By Murad Huda Email By Murad Huda
May 2017

Harley-Davidson, an iconic brand that has ruled the world of motorcycles, was close to declaring bankruptcy in the1980s. However, a dynamic and transformational leader, Richard Teerlink, with strong belief in people and their potential, brought the organization back to life.

The lesson from that story is that in any business, whether a small retail outlet or a multinational, people are the key factors. People are the players who not only make up the organization’s nervous system but also its mindset. Their beliefs, self-interests, and attitudes towards the organization are what ultimately define an organization’s financial and operational health.

Organizations work much like a human body. The key financial analytics, such as sales, margins, cash flow, and inventory, reveal the physical aspect of a business, but the mental health of the organization can only be assessed through its people. As we all know, the mental health of a person (and an organization) will eventually impact physical health as well.

Transformation is inevitable if an organization’s health is in jeopardy—and that is where an organizational development (OD) process is important. There is no replacement for the insight that a person gains from experience. However, technology exists to help analyze the facts and help make calculative and informed decisions.

An effective organizational development process takes people out of their comfort zones and seeks to alter their mindset. Kurt Lewin, the father of change management, proposed in the 1940s a three-stage transformation theory that is still relevant and easy to implement in any business setting.

Here are the stages:
Unfreeze – Open the organization up: look deep into the operational findings and the financials. A good technical platform such as SAP, NetSuite, CStorePro, or ModiSoft may be helpful tools in getting accurate key analytics. Conversations with customers, employees, and other stakeholders can also provide good insight on operations.

Change – This is the most painful phase, when owners, management, and employees work together, to get to the same page. All aspects of the organization are opened up for discussions: ideas, including airing grievances, reforming strategies, and making people aware of what needs to be accomplished. Additionally, the message is sent that those who are not willing to participate or implement are free to leave. Hierarchal barriers must be minimized for an effective and open dialogue process. An exchange of thoughts between people with years of experience and newcomers is facilitated to reach results that are in the company’s best interest.

Refreeze – Once there is agreement, then new policies, leadership changes, and new goals and operational structures are put in place. A key element is a reenergized organization that is, above all, well aligned and manned by people with a positive attitude. Transformation is now complete but must be followed up on and evaluated on a periodic basis. Modifications must be allowed and details should be altered if needed.

Transformation is bold in that it demands both courage and patience from a company’s leaders: courage to step up and identify the flaws in the system, patience to see the process through. It is risky as it may involve losing some people and adopting new ideas and thoughts, some of which may not be successful or take a while to produce results. The crux of a transformation process is simple: you cannot expect different output from the same input. The process of transformation becomes worthy when the business insights and new and improved ideas meet at a point that is in the best interest of the organization. Consequently, transformation may be bold and risky, but still worth pursuing.

Murad Huda is an organizational development consultant. murad.huda@gmail.com. Business Insights is hosted by the Law Firm of KPPB Law (www.kppblaw.com). Disclaimer: This article is for general information purposes only, and does not constitute legal, tax, or other professional advice.

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