to his
own self by getting him in touch with the knowledge of the self. Sri
 Indian Values as Civilizational Backdrop  195

Krishna did not alter the situation in war preparations; he merely

talked to Arjuna, thereby liberating him of his ‘dharmsankat (moral
dilemma)’. The purpose of Sri Krishna was to help Arjuna take
charge of himself, and therefore, he tried to persuade Arjuna see for
himself what was ailing him. Once Arjuna’s mind became quiet and
calm, he found new courage and confidence. The Gita shows that
even a balanced human being is sometimes faced with self-doubt,
disorientation and scepticism about his own responsibilities and
that these can be managed through the process of acknowledging
and deep self-reflection.

‘I find a solace in the Bhagavad Gita that I miss even in the

Sermon on the Mount. When disappointment stares me in
the face and all alone I see not one ray of light, I go back to
the Bhagavad Gita. I find a verse here and a verse there, and
I immediately begin to smile in the midst of overwhelming
tragedies—and my life has been full of external tragedies—
and if they have left no visible, no indelible scar on me,
I owe it all to the teachings of the Bhagavad Gita’, says
Mahatma Gandhi.

The Gita gives us the true philosophy of life, of action and a set of
values, as divine wealth.
Stanza 5 of chapter VI says: ‘Let a person lift himself by his own
self alone, and let him not allow himself to fall; for self alone is the
friend of oneself, and this self is the enemy of oneself.’
This verse also closes the escape route of externalization of
responsibility for our failures and asks us to look into our own
mismanaged self.
In verse 1–3 of chapter XVI of The Gita, Sri Krishna has given
26 divine attributes, ethical and moral values which make us human
and are the means of discovering freedom.

• Fearlessness: There are many things we fear, particularly the

future; or the fear could be centred on some loss—loss of life, of
power, possessions, relationships and so on. Fear is a product
of our own state of insecurity or imagined inadequacy. Behind
196  Alchemy of Change

the emotion of fear, there is always a thought, which we are

not able to discover due to our ignorance. When we gradually
remove the ignorance through spiritual evolution, there is
knowledge—there is fearlessness.
• Purity of mind: It means cleanliness in our interactions. This
cleanliness is possible when we are free from deceit, cheating
and falsehood in our thinking and have honest intentions and
purity of heart. Inner purity enables us to see purity in everyone
and generates love, respect, togetherness and good interpersonal
relationships.
• Commitment to the pursuit of knowledge: Devotion to knowledge is a
positive way to persuade the mind to leave its low temptations.
To assimilate our own knowledge, which is very much within
ourselves, we have to contemplate with mastery over the senses.
A mind, thus awakened to the serene joys of the self, will make
us a perfect human being.
• Giving: It is a deep-rooted cultural value, born out of the capacity
to restrain our instincts of acquisition and replace it with the
spirit of sacrifice. Giving what is ours without ego, that is, giving
in such a way that the person who receives is happy and does
not in any way feel small or obligated, is real giving. Charity
develops the capacity to detach ourselves from the wealth we
possess and gives us an opportunity to serve.
• Self-control: This is control at the level of sense organs and organs
of action. To tune the mind to the self, we need a subtle energy,
which we can discover within ourselves only when we control
our sense excesses. This makes us free, powerful and influential.
• Sacrifice: It refers to performing daily rituals such as prayer,
which help us control the sense organs and take action that
is based on dharma (duty), performed without expectation of
reward. Doing what is required to be done for a cause, without
selfishness, begets bliss.
• Self-learning: Regular studies, coupled with understanding
and regular, practice give us an atmosphere wherein we can
spiritually grow and have the courage to live in self-control of
the sense organs, leading to inner wisdom and capacity for self-
exploration to understand the real.
 Indian Values as Civilizational Backdrop  197

• Self-austerity: It is reducing our indulgences in the outside world,

taking ups, downs, pleasure and pain as just natural laws,
gaining more and more energy within ourselves and applying
the new-found energy for the purpose of self-development,
blissful living and welfare of others.
• Straightforwardness: This refers to alignment between the mind,
the word and the action. Crookedness in thought, emotions
and general conduct develops in us a split personality.
Straightforwardness is selfless but purposeful truthfulness and
simplicity.
• Non-injury: A hurtful act can be physical, verbal or mental,
according to the means used and, thus, there has to be absence
of hurt or harmlessness in all our actions. Our motives have to
be pure and clean and mind trained to be free of harmful intent
or violent feeling in thought, word or deed towards all living
beings.
• Truth: It is only due to fear of facing certain facts about ourselves
that we lie. This makes us weak, creating a self-destructive
influence and a split in our personality. One is advised to say
not only what is truthful but also what is pleasing and beneficial.
Though there must be no deceit or ulterior motive in telling the
truth, but it must be cushioned so that it does not hurt, but must
always be told. While it is important to say what is pleasant, it
should not be at the cost of what is true.
• Controlling anger: Anger comes from anguish arising from
unfulfilled expectations, hurt ego, criticism and discomfort. All
of these are controllable and we should have the capacity to
check at the right time, waves of anger as they mount so that
we do not manifest anger in our actions and damage others and
ourselves.
• Self-denial: It is basically the spirit of renunciation, not physically
renouncing the world but keeping away feelings of ownership
and attachment. This refers to performing action as a thing to
be done for the love of inner wisdom and purification, leading
to self-development. This involves a feeling of surrender where
we operate with the consciousness that the work is in our hands
but not necessarily the results.
198  Alchemy of Change

