Introduction to Change Agent The need for a change agent is when an organization is in crisis, in need of a major change. A change agent is referring to the individual who initiate, lead and support change in an organization. Change agents can be external, where large organization would hire consultants from outside the firm. Change agents can also be internal, such as managers or top management personnel who had worked in the organization for a long period of time (ten years minimum).
It take courage to become a change agent and require a new mindset toward individual and organizational performance and a willingness to take risks, dilemma to deal with ambiguity and conflicts, and so forth. The change agent role require individual to possess certain expertise such as problem solving skills, ability to foresee long term perspective and to tolerate rejection, even failure. 1. 1 Advantages and Disadvantages of Internal Change Agent Advantages : Due to their seniority in the organization, they can save time to identify and understand the organization problems.
They have a better understanding of the organization’s history, operating procedures and have maintained a good relationship with various departments in the organization. Easier to be accepted and establish trust. Disadvantages : Their strong bond and ties cause they to be less objective and too cautious when making decisions as they now have direct contact to determine their careers. They might be also lack of certain skill to facilitate organizational change. 1. 2 Advantages and Disadvantages of External Change Agent Advantages : The consultant hire from outside possess special knowledge and skills on organizational development.
Based on their knowledge, they are able to help firm walk out of the crisis (most of the time). They also have impartial view point to provide precise justification on management decisions. Disadvantage : As they are new to the organization, it took them some time to be familiarise with the culture, personnel, etc. Employees are wary of outsiders thus very hard to establish trust. Employees also believed that if problems occur, external change agents can simply walk away leaving the organization to die. 2. 0CEO as external change agent For major organization wide changes, firms often hire external change agents.
They are not constrained by organization’s culture or tradition and politics, therefore it is easier for them to bring a different perspective to the organization for a major change. To offset their limited familiarity with the organization, external change agents usually are coupled with an internal staff from the human resources department. In very large firms, the organization sometimes has its own in-house change specialist. This person replaces the external consultant and works directly with the organization’s management team to facilitate change efforts.
Typically, organization hire external change agents is because the lack of skill and experience in critical area from its current leaders. For example, unable to manage organizational change, not making use of new technology, having problems to restructure and improve organization culture and fail to implement frameworks that keep the company going. 2. 1Consultant Styles Matrix The consultant styles matrix can be used to evaluate change agent to determine which kind of consulting style he or she is adopting. The matrix is based on two dimensions – emphasis on morale and emphasis on effectiveness.
The Stabiliser Style – the consultant is trying not to rock the boat, and to maintain a low profile. It is only merely following the direction given by the top management. Individual will learn to conform and supress internal motivations by organization pressures through this style. The Cheerleader Style – it puts high emphasis on the employee’s motivation and morale. The cheerleader likes to be respected by the group, avoid confrontation situation, pushes for high morale and smoothes over conflict to maintain harmony.
The Analyser Style – the analyser feels most comfortable with the rationale assessment of problems and assumes all facts will lead to solution. The analyser has a background of specialised e3xpertise, knowledge and experience applicable to the solution of a specific problem. The Persuader Style – focuses on both dimensions. Low risk taker, avoid direct confrontation. Often a compromiser, and someone who negotiates deals and resulting change program often to be unsuccessful where organization change is unlikely to happen. The Pathfinder Style – seeks both high levels of dimensions.
Emphasized on team work and strategic analysis to overcome problems. Relies on collaborative problem solving and challenges the underlying patterns of employees. 3. 0Case Study of Lou Gerstner at IBM Louis Vincent Gerstner, Jr. born 1st March 1942 in Mineola, New York was chairman of the board of IBM Corporation from April 1993 until his retirement in December 2002. He served as chief executive officer of IBM from 1993 until March 2002. Prior to joining IBM, Mr. Gerstner served for four years as chairman and chief executive officer of RJR Nabisco, Inc.
Mr. Gerstner received a bachelor’s degree in engineering from Dartmouth College in 1963 and an MBA from Harvard Business School in 1965. Although IBM is one of the largest computing companies in the world when Gerstner took over in March 1993, it was in deep trouble. In 1993, more than 90% of IBM’s profits were sinking fast. One of Gerstner’s first major acts was to cut the budget and man power in the company. He forced IBM managers to set attainable financial goals. Those who did not meet his requirements were sacked.
He removes some products while establishing other new categories inside IBM, and he advocated selling bundles products which improve business problems. Under his leadership, IBM cut billions in expenses (partly through massive layoffs in 1993) and raised cash by selling valuable assets. After sorting out the financial problems, Gerstner turn IBM’s focus from hardware to a wide range of offerings that included software and after sales services. This approach is fronted by IBM Global Services and has become one of IBM’s best ways of selling products.
Gerstner also established IBM’s software group and led the company to acquisitions of Lotus Development and Tivoli. He launched Big Blue’s Global Services unit and its Technology group, which manufactures semiconductors and hard drives. And the company began embracing Linux. Gerstner’s efforts have sky rocketed IBM’s stock price. Gerstner cut long-term debt from $14. 6 billion to $9. 9 billion and boosted IBM’s share price from less than $140 to $168. By 1995 IBM had stabilized and in 1997 the IBM board validated Gerstner’s strategy by extending his contract five years.
By 1999 Gerstner was leading one of the most respected companies in the corporate world of America. When Gerstner left IBM in 2002, the company was once again a top player in its target market. As the world’s top provider of computer hardware, IBM generated $89. 1 billion in revenue in 2003. By 2004, it was one of the largest providers of software, being second after Microsoft. 4. 0. Conclusion Based on the case studies on Lou Gerstner above, we can see that he is one of the examples which demonstrate CEO as external change agent which has successfully helped IBM to survive the crisis.
Till date, IBM remains as one of the largest players in terms of technology industry. As mention earlier the role of a change agent requires individual to have special expertise to lead and initiate change of the organization. Lou Gerstner has proven his capabilities to do so as he does not have any background information for computer industry at that point of time. There are also many other case studies which show case external change agent, an example would be Mr Jack Welch from General Electric.
Certainly there is also other report which supports the CEO from internal change agents this is to provide an opportunity for the current rank of manager to step up and lead the organization. Other organization in the America is currently practising ‘interim CEO’, where the board of directors are able to change a new CEO if the individual is not performing up to expectation. Summing up all of the above, be it internal or external change agent, the most important is to have far sighted and guide the organization back on the right track.