Analysis of an Organizational Change Initiative
Module 4 Assignment 1
Laurie Kraus
Lkraus70@gmail.com
315-447-4423

Introduction
There are several reasons that employees have for fearing change initiatives, including the survival of their job or their ability to adapt to whatever is new. It is essential for managers to understand the problems of identifying organizational problems, identifying solutions, and implementing and refining organizational change. According to the article Decoding Resistance to Change, by Jeffrey and Laurie Ford, when managers perceive resistance as a threat they become competitive, defensive or uncommunicative. They are to concerned with being right and not looking bad that they lose sight of their original goals (Ford & Ford, 2009).
There is much written about organizational change and the reasons that people resist change. Most people do not resist change but resist being changed. It is said that we are content with the status quo; and do not want to go through the trouble of learning new things. But people are not drones and they want to be included in decision making. It is easiest to stick with what is known because that is what is comfortable; it is fear of the unknown. In order to overcome the resistance to change, the workforce must be convinced that the change is needed, the problem is real, and the change will solve the problem. There has to be constant support, so that workers can overcome the fear associated with the change.
Change Initiative
The change initiative that I am going to discuss is still on-going and will most likely not be completed for at least another 12 – 18 months. My company was recently acquired by Lockheed Martin. We are now a wholly-owned subsidiary of Lockheed Martin, and we will be known as Systems Made Simple, A Lockheed Martin Company. Here is a little history on the company I work for so you will have an understanding of why this is a big change for the employees. Systems Made Simple (SMS) is a Healthcare IT Company that is headquartered in Syracuse, NY it was founded in the early 90’s by two businessmen who had very different business styles. The company started out doing most of their work in the private sector, and in early 2004 the company branched into the government sector which led to the company growing at a very rapid pace. Systems Made Simple Inc., was a privately owned company that started out employing as few as10 employees and today has grown to over 430 employees. We have 6 offices and employees located in 23 states. It is a family friendly environment, providing company picnics each summer, holiday parties, golf outings, and sponsoring charity events.
Lockheed Martin is an International Company that employs over 100,000 employees in the United States and internationally. A large company acquiring a much smaller company can be worrisome, we both have very different cultures and bringing them together as one will not be an easy task. “As stated by Brown and Harvey the more that the change has an impact on the culture of the organization, the greater the resistance” (Brown and Harvey, p.160).
Employees heard the news about the acquisition on October 30, 2014. At 8:30am an email from the President of Systems Made Simple was sent out to all Systems Made Simple employees informing us that SMS had reached an agreement to be acquired by global engineering company Lockheed Martin. A video conference was held that same day with SMS and Lockheed Martin Leaders, to talk about the acquisition. The meeting afforded us the opportunity to ask questions and learn first-hand what this meant for us employees.
Adaptability
The culture at Systems Made Simple is very different from the Lockheed Martin culture and I am not sure all employees will be able or want to adapt. Culture is an emergent property of the many practices that happen every day. Change the practices and a new culture will emerge. The culture at Systems Made Simple is definitely going to change based on the acquisition. Before the acquisition Systems Made Simple was a privately owned company, it had a small company feel that employees liked. Summer picnics and Holiday Parties were held each year, bosses could order in lunch for their staff just to say thank you, birthdays were celebrated in the offices etc... Now, that Lockheed Martin has taken over the purse strings for the company they are watching all expenses closely. Lockheed Martin is so large they do not hold these types of functions for employees, so now that we are a part of their company they are trying to be consistent across the board. So the parties that we had last year were the last ones that will be held.
Another reason it will be difficult to adapt is pretty clear, we are totally different companies that use different systems, offer different benefits, and have different policies and procedures and operate differently. For example, Systems Made Simple has around 75 policies and Lockheed has over 2,000 policies, this will be a huge culture change for our employees. Whenever you introduce new policies to employees it will cause some anxiety. The HR Department recently rolled out a series of policies regarding Conflict of Interest, employees are required to read them all, sign them and return to HR. Some of the policies are very confusing so the HR Department scheduled a series of meetings that employees could attend if they had questions pertaining to the policies. These are Lockheed Martin policies and some of the language really does not pertain to SMS employees but since we are a part of Lockheed we are required to acknowledge these policies, even if they do not pertain to us specifically. Culture Change!