• Peacefulness: There is a sequential order strictly followed in the

development of thought. If we are conscious of truth, harming
none, keeping an even temper, in a spirit of renunciation, we
shall come to experience peace and equanimity even in critical
situations. Getting worked up detracts us from efficiency while
a peaceful mind can successfully keep our inward balance and
intellectual poise even in the midst of outrageous circumstances.
Peace is resolution of the mind and is possible only if there is
no self-judgement. If we stop making judgement on the basis of
our mind and learn to accept the facts, we find there is peace.
• Refrain from criticism: We normally criticize others because we
are not happy within ourselves. Such behaviour is ordered
by the personality behind it and is often a way of trying to
handle jealousy. Criticism deprives us of the opportunity for
self-correction, since, instead of improving ourselves, we try to
cover up our own failures and resort to fault-finding in others.
We should develop such an inward harmony that our speech
should echo the fragrance of sincerity, devotion and love, and
we should stay with ourselves to look at the problem that is
creating pressure for us to talk about someone else.
• Compassion: It is an expression of love towards another being
who is in pain of any kind. Our acting upon in such a situation
is the expression of love resulting from empathy with the pain
of another. It is helping others without their asking for it—it is
caring. Compassion is the feeling of tenderness towards all kinds of
living beings and love alone can discover an infinite amount
of tenderness in us to sweeten our lives. Love is a consciousness,
not just an intense feeling for one person or object or a passion.
Since love flows from truth, it is selfless as well as self-fulfilling.
• Absence of ardent longing: It is about the inherent power in all of us
to appreciate objects and sense enjoyment, without a longing
arising in us. Even if a fancy occurs, we do not respond to it by
way of controlling our sense organs from extreme indulgence.
We do our worldly duty without greed or attachment to either
physical comforts or money, remaining in self-control without
endless hunger amounting to greed.
 Indian Values as Civilizational Backdrop  199

• Softness: If we have established ourselves in the noble qualities,

we shall be able to bring forth beauty and harmony in our
interface with the world outside. Our behaviour will be gentle
and soft and people shall be able to talk to us freely, happily
and without fear. Softness implies accommodation, accepting
other’s limitations and understanding its source.
• Modesty: This is particular kind of shyness—shying away from
praise and from extolling our own glories—remaining objective
and not flattering oneself. Modesty retains harmony of the social
fabric around us while excessive unconventionalism discomforts.
• Freedom from restlessness: Restlessness of our mind gets reflected in
our physical movements, the body shadowing the condition of
the mind. A constant restlessness or a sudden outburst of activity
or immodest shaking of body are the expressions of agitation
in our mind. We need to cultivate a steady character and a
purposeful personality through the knowledge of and mastery
over self.
• Energy: This is not the mere physical glow or shine of our skin
but refers to inner brilliance. It is the capacity to face challenges
with confidence, and the ability to change and influence the
thinking of others. We can serve all and discover a sense of
fulfilment through the vigour, spiritedness and abundant energy,
achieved by the brilliance of our intellect, the serene poise in
our activities, and the expression of love for all, emerging from
the innermost depths of our being.
• Forgiveness: It is the capacity to face the most powerful opposition
and provoking situation with an unruffled serenity. It is
composure where there is no change within us even when we
are put to physical or mental inconvenience or when insulted or
injured by others. In such a situation, anger does not arise and
we get an opportunity to understand the other person. Unless we
have the readiness to accommodate and allow the person to
behave as he is, there is no way of understanding him.
• Fortitude: This is the will to survive adversity and sustain our
good qualities when the circumstances are unfavourable and
the body and sense organs are tired or in pain. The attitude
200  Alchemy of Change

to stick to our guns and not mind the pain is fortitude. The
sacred energy from which fortitude trickles down comes from
strength of faith, conviction in the goal, consistency of purpose,
vivid perception of the ideal and a bold spirit of sacrifice. This
sacred energy gives us the capacity to happily put up with pain
and unfavourable circumstances.
• Purity: This refers to both the inner and outer cleanliness and
purity. External cleanliness and purity of environment is also
an important discipline, as it helps create a healthy frame of
mind. Inner cleanliness is a mental disposition involving purity
of thoughts and motives and is the opposite of one assailed by
emotions such as hatred. We have to look into our own mind
and as the emotions of hatred, enmity, deceit, likes or dislikes
arise, we have to create the opposite attitude and develop a mind
that is predominantly pure.
• Non-hatred: This includes not only absence of hurting or harming
but also absence of even a thought of hurting another. Just as
we will never have any idea of injuring ourselves, we, in our
recognition of the oneness in all living creatures, must come to
feel that to injure anyone is to injure ourselves.
• Absence of pride: While a certain amount of self-respect is
necessary, demanding respect from others is what is negated
here. Working without hankering for fame or recognition is
true work. It is about renouncing our over-exaggerated pride
and notion of self-honour.

