Anchoring change in non-profit organizations

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1 Anchoring change in non-profit organizations TEIO Sofia Georgsson, sofge522 Louise Johnsson, loujo908 Hilda Lycke, hilly963 DPU5

2 Introduction This report is a part of the course TEIO13 Leadership and organizational change. The purpose with this report is to provide the group with an insight in how real-life managers and leaders handle organizational change. In order to achieve this aim, a leader from a real organization will be interviewed and the answers will be analyzed. We chose to interview Pia Carlsson, head of operations at Campushallen/LSIF. Campushallen/LSIF is a non-profit organization and consists of nine board members, 15 employees, 150 instructors and 7000 members. The organization activities include gym, group-training classes, massage among others. Board Head of operations Employees Instructors Members The organization has had a negative result for a couple of years before the new head of operations was hired in The negative economical result and the need for change was due to internal needs and problems, that is, the negative economical result was not because of changed relations of the outside world. The new head of operations managed to turn around the economical result with a lot of small changes, and this report aims to investigate how these changes were anchored among the employees in this non-profit organization. The organizational changes were made without dismissing any employees. Method Literature study The topics and questions in the interview with the head of operations were based on a literature study made by the authors of this report. The literature analysed was the course book The Art and Sciences of Leadership by Afsaneh Nahavandi in Interview The interview with the head of operations was carefully planned based on the literature studied and structured into different headlines. These were professional background, experiences from earlier positions, the change, anchor down, mistakes, differences between non-profit organisations and firms, what could have been done differently and the last headline was information about the organisation. The interview took place during a lunch since there was a tight schedule during this week for both the head of operations and the students. Two students participated in the interview; one was the main interviewer and the other took notes during the interview. The last student couldn t take part since she was ill. The interview was semi-structured which means that the questions based on the literature study were asked together with spontaneous follow-up questions.

3 Quality of data After the interview no follow-up were made with the head of operations, which might have affected the validity of the data. The literature used in this thesis was only one book based on research made in the United States which could be seen as a source of error. Result This part aims to present the results from the interview. The first part about the leader presents the obtained results regarding her background, personal views on leadership aspects and the employees. Thereafter the results regarding the change are presented. The leader Background Education Economist with specialization marketing and organization 1996 First management position at the age of Second management position (IKEA) 2005 Third management position (Proffice) 2010 Hired as Head of Operation at Campushallen/LSIF Important aspects according to the leader Communication - Prefers face-to-face communication in order to minimize risk for misunderstandings - Only answer once, no discussions on s with employees, instead seek up the person in question - Important to lift all employees and adjust your communication after what suits each person Create positive working environment Encourage employees Reward good effort - Celebrated the first positive economical result with champagne together with all employees (symbolic) Need to know where you are going in order to make decisions and explain them to others - Explain why decisions are made - The employees must understand the vision and strategy of the organization Trust is not something you get - it has to be earned Non-profit is not equivalent to unprofessional - Good salaries and conditions are equally important in non-profit organizations Mistakes must be accepted but should be a basis for learning Important to create relationship to followers by building mutual trust and understanding when beginning at Campushallen/LSIF - Individual meetings with all employees - Participated in all activities given during her first year at Campushallen/LSIF - Treat each employee differently, taking each individual into consideration

4 The employees/followers Low average age Low number of sick leave People with training habits are generally easier to encourage and motivate Not afraid to fight Passionate and involved, hard to make them realize when its good enough The employees does not always have the right formal education for the task Why was a change needed? Negative economical result Lack of common and clear vision of the future organization Lack of business strategy Unclear tasks made it impossible to achieve the wanted results The employees are not hired to train and exercise, something the previous recruiter maybe not had in mind Board had problems with trust, empowerment and working with the right things (mistrust due to problems with the earlier head of operations) Problems was not always dealt with Characteristics of the change Actions taken No firing people No change of salaries (not downwards at least) No big planned change but small incremental changes initiated by the head of operators herself Involved handling both employees and the unremunerated board, a challenge Clarified responsibility areas Defined who should be doing what Helped the board in their work (handling right type of questions, shift from operative to strategic work) Cleared up the concept of Campushallen/LSIF (e.g. by questioning the choice to sell candy when at the same time arguing to work for healthy people) Changed design of staff meetings changed the structure and doubled the number of meetings held, created an agenda. Made it possible for everyone to participate in the meetings by scheduling them at daytime and hiring extra staff. The meetings are continuously evaluated and developed Adjusted the meetings after the employees (as they are all active people, a physical activity was sometimes involved) Upheld norms and guidelines for how to behave during the meetings