It has yet to be decided on what will be integrated with the acquisition. An Executive Committee was formed consisting of SMS Leaders and Lockheed Martin Leaders and they will be responsible for the decisions made with respect to the integration. It has yet to be determined if we are going to change to their payroll/timekeeping system which will affect a number of things including when we are paid and how much vacation time we will accrue. We all hear things, such as no decisions have been made but ultimately we all know in the end we will end up moving to the Lockheed Systems since they are in charge. Indicators of Resistance There are several reasons that people resist change and most of these reasons have a common source. Fear! We have anxiety about how this change will affect us directly. Will I still have a job, will I have a new boss, and how will my job role change? These are very common questions when an acquisition takes place. The CEO of Systems Made Simple sent out a list of FAQ’s after the initial meeting was held, some of the questions were: * Will there be reductions? * Will my job change? * Will the pay schedule change? * Is any of the leadership moving? These are valid questions and the ones that are probably on the minds of most employees. I can tell you that this acquisition is not going smoothly. A resistor we are facing is with decision making. Our Leadership will make an executive decision on something and then it gets over-turned by the Executives at Lockheed. Employees are seeing this first hand it is not leaving a favorable impression. An employee recently decided to resign from the company and our CEO asked her if she would reconsider because the position that she holds is a critical role. She declined and we accepted her resignation. A top executive at Lockheed spoke with her and offered her a promotion and more money to stay. She accepted! This was a slap in the face to our CEO and it upset several people. This was viewed very unfavorably from our Executive Leadership and Human Resources. Another resistor we are facing is talented employees are leaving the company because they are not sure if they will have a job with SMS and do not want to risk being out of a job. Several employees in our Business Development group recently resigned from the company and the reason provided was they did not like the direction their department was headed in. There was a recent job opening and SMS had sourced a candidate for the position and were then told they had to hire this other person for the position because Lockheed was familiar with their work. This for obvious reasons did not sit well with employees in that department. Perception is everything and they figured that Lockheed was going to do whatever they wanted without consideration to SMS policies and procedures. Anchoring the Change
Unlike the other types of change, employees are hardest hit when there is a merger or acquisitions and they may take a long time to recover. Employees want to see and hear from their senior leaders to help understand where the new organization is going, and how this change influences their job and the organization as a whole.
To keep employees informed of what is taking place with the integration we receive monthly updates via a newsletter “The Informer”. In these monthly updates the SMS Leadership discusses the integration and where we are in the integration process. The last update we received was on March 12th and a statement that really resonated with me was “Systems Made Simple and Lockheed Martin are committed to our employees, and the retention of our talented workforce is a top priority” (R. Fishbeck, personal communication, March 12, 2015). I do not completely believe this statement because whenever a company is taken over people lose their jobs and I fully expect that to happen at my company sometime in the next 6-12 months. Once the integration is completed you are sure to have overlapping positions and our employees will be expendable because a) we do not know the Lockheed systems, b) Lockheed will retain their employees since they are already performing the job.
I am not sure how this entire integration will play out, but I do know that Lockheed is pushing to have things there way and ignoring the requests of our Leadership. This problem could have been resolved if SMS Executive Leadership asked more questions before signing on the dotted line. As Kotter points out in his article on Leading Change, change goes through a series of phases that, in total, usually requires a considerable length of time. Skipping steps creates only the illusion of speed and never produces a satisfying result (Kotter, J. 2007). For this change to be anchored SMS Leadership needs to be heard otherwise this change will continue to move along with Lockheed calling all the shots and that does not bode well for the employees of Systems Made Simple. Implementing change takes time, and the one thing that Lockheed is not doing is taking their time. We were told at that official first meeting that they acquired us because of the great job we are doing and if it is not broke then why fix it. But, as you can see from my examples they are trying to change things and at too fast a pace. There needs to be more communication from SMS Leadership than just once a month, employees want to know what is going on so they can prepare for their future. I would be lying if I said I was not worried about my job, but at this point I am going to continue doing my job and pray for the best!
References:
Brown, Don R. and Harvey, Don (2006). An Experiential Approach to Organization Development 7th ed. Prentice Hall: Upper Saddle River, NJ.
Ford, J.D., and Ford, L.W. (2009). Decoding Resistance to Change. Harvard Business Review, 87 (4), 99-103.
Kotter, J. Leading Change. Harvard Business Review. January 2007; 85 (1): 96-103