To assure ourselves of a right way of living, we must respect and live

these 26 values of life. There is commonness, a universality, among
us all. Treating everyone with affection, love and concern, as if they
are our own selves, is the true path to freedom and perfection—a
true path to good leadership too.
One of the most successful change efforts in modern Indian
history was freedom movement, piloted by Mahatma Gandhi. One
can checklist most of the values enumerated above. They were also
reflected in his simplicity of attire, his cordiality with his opponents,
authenticity and so on.
 Part VII
Indian Model for
Driving Change
 Indian Model for Driving Change  203

So far, in this book, we have looked at the following:

The importance of culture and values has been emphasized and

deliberated in detail. However, despite similarity in management
practices and technology across the world, there are distinct
management cultures in American, German, Chinese and Japanese
organizations. These distinctions often influence how people will
relate to each other, how change will be effected and so on. There
are significant cultural overlays influencing the effectiveness and
success of change efforts. This is understood widely and that is
why multi-country expat experience is a necessary component in
grooming of global leaders. This is especially important in a country
like India where roots of some of these underpinnings of culture go
back to several millennia.
Therefore, change management is not a matter of simply
following a particular model or following steps. If change always
followed an exact pattern, if it was always predictable, there would
not be any need for different models. The right approach will
be specific to the situation and organization culture. We need to
204  Alchemy of Change

customize our change efforts based on the unique characteristics of

the change in question, the attributes of the organization and the
cultural ethos of the society it belongs to.
Models of change are useful in that they describe and simplify
a process and enable an understanding of the connection between
the elements involved, but copying something foreign, though more
glamorous and alluring, is not wisdom, as that disturbs the inner
psychological composure in the long run, especially coming from
a society whose values are different.
Warren Bennis, one of the most perceptive and experienced
writers on leadership, a distinguished professor at Southern
California University and adviser to four US Presidents, writes about
the decline of American society and its industrial environment.

The new corporate thinking casts CEOs as global warriors

rather than national ones. In other words, nothing counts except
profits, and profits count because they are the sole measure
of the CEO. Conscience and competence take a backseat to
ambition, as the wheel that turns the fastest gets the bonus.
There was a time when CEOs were civic leaders and corporate
statesmen. Today, they have no interest in anything but their
own bottom lines. The visionaries, too, are gone. Only sure-
fire products and systems win the attention of the CEO, who
has neither the time nor the inclination to commit his or her
company to a potentially innovative or even useful product.
Our best qualities are integrity, dedication, magnanimity,
humility, openness, and creativity. These, of course, are the basic
ingredients of leadership, and our unwillingness to tap these
qualities in ourselves explains, to a large extent, the leadership
shortage.81

Systems and practices are developed keeping in mind the social,

political, economic and cultural needs of the society, and what we
are doing is trying to copy the systems of a society, which itself is
unhealthy, a society which practices individualism and self-interest
and where the law is treated as an instrument of assault. Indian
organizations are struggling to implement these frameworks
 Indian Model for Driving Change  205

effectively because they are still not aligned to the Indian culture
and environment. The Indian model for managing change has
to be developed based on the Indian context of societal norms,
culture, economic and socio-political factors, as well as value
system of the people. Leading change is about leading people as
whole as they are.
The people in the East have a different orientation; they are
taught the meaning of life and raised on the teachings of scriptures,
saints and philosophers such as Chanakya, Confucius and Lao-Tzu.
They are taught to concentrate all their energies on actions and
not always clinging to expectations about the fruits of their labour.
Indian philosophy balances the pursuit of wealth and material
success with the mastery of the self and the quest for inner happiness.
In his very thought-provoking article ‘Theorizations on
Leadership’, T. V. Rao says that there is plenty of theory on leadership
—much of it from the West, a bit from the East and a little from
India itself.82 Based on the study of these theories, he has given a
few trends of leadership but has also mentioned that the trends
so analysed give rise to many questions for which the practitio-
ners should provide answers. The key question is what are the
characteristics needed of leaders today given the realities of our
culture and stage at which we are in our organizations? What
qualities help a CEO or top manager lead his organization and
make an impact?
While mentioning that much of the leadership theory is from
the West, Rao has posed an important question of what are the
characteristics needed of leaders today given the realities of our
culture, where he also talks about the Indian mind, referring to
our value system.
Arnold Toynbee, Nobel laureate, while lauding Indian ethos
and wisdom, says:

It is already becoming clear that a chapter which had a western

beginning in business management will have to have an Indian
ending, when the world adopts rich thoughts of Indian ethos
and wisdom, if it is not to end in the self-destruction of the
human race.83
206  Alchemy of Change

What are other cultural overlays in Indian context? A millennia-old

culture may not be visible at first sight but continues to influence
Indian mind in myriad ways, especially in the context of change.
An Indian mind looks around for moorings in values embedded in
its conscious and sub-conscious mind. Awareness of these influences
has helped up propose the following model for change.
To begin with, just as Dharma is context- and time-specific, as
opposed to absolutist concept of religion, this model acknowledges
that the appropriate model to be adopted in any given context will
have to be arrived after taking into consideration Paristhiti (socio-
political-cultural environment) and Manyatāyen (local values) along
with Parikalpana (vision and growth ambitions).
Indian Model of Change Management
 Indian Model for Driving Change  207

Sankalp
Of these, values are the most distinctive part. If these values are in
accordance with Indian ethos and culture, change management
creates less resistance and has greater chances of success. We have
already discussed the distinctiveness of Indian values in the minds
of a majority of Indian entrepreneurs and industrialists. At the risk
of repetition, some of the common ones are premium on karma as
the final arbiter (as in karmayog), seeing organization as an extended/
joint family, restraint in conduct, respect for nature, welfare for the
masses (even those not a direct part of the organization, as evident
in construction of health and education facilities and so on). These
values guide the world view, including how changes are perceived
in the environment and how to adapt self and the organization from
the long-term objective of Samriddhi (prosperity) and Sthāyitva
(sustainability). One of the necessary functions of a leader is to have
a Parikalpanā (vision).
So these values of top leadership play a part at three levels.
First, choice of growth direction. Second, choice of technology and
its impact on present employment. Many Indian business houses
hesitate in adopting technologies that would drastically reduce
employment. Third, choice of strategies businesses would adopt
on how to bring about change.
All these inputs combine to create not only a compelling need
for change but also broad contours of the way forward.

As mentioned earlier, particularly in Mega Corporation, a

full-fledged cell was created comprising professionals with not
only domain knowledge of people management and IRs but
also industrial engineers, planners, statisticians and so on, who
rendered invaluable help in data collection on environmental
challenges, industry-wide productivity statistics, best practices
and so on. These data were useful not only for creating and
promoting a compelling need for change but also for sharing
these with various employee groups, including worker
representatives, including for creating a supportive climate
for change.
208  Alchemy of Change

Karta Leadership
The organization being an extended family, we need a philosophy
of leadership that is always focused on enlisting the hearts and minds
of the members through inclusion and participation. Winning over
hearts and minds and dealing with emotional aspect of change is a
difficult and draining task. When we talk of changing mindsets or
mental models, we try to persuade the individuals to give up some
of his assumptions and beliefs. This can take place only by way of
influencing and persuasion, which people will accept only if it comes
from someone whom they trust, respect and who has credibility.
Even if people do not completely agree with the proposed change,
they are more likely to go along with it, as they tend to have
confidence in those they trust. We need leaders with wisdom
and understanding of cultural ethos to cope with the emotions of
people. We need Kartā like leader to manage this larger family in
the manner s/he manages the joint family. Kartā is epitomized as
an empowered and empowering, omnipresent, guiding, protecting
and caregiving entity in the collective (joint family). Thus, kartā
becomes the anchor. However, following the value system, she or
he does not impose but inspires individuals and encourages them
to move forward based on this intrinsic motivation. Hence, she or
he is not a hierarchical position. In an interview with the author,
Dr Harismita Trivedi says:

Indian ethos slightly defers from the western concept of ‘power

distance’—in that it is less about hierarchy and more about
respect, a fulfilment of the need for security and care. ‘Power’
here is that of ‘expert’ power. Western interpretation of ‘power’
in this context is essentially ‘position’ power.

The kartā extends warmth, affection, care and nurturance to

everyone in the family, has empowering orientation, and guides
the direction of individual growth and development through
support, advice, training and counselling. She or he is demanding,
affectionate, listens to everybody in the family, gives importance
to everybody, takes care of their interests, is easily approachable,
 Indian Model for Driving Change  209

consults others and takes decisions keeping in mind the welfare

of the family as his or her sole concern. Warmth and other traits
as possessed by kartā-like leader are the conduit of influence that
facilitate trust, communication and absorption of ideas.
It is to be noted that kartā is a role prototype that is performed by
the head of the organization, independent of whether it is a family-
run or professionally managed organization. Chief characteristics
and benefits of kartā leadership are summarized below:

• Operates from a strong sense of values of compassion, fairness

and nurturance.
• Is always sensitive to the feelings of others.
• Can effectively deal with emotional side of change.
• Releases positive energy such as intimacy, togetherness, mutual
understanding and respect. This, in turn, facilitates integration
between individual and organizational goals.
• With a kartā-like figure, people trust him or her and look for
emotional support in formal work environment.
• With high level of trust and credibility in the leader, the comm­
unication becomes effective and ideas get easily absorbed.
• Persuasion and influencing by a person with high level of trust
and credibility helps in creating willingness for and commitment
to change.
• It becomes easier to bring change in mental models, mindsets
and behaviour.
• Employees feel empowered and protected.
• Basic human factors are taken care of.