5 Implementing the changes Board In order to create a change in the board, the head of operator realized that it was important to keep the board happy and meet their wishes. This so she could make them deliver a strategy and vision that she requested from them. Involving employees Most often decisions were made based on group investigations and the decisions and proposed changes were always anchored in the long-term goals. That is, the head of operator did not make decisions to change just based on her own thoughts, instead she asked for volunteers to create a working group that could investigate the specific question. They could then provide a recommendation to her. This recommendation was taken into consideration once the decision was made. Thereafter the suggested change was sent out to all employees in order to receive feedback. Overall No time pressure when it came to decision-making or implementing the changes Analysis and Discussion The following section aims to analyse and discuss the anchoring of changes among employees from different perspectives. Leadership style To begin with, it will be investigated how the leadership style affected the anchoring of changes during the process of turning the negative economical result around to a positive one. As a business strategy was lacking when the newly hired head of operations started her job, it was one of her top priorities to get the board to develop such a strategy for the organization. A vision was important to her, as it could be used when making decisions. It could also be used to explain decisions taken, simply by arguing that they are in line with the organizations long-term goals. Therefore, a vision could work as a tool to anchor necessary changes among the employees. These attribute, to have a vision and being able of making decisions, are charismatic and transformational leadership characteristics universally perceived as positive (Nahavandi, 2012). So, already from her start, the head of operations showed signs of charismatic and transformational leadership and the first action taken could later help her to anchor changes. Moreover, the concepts of charismatic and transformational leadership are sometimes almost used interchangeable, as the distinction between them is not very clear (Nahavandi, 2012). When the head of operations took the role as a leader in the organization, one main focus was to develop a relationship between her and the employees. To achieve this, individual meetings with all of the employees were executed. Having a good and personal relationship with all employees and understand their situation, seems to have been a proactive step that enabled her to anchor various changes among the employees, as she build up a mutual trust already from the start. As the employees hence trusted her and her intentions, eventual resistant might have decreased. Closely linked to this focus on encouraging and motivating through the leader-follower relationship, is the

6 transformational leadership (Nahavandi, 2012). The leader uses these strong developed relationships together with individual traits to get further than just exchanging resources and productivity with the follower (Nahavandi, 2012). The basic exchange activity, also referred to as transactional leadership, is however also needed in order to create change and involves providing resources and bringing structure in exchange for motivation and effective task accomplishment (Nahavandi, 2012). According to the author, one must combine transformational and transactional leadership to establish the relationship needed to enable transformation in an organization. Nahavandi (2012) claims that transactional leadership is a part of most leadership trainings and is therefore a theory that the interviewed head of operations might be familiar with, as she has participated in many leadership courses during her career. When she began her current position she structured tasks, cleared responsibility areas, defined who should do what and made other relevant changes to make the internal situation better. She did not work with a big, planned change. Instead changes were small and decided upon as a need arose. Altogether they resulted in an improved economical result. During the implementation of these changes, the head of operations met little resistance. Her way to proceed with changes in small, incremental steps could be a possible reason behind this, as facing small changes one at a time, may not have been perceived threatening by the employees. To take the individual into consideration, as mentioned above, is according to Nahavandi (2012) one factor of transformational leadership and the head of operations explains further that she is aware of what type of people she is working with. As many of the employees are instructors in different classes, she decided to participate in all activities given in the gym in order to get a deep and thorough understanding of the employees as well as for their work situations. Moreover, the head of operations explained that as different people have different drivers, it is important to find a way to meet and communicate with each individual at their own level. This way of leading will according to Nahavandi (2012) result in the employees feeling motivated and encouraged, which in turn will facilitate change. Seeing and understanding each individual seems to have been a way for the head of operations to facilitate the anchoring of changes among employees. Since she understood what motivates her followers, she could easier affect them by having their different perspectives in mind. Developing these strong relationships to employees will itself make it possible to overcome resistance towards change and is another factor of the transformational leadership (Nahavandi, 2012). If the resistance towards change is almost non-existing to begin with, there will be little need to anchor the changes. However, as developing strong relationships will enhance loyalty and trust, this might also be looked upon as an activity that contributed to anchor the changes. Moreover, the last factor of transformational leadership is to provide intellectual stimulation by new ideas, solutions and empowerment (Nahavandi, 2012) and before changes were decided upon, the head of operations involved the employees. If she had identified a need for a change, she would not just take a decision. Instead she asked who were interested in investigating the subject, and created an investigation group consisting of those employees. Based on their result she then eventually made a decision regarding a necessary change. As the employees were involved in the decision-making, this way of working has likely also resulted in less resistance towards the changes.