What is distinctive in a kartā leader vis-à-vis other models of

leadership? With the possible exception of an odd person with a
violent childhood from broken homes, the word ‘family’ invokes
nostalgia of a nurturant leadership, the one that supported,
developed and took care of one’s needs within the overall
constraints of fairness and budget. A kartā leader is supposed to
take care of the members of the organization as a family elder. In
traditional Indian organizations, it is not unusual for the owner
to go out of the way for taking care of medical, educational or
210  Alchemy of Change

financial needs of a wedding in the family of a worker even at the

lowliest echelon. This is just one of the many ways the owner may
promote the concept of an organization as an extended family.
Overall amount spent this way in a year may not be very high, but
the owner gets rewarded with a life-long loyalty of most members of
the organization. In such organizations, many people even forego
growth and progression during periods of difficulty and change.
Of course, younger employees, including the millennials, may no
longer be as enamoured of the family concept as some of the older
generations. Yet, kartā-type leadership remains a potent element of
Indian model of change management due to its inherent positivity
and management based on trust.
Contrary to the perceptions of some, ‘kartā’ leadership is gender
neutral. In many business families, it is the matriarch who holds
the sway and performs the same functions as the patriarch in some
other families. There are misconceptions that our cultural ethos
supports patriarchy. In a culture where there are more female
deities than male ones, where rise of Durga to take on demons when
everyone else failed is celebrated, acceptance of female leaders is
more natural than widely believed.
Similarly, it is not always even single person. For example, in
Patanjali group, this function is being performed by two persons,
Ramdev and Balkrishna.

Samarniti
One of the key roles of kartā in the management of change is to
guide, assist and support in the development of Sahmati (consensus)
for chalking out strategies, goals and plan of action (Sandhān) for
bringing about change. It is NOT an imposing role. In a survey of
top Indian leaders on what their key responsibilities are, Capelli
et al.84 listed chief input for organizational strategy and keeper of
organizational culture as the top two and representation of owner
and investor interests as the fourth priority, whereas looking after
owner and investor interests was the topmost priority of Western
leaders.
 Indian Model for Driving Change  211

Satat Sameeksha (continual review) ensures that the strategy,

structure (and processes) and culture are in alignment considering
emergent situations both inside and outside the organization. This
also includes continual review to keep systems and processes simple
because there is an inherent tendency for increasing complexity
in an attempt for greater responsiveness to fast-changing world.
The challenge here is also to address the paradox of increasing
personal autonomy while keeping in check functional autonomy by
institutionalizing capability development a multifunctional/business
unit-wide endeavour. Progressive induction of digitalization,
analytics and widely shared metrics aligned to organizational goals
helps keep everyone on the same page in a transparent manner.
There are organizations where these metrics are not only used to
assess organizational performance but also each unit’s/department’s
performance.

Sashakt Sanrachna
The most critical responsibility of kartā, especially in middle or
large-sized organizations, is to:

• Appoint a Sushikshit Samanvayak (change facilitator or a

coordinator) and Sanchālak Samiti (steering group). It is essential
that the change facilitator should be trained and competent.
Alternatively, he should be trained in change management and
project management skills.
• Assign clear responsibilities to each strategic role, while at the
same time, encouraging collaborative focus on results.
• Disseminate information about these appointments and their
roles and responsibilities.
• Reinforce their charter through unambiguous public support
and appropriate empowerment.

Chief facilitator may be the convener of the key steering group.

This role has two types of eligibility and suitability. She or he should
212  Alchemy of Change

preferably be well versed in change/project management practices.

More importantly, she or he should be strong in communication,
people skills and resilience. Prosci’s recommendations on this topic
has been discussed earlier in the book.
Steering group usually comprises all or most of the key role
holders/influencers in areas/functions where change management
is proposed, along with support functions. In multi-location large
organizations, there may be location-wise facilitators and steering
groups.
We have seen the utility of these roles in the change efforts
discussed earlier in the book. We have also talked about earlier
the unusually substantial amount of time to build cohesion,
transparency and collective responsibility towards the success of
change efforts, especially in Mega Corporation.
In small organizations, challenge of change management is not
so massive. Therefore, the kartā herself/himself may mantle the
role of the coordinator and assemble a team of function heads as
a steering group.
It is also important to note that in this digital age, change is
fast becoming a continual, if not continuous activity more than
major discrete changes. In such a situation, major part of change
management responsibility may rest with one person formally
designated for the purpose with IT/HR function providing the
bulk of support.

Sanskriti

Sandhān
Once the need articulation and determination to embark on the
journey of change has been taken, the next step is to set final and
intermediate goals. As mentioned earlier, it is very critical to set
short-term and intermediate goals so that those involved and those
affected by change continue to experience and celebrate successes
amidst pain of change. This can make all the difference between
success and failure, especially as the journey may take months
and years.
 Indian Model for Driving Change  213

To appreciate the criticality of the middle, it is worthwhile to

note what Rosabeth Moss Kanter says, ‘Welcome to the miserable
middles of change. This is the time when Kanter’s Law kicks
in. Everything looks like a failure in the middle. Everyone loves
inspiring beginnings and happy endings; it is just the middles that
involves hard work’85 and she gives an example of gooey sticky
mess in the middle in the transition from caterpillar to butterfly.
This middle period is the most frustrating when people begin to
experience the costs of change, including attritions, missing friends
and colleagues, increased workloads, and start doubting the utility
of the whole exercise.
It is here that mid-term successes act as booster shots in the
middle.

Samvād and Samādar

The next most essential ingredient in the process of change is
creating an organization-wide Samvād (dialogue) and arousing
emotional energy about the need for change and the desire to
participate. We normally underestimate the enormity of this
task of awakening. Samvād is not communication even though
communication is part of Samvād. Additionally, Samvād underscores
the validity and Samādar (mutual respect) for counterviews and the
need for developing a broad consensus, a shared vision for change.
Managers and senior leaders have to play the key role in
promoting acceptance and developing support for change. Gaining
commitment to a new direction is not an easy task and calls for
a well-planned strategy. It is the most powerful force bringing
everyone closer to seeing the truth and understanding the whole
picture to capture the hearts and mind of employees. Repeated and
well-planned communication is the first step and, understandably,
Samādar for everyone can be frustrating if there is a divergence,
but we must not forget that change happens only through people;
therefore, management of change is not only rational management
but also emotional management of people. In this context, Samvād
and Samādar help in managing emotional effects of change,
dissipating any negative energy. Thus, they help in creating an
214  Alchemy of Change

ownership for change, a feeling that ‘we’ wanted the change, instead
of just the management.
This Samvād has to be at four levels: from kartā and dominant
coalition/change facilitator to the entire organization and
influencers, from first-line supervisors to rank-and-file employees,
from influencers to people under influence, and from kartā and
other external interface officials to other stakeholder groups,
including media and government agencies. The last is important,
particularly in case of major change and where other entities are
involved, for example, in case of acquisitions and mergers.

Not only Samvād, but continuous dialogue (Satat Samvād) and

mutual respect at all levels and stages were a critical lever of
change in both the successful change programmes discussed
in the book.

Samāroh
Launch is equally important; a puja or anushthaan or just a plain
celebration, seeking divine blessings infuses the whole project
with certain amount of sanctity, something important in Indic
consciousness, even among atheists. Act of seeking divine blessings
need not be restricted to any particular religion; it can even be
couched in secular terms. Celebration is a significant part of the
strategy for the emotional alignment of people. These celebrations
can be held at each milestone of change project. Samaaroh is also
a thanksgiving—a celebration that acknowledges the support of
the divine.

We have already mentioned in earlier chapters that initiation

of havan and involvement of people’s representatives in this
endeavour was an important part of the overall strategy in
Mega Corporation.
 Indian Model for Driving Change  215

Shubh Lābh
This is a standard phrase written on the walls and account books of
most businesses in India, as part of the local tradition. One wonders
if the meaning (i.e., auspicious profits) is equally widely understood.
Auspicious profits could mean one or more of the three things:

1. The fervent hope of the presence of divine blessing: That is

why, in traditional businesses, it is often accompanied by images
of Ganesha (the deity responsible for removal of irritants and
bottlenecks) and Lakshmi (the deity of wealth) or Swastika
(symbolizing good luck or divinity). In every Asian/oriental
culture, there are such symbols which denote divine blessings.
2. It has been obtained in production/trading of goods and
services through ethical means/value-based leadership.
3. The cause itself is noble, for example, hospitals and pharma-
ceuticals, education and so on. Our purpose of including this
in Indian change model is that it imbues the change effort with
a certain positivity, legitimacy and sanctity in the minds of
the masses, aiding (though not guaranteeing) acceptance and
compliance. This is reinforced through Samārohs.