7 By combining all factors of transformational leadership above, Nahavandi (2012) argue that the leader will achieve changes in the organization as the way to lead itself actually facilitates change. Another characteristic of positive transformational leadership is according to Nahavandi (2012) to be a communicator and this does the head of operations show indications of, as she encountered the employees differently dependent on their personalities and raises the importance of lifting all individuals. If she gets s she answers once, but if the conversation continues, she instead seeks up the individual and talk face-to-face in order to minimize the risk for misunderstandings. Another positive attribute of the transformational leadership style is to build teams (Nahavandi, 2012). When a decision was going to be made, instead of questioning the previous decision of for example selling candy in a gym, she said that the question was going to be investigated and asked for volunteers, as mentioned above, and created teams. As some researchers suggests that authentic leadership can be seen as the foundation for other concepts such as transformational leadership, there is no surprise that some degree of authentic leadership also can be identified in the studied leadership (Nahavandi, 2012). Consistent with the authentic leader theory, the head of operations did not have to anchor the changes among the employees by argument or rhetoric. A need to try and win the employees over seems to have been absent as the changes were executed in ways that involved anchoring them already before a change had to be implemented. For example, decisions regarding changes were according to above based on investigations executed by the employees themselves. Further on, as everyone was given the opportunity to participate in this work, one could hardly complain once the result was presented. That is, if an employee wanted, she or he could to some extent affect the outcome and therefore also the changes made. Empowerment In order to successfully implement empowerment in the whole organization it often acquire changes in both the leadership style and in the organizational structure (Nahavandi, 2012). The board had initially some problems when dealing with empowerment. Instead of letting the head of operations make the decisions she felt necessary concerning the operations, they asked her for detailed information and documentations regarding her work. Bureaucracy, rigid and formal hierarchy, wrong selection and training of leaders and employees or any of the other factors described by Nahavandi (2012) did not cause lack of empowerment. It was most likely due to fear and previous experience with the former head of operations. The lack of empowerment prevented the head of operations to do her job, so she suggested a new and alternative way to inform the board of the daily operations and in that way she gained their trust. By doing so she met both the boards request about information but she also made it possible to get things in return (a clear vision and strategy for example). This gave her increased empowerment, which also affected the empowerment of the employees. As mentions earlier, the leadership style has a great impact on empowerment. The head of operations at Campushallen/LSIF shared many of the factors that Nahavandi (2012) described. For example she created a positive work atmosphere, she encouraged the employees to take initiative and responsibility and she rewarded good effort. The high degree of empowerment led to high level of acceptance of the control and responsibilities among the employees, just like Nahavandi (2012)

8 explained. This made it easy to trust the employees and to let them be a part of the goal-setting and decision-making processes. The efficiency in the organization increased during the change without any new employees or resources. This change in efficiency could be related to the high degree of empowerment, since it is often connected to increased motivation and higher belief in their own abilities (Nahavandi, 2012). The higher degree of empowerment could have initiated better performed task with higher quality. The analysis above shows that the organization has a high degree of empowerment, where the employees were involved in the decision-making, or at least were allowed to view their opinion before the decision was made. This resulted in acceptance of most of the decisions and the need for planned anchoring of the decisions was very low. This connection between empowerment and anchoring is not considered in the course literature. Individual differences and traits Campushallen/LSIF: s employees are a homogenous group and consist of mostly people born in Common for this group is that they are likely to share the same values about enjoyment of life, desire for autonomy and flexibility and balance between work and personal life (Nahavandi, 2012). This could have had an affect on the little need for anchoring. Since they value flexibility and balance they are more likely to be open minded towards the change than for example the people born in the 1940s that are idealist and self-focused (Nahavandi, 2012). Non-profit organisations According to Nahavandi (2012) there are no real differences in leading a firm in comparison to leading a non-profit organisation. There might be a greater need of motivation to attract co-workers, since the motivation created by money is less in non-profit organisations (Nahavandi, 2012). At Campushallen/LSIF the only instance that works without payment is the board. All the instructors and the employees have a good salary and working conditions, which the head of operations believes to be right and important even in non-profit organisations. There have been little or none problem concerning the differences in salary between the board and the employees, since the board knew from the start that the conditions of their role. Many of the employees at Campushallen/LSIF are very passionate of their work and the head of operations has experienced that it sometimes is hard to make the employees understand what level of work that is good enough. This is similar to Nahavandi (2012); the people of non-profit organisations are passionate and even if a person has a passionate nature it does not mean that they are time efficient. The head of operations came across the problem with time inefficiency at the staff meetings during the change. Her way of handling the meetings was to create an agenda for the meeting, to increase the number of meetings and to involve the staff in evaluations of the meetings to keep the staff to feel motivated. Another problem the head of operations found regarding time inefficiency was the fussy job descriptions, which needed to be updated during the change. All these mentioned organisational changes were necessary to turn around the negative result and to be able to anchor other decisions throughout the organisation.