Incidentally, there is no rejection of this phrase even by the secular-

minded because of cultural context, even though they may not buy
into the symbolism.
Change inevitably involves pain and sacrifices at least in the
short and medium term for a significant section of employees, if not
all employees. Engaged employees are willing to bear a lot more
pain than disengaged employees. What triggers disengagement?
One is the absence, or inadequacy of three pillars of engagement—
mastery, autonomy and significance/purpose. Second is the
perception of breach of psychological contract by the management.
Third is the perception that the company may not be following
ethical practices in its operations.
If the company is perceived by the employees to be following
ethical practices and/or is engaged in the business that has a
significant positive impact on the community/society at large; this
216  Alchemy of Change

goodwill capital facilitates the implementation of change through

deployment of voluntary extra effort by engaged employees. This
voluntary extra effort is very valuable because every change involves
overload not only by the people who are entrusted with the task
of change management in addition to regular duties but also by
other employees affected by the change, especially in the transition
period.

Both in Mega Corporation and AG Corporation, the above

model brought change. After creating organization-wide
awareness about the need for change, a well-thought-out
strategy was formulated, which was implemented under a kartā
leadership. Union’s General Secretary of Mega Corporation,
commenting on the entire process of change, told that though
the decisions of the management were tough and firm, there
was no ill will against anybody and it did not show any
bitter feeling even against those who were negative. The
management had no revengeful attitude and showed patience,
tolerance and forbearance. Many others also highlighted that
the management neither had any hidden agenda nor followed
the divide and rule policy and maintained cordial relations
even with adversaries. People developed respect for the
management’s value-based behaviour when it turned down
offer of few leaders of calling off strike against money deal as
opposed to signing the settlement. The management did not
promote any particular group and tried to talk and convince
everybody about the need for a change.
The cases in the beginning of the book clearly establish
that an unproductive culture can be successfully changed with
value-based interventions and that the above model is a tested
product. Both these organizations displayed a significant
positive change not only in performance in statistical terms
but also in terms of attitudes and mindset.
In the words of group chairman of Mega Corporation:
‘The proof of having brought the change is that today I do
 Indian Model for Driving Change  217

not have anybody resisting change.’ While describing the

post-change environment, he further said, ‘Change keeps
spirit, venture, challenge, and breathes enterprise. All this is
happening and what I see is that an excellent job has been
done.’
Describing the new environment after the change, the
Group Chairman observed, ‘Today my organization has
become flexible from rigid. I am as young as I was yesterday.
My yesterday has become my tomorrow.’

Change Facilitator in Chanakya Role

Quite often, HR/IT leaders may complain that the top management/
kartā does not appreciate the need of major change as a necessity
for continued survival and growth. While top management will
have to provide the final impetus and support for major change
effort, umpteen examples exist where HR/IT leaders have built
support coalition and trigger debates that finally led to the initiation
of major change. For considerations of avoiding power play, this
role may be discrete without attracting undue attention as the
driving force, but this will assume more significance in the digital
era. In many such cases, combination of HR and IT leaders will
be quite potent in providing leadership in helping organizations
renew themselves.
Epilogue

The proposed model in the last chapter encapsulates our learning

from not only the three cases given in Part II ‘Experiences of
Change’ but also myriad change experiences, big and small,
in organizations from the private sector, public sector and
multinational corporations, as well as from the accumulated wisdom
of thinkers, researchers and practitioners from all over the world.
Hence, it is not revolutionary; it merely attempts to incorporate
all aspects of change management, besides incorporating cultural
thought, nuances and practices that may resonate more with
Indian/Asian psyche.
To recap, we summarize the distinctions of the proposed model
as follows:

1. Articulate and continually communicate the reason for change

and vision.
2. Provide strong, decisive but consensus-seeking leadership
keeping in mind the interests of all stakeholders, not merely the
owners. Prosperity for all and sustainability is the ultimate goal.
3. Provide empowered structure, including the steering group and
the change facilitator. Changed facilitator should be well trained
with change management and project management skills. As
discussed in the previous chapter and below, in this digital age,
some of these responsibilities may regularly rest with one person
suitably trained for the purpose. In such a scenario, the required
training will become a part of requirement with him or her with
bulk support provided by IT/HR.
4. Maintain continuous dialogue with all sections, including
influencers and the rank and file, based on mutual respect.
5. Seek divine blessings to give the change effort an image of a
sacred endeavour.
6. Set up small wins and celebrate along the way.
220  Alchemy of Change

We have called it an Indian model for change for distinction as

compared to Western approaches, but it is equally applicable in
most South Asian and East Asian contexts due to overarching
similarity of Eastern thought processes, perhaps because of the
imprint of Indic thought across these territories through Hindu and
Buddhist influences. Of course, terminologies may differ because
of language diversity. There may also be subtle differences in each
situation, even though underpinnings may be common throughout
the world.
Management of change is more an art than science. Hence, skill
of planning and execution along with empathy, communication and
compassion without losing the objective will play a greater role in
its success. Jim Dornan gives an interesting analogy of shunting in
a railway yard. He says that an engine cannot go to the parallel
track and ask the coaches to run along and join it. It has to go to
the same track on which other coaches are, approach them from the
front slowly, hook them and then carry them along. Likewise, in
any change effort, the way we approach people to be a part of
the change process plays a crucial role. Change management is a
hands-on job where one has to be with ‘the troops’; It cannot be
done through fiats.
Added to this, with progressive use of outsourcing of non-
core func­tions and rapid emergence of gig economy, change
management will become a core area for HR function. As we saw in
Microsoft and others, change management training and certification
as a step to build an in-house pool of change professionals will
become common, especially in large organizations. Will AI assist
change management too? Possibly yes, especially in mapping
employee emotions, particularly when they are operating from
diverse locations, including homes, hotels and business centres/
co-working spaces, besides regular office campuses.
It will be a cliché to say that the pace of change has not only
become unprecedented, but is constantly spiralling exponentially.
Organizations will have to continually reinvent themselves to
sustain and grow. Therefore, change management may no longer
be a discrete project. If it is a discrete project, there may be several
such discrete projects running concurrently. We have already
 Epilogue  221

discussed in Chapter 3, how the onward march of technology like

AI, analytics, machine learning and so on will significantly reduce
human involvement in routine and transactional HR functions.
By the way, Google CEO Sundar Pichai recently said in MSNBC
interview that AI is more profound than fire and electricity in terms
of its impact on humanity.
Going further ahead, AI may also help in eliciting shop-floor
collaboration and coordination when an increasing number
of humans will be replaced by robots/humanoids, and both
humans and humanoids will work shoulder to shoulder. This is
no space age fantasy; such a scenario is just around the corner.
Added to this, organizations will be caught up in swirling tide
of mergers, acquisitions and amalgamations. We are also seeing
big organizations, such as Satyam, RCOM, Bhushan Steel, ILFC,
Jet Airways and so on, falling by the wayside, especially as the
Bankruptcy Code becomes more streamlined. In all this, change
management will become more and more complex and critical.

Change Management in the Digital Age

Change management itself will undergo transformation in the new

era in the following ways, well elucidated by Emma Cullen86:

1. Organizations are on a continuous treadmill. Change man­

agement will more often be a continuous process than discrete
projects. Therefore, there will be all the more necessity to
build this as an in-house capacity, probably merged into HR
function rather than depending on the change management
consultants.
2. Management roles will not be restricted to those with the most
experience. As major decisions will become data driven, data
science experts will get a seat at the decision-making table
irrespective of age. Having said that, data will never be able to
accurately predict human behaviour all the time. That will not
replace people skills and wisdom to deal with human emotions.
222  Alchemy of Change

Orbit Change
This phrase was recently discussed by S. K. Sharma87—co-founder,
ISPIRT Foundation—in SHRM Conference, May 2019. He
says that orbit change or shift is that kind of change where
an industry changes beyond recognition in 7 to 10 years. He
contrasts electricity generation and distribution with telephony.
He says that if Edison and Graham Bell were to visit India, Edison
will be able to recognize his invention, whereas Bell will not be
able to recognize his invention. A similar orbit shift is happening in
fintech and banking. In fact, as he says, no one knows what changes
are going to happen in the banking industry in the next five years.
Similar shifts can be around the corner in other industries as well,
such as health care. In fact, Sharma further goes on to prognose
that industries in orbit shift will have a larger number of companies
on the path of survival and growth than other industries. One can
imagine the challenges of change management in such a scenario.
So there are fascinating, challenging and unprecedented times
ahead. Let us fasten our seatbelts and let us be ready for exhilarating
change!
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About the Authors

Dr H. N. Arora
Dr H. N. Arora is an organization change specialist. He retired as
Group Corporate Head HR and IR, Escorts Group, after having
held top positions in Bhilwara group, Reliance, Indian Rayon
and so on. He has closely observed the management philosophy
of the founder of Reliance Group, late Sri Dhirubhai Ambani, in
action. Dr Arora has helped many MSMEs and large industrial
conglomerates in successful change management efforts, sometimes
in seemingly hopeless situations. Subsequently, he did his doctorate
on change management and leadership under Dr T. V. Rao.
Even now, Dr Arora continues as an adviser/consultant to many
organizations. He is a keen observer of human collective behaviour,
and a strong believer and practitioner of value-based leadership.
He is an enthusiastic student of Indic thought and philosophy.

Rajan Sinha
Rajan Sinha is the Chief Executive Officer, Mantrana Consulting.
He is a PCC-level certified Life and Leadership Coach from Coach
For-Life, Inc., USA. Formerly being the Head of Human Resources
with many organizations such as HMT, Escorts (including Escorts
Heart Institute), Denso India, OCM and so on, Rajan is an adviser,
trainer and coach to many corporates and NGOs. He has also
facilitated hundreds of workshops and training programmes in
India, the Middle East and East Africa. He is one of the renowned
psychometric assessors in India with the most international
certification.
His other major works have been in the area of design and
implementation of HR systems, policy making, team building and so
on in India and abroad. He is also doing a fellowship at the
Academy of Human Resource Development, Ahmedabad. He is
a keen photographer and traveller.