9 Delegation and Participation Nahavandi (2012) states that there are some specific criteria s for when participation is more suitable; when task is complex, when there is no strong time pressure and if employee commitment is central. During the interview the head of operations identified at least one of Nahavandis (2012) criteria s. She said that changes never should be implemented during tough time pressure. She did also know the importance of employee commitment and motivation in order to gain approval for a change. The head of operations did for example engage a group of employees in an investigation of what products were suitable to sell in the shop at Campushallen/LSIF. The employees that were interested in the matter volunteered to be part of the group. The other staffs at Campushallen/LSIF that were not participating in this group were informed of the result of the investigation to have the possibility to give opinions before implementation. This was a way to anchor the decision in the organisation before the final decision was made. According to Nahavandi (2012) the motivation and satisfaction of the staff increases by delegation. Therefore, from the example above, the head of operations might have increased the motivation in the staff by including them in the process. The head of operations did not use delegation as a common tool. She focused more on reorganising the existing organisation to achieve a more efficient team, which could be seen as a way of clarifying roles. One of the bigger alterations during the change was to help the board to put their effort on the right tasks. Instead of working as a micro leadership, the board needed to work as a strategic leadership. A strategic leadership is to have a long-term perspective in order to guide the organisation (Nahavandi, 2012). When the head of operations successfully had helped the board to change focus, she clarified the goals and expectations of them and let them do the same for her role. To clarify goals and expectations is one of Nahavandis (2012) guidelines for delegation, which might mean that some part of delegation was used from both parts. Reflection and conclusion Leadership style As transformational leadership is best suitable in dynamic environments it may have been an appropriate leadership style for the head of operations to use during the organisational change process. However, once she is satisfied with the overall organization and improvements rather than have main focus on the changes, the leadership style might change towards another way to lead more suitable for that future situation. She came from the outside and entered an organization that had faced a negative economical result for the last couple of years, therefore, she knew that changes had to be made. This provided an opportunity for her to really make it right from the beginning. It was of course beneficial for her to have various leadership training experience in order to also know how to do it right. As she began her new position, she gave a lot of effort in order to get to know the employees and build up a mutual trust and understanding. That is, conditions necessary in order to be successful when executing changes within an organization. Non-profit organisations and delegations There are little difference between a non-profit organisation and a firm. The difference that might exist is mainly in the personality of the employees who are passionate and might need more guidance to be able to be time efficient. The head of operations found that in order to create a

10 positive economical result, which was the goal of the change; there was a need of reorganizing within the organisation to achieve the goal. The head of operations did not use delegation as much as expected, but she used the employees to anchor the change through volunteer participation. Furthermore, she redefined and reorganised roles and set up goals and expectations to the staff of different instances in the organisation in order to increase communication, cooperation and create long-term strategic goals needed to anchor the change. Empowerment The opposite of delegation is empowerment, according to Nahavandi (2012). As mentioned earlier the degree of delegation was low and the degree of empowerment was high, and this is probably one of the reasons why planned anchoring of the changes were not needed. High degree of empowerment provides high participation and involvement in the goal setting and the decisionmaking, which decreases the need for anchoring. Further studies There are some differences in non-profit organisations in the United States of America, where Nahavandi (2012) have made her research, and in Sweden. In the US the non-profit organisations mainly consists of charity and other similar activities. In Sweden there is a well-developed culture around non-profit organisations active in sports and training, which is uncommon in the rest of the world. If the literature study was based on Swedish literature of non-profit organisations instead, the findings might have been different. The result and analysis from the interviews are based on the head of operations own answers alone, that is, they are highly subjective and reflect only her reality. This does not mean that the employees experienced the changes in the same way as she did. It is also likely that the employees experienced the changes different from each other. More interviews should be performed in order to get a more objective result. The book The Art and Science of Leadership lacks overall information on how you should anchor your change, which parameters are relevant, when do you need to anchor your change and some do s and don ts. We found a clear connection between empowerment and the need for anchoring changes and we think that this is a good topic that should be investigated further.

11 References Nahavandi, A. (2012), The Art and Science of Leadership (sixth edition), Pearson: New Jersey Pia Carlsson, Head of Operations Campushallen/LSIF, interview the 26 of November 2013

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