«MICHAIL MAVROMATIS JOHAN OLOFSSON Department of Civil and Environmental Engineering Division of Construction Management CHALMERS UNIVERSITY OF ...»
The CEO saw the use of external consultation as not necessary for the process to be successful. As he narrated, he believed that a process that is ‘born and raised’ in the company itself is much easier to identify with. Furthermore, the employees, according to him, would receive the change in a better manner if it came from their supervisors, the board members. This process is according to him: ‘our own product’ 2.3.7 Resistance to change The interviewees were asked about the resistance towards the change and how they experienced it throughout the process. The ones in leading positions did not really think that there was any serious resistance against the organizational change. One minor issue that one member of the board located was the initial complaints expressed by some in the company. However, as they narrated, the increased information helped to cure these early ‘symptoms’.
2.3.8 Amount of influence by the process The interviewers attempted to uncover the effects of the organizational change process to each one of the interviewees. The amount of influence for every employee was different. One of the interviewees revealed that they were under stress in the very beginning of the procedure, due to uncertainty and lack of information. However, after a CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2013:120 short period they got to overcome the initial stress and get on board with the change.
Another employee found the effect of change quite positive for their everyday routine.
The reason was that this process added interest and expectations to the office routine.
It has to be mentioned that none of the employees found themselves in a continuously unpleasant situation.
2.4 Establishing the vision The main source of evidence for the understanding of how the vision was established came by the interviews with the CEO as well as by those of the members of the board.
As the CEO narrated: ‘Platzer is on a journey; the owners who brought together the company set a goal, to make the company triple as big’ and he continues: ‘The vision is that Platzer will become the leading company for commercial real estate in Gothenburg’ Talking about the current goal-setting, the CEO described that the company should gradually be bigger, with a bigger company structure where the leaders take more responsibility. Particularly, the Market Areas should take more responsibilities and be ‘stronger’. The roles should be clear; who takes responsibility for the transactions and the special competences. The company should be more specialized instead of outsourcing certain functions. It is a big advantage to have in-house competences when it comes to the competition. To summarize, the CEO believes that the goal is that more employees in the structure should get more responsibilities. One of the goals that were set is the introduction to the stock market. The positive effect of the stock market introduction is that the company will become more visible, hence more attractive to tenants. How are the goals and the strategies created? They are ignited by the board but implemented and realized by the company itself. The goals are set in a three-year basis and are revised quarterly with Key Performance Indicators, which are one of the ‘products’ of the organizational change.
However it is not only the CEO who talks about vision. The interviewees drew a picture of the expectations they have about the company in the coming years. So what are the expectations of an employee of Platzer? The main desire as expressed in the interviews was to have simpler and shorter decision paths. Some of the leaders also express this as a desired outcome of the change. Furthermore the leaders are expected to be clear and distinct when it comes to decision-making. From an organizational structure point of view, they expect that the project and technical departments are coming closer to each other communication-wise. As for the relationship between the customers and the company, the expectations are to improve the efficiency and make the company more visible to the wider public. The optimism of the interviewees was expressed by the belief that the company is going to be bigger and stronger. A few new Market Areas are thought to be on the way as well.
The second series of interviews attempted to identify shifts of opinions and a feedback on the ongoing process of organizational change. The CEO described the vision in a more detailed level in comparison to the first interview. He narrated that the company is working with benchmarking and he is meeting other CEOs of similar companies of the same group and even competitors. He mentioned another Swedish Real Estate company as an example of where he wants the company to reach. The mentioned company managed a great rise of capital within only a couple of years. He also thinks that a company needs to have reached a certain size before it is divided to smaller companies. The rest of the employees and the board expressed the same motive of anCHALMERS, Civil and Environmental Engineering, Master’s Thesis 2013:120 35 swers with the addition that they would like Platzer to have a ‘big company philosophy’ and think that they are on their way towards realizing this vision. As the CEO narrated, every decision that he takes is based on a two-year horizon. The CEO stated also that one factor that affects his decisions is the long-term urban development of Gothenburg. This might not be directly conceived as vision but it definitely has an amount of influence to his decisions and in the long run, the interaction of Platzer with its context. What is the way of thinking of the CEO when setting up a goal? This
is represented in Figure 14:
Figure 14 Goal setting method by the CEO
The first step is to set a goal. This goal usually derives from a vision. The second step is to work your way towards the achievement of this goal. An important component however is to make sure that the achievement is followed-up and new goals are set.
These goals might aim higher or lower depending on the previous goal fulfillment. As he narrated this process is continuous and constantly fed back, as an ongoing loop of continuous improvements.
One of the members of the board emphasized the fact that Real Estate companies focuses on the value of the properties while for example, a consultant company focuses on the competence base of the employees. Therefore, the company focuses on raising the value of the property. The other member of the board expressed uncertainty about the future of the company when asked how they see the company in five or 10 years.
It has to be mentioned though that this uncertainty was not negative; on the contrary rather positive.
The entities that set the vision in the case of Platzer are the board and the owners, which in this case are almost the same people. The vision is then communicated to the company by the CEO and the board, who make sure that the employees understand and strive towards this direction.
2.5 Planning for change The process was planned starting from the summer of 2012. The CEO and the board created a ‘core’ group, which planned this change that would eventually satisfy the desires of the owners regarding the size of the company. In order to achieve the vision and goals mentioned above the company needed to overcome a number of obstacles.
As the CEO and the members of the board said, the previous structure was slightly rigid and the decisions followed long paths before being taken. A more flexible strucCHALMERS, Civil and Environmental Engineering, Master’s Thesis 2013:120 ture was needed, with clearly defined roles and decision paths. By applying the new organizational structure the leadership anticipated to achieve the desired vision component of flexible structure. The perception of the employees about the change is that it was well planned but possibly communicated in a better way. Another part of the planning process was the kick-off, which will be described extensively in the next section.
Looking at the change process from a time point of view, the CEO and the previous board started planning the change by the end of spring 2012. This continued over the summer and passed on to the new board over fall 2012. This process was a product of numerous meetings and dialogue until the end of November 2012 when the process took shape. After that point, the change was communicated informally until the Christmas break of 2012 when the first official notification arrived to the mailboxes of the employees. The change process was described by the CEO as top-down, while other processes in the company, like the budget are circulated bottom-up.
Reflecting on the planning procedure, the CEO narrated that it would have been better if the process went faster. He recognized a few time periods that could have been minimized to reduce uncertainty and ‘gossip-talk’. Asked on why the false rumors arose, he responded that they are clearly a product of ambiguity. As he narrated, there were formal sources of information available to all the employees (e.g. mails and presentations), which clearly stated what the organizational change meant. One member of the board stated that a kick-off similar to the one they had in the spring of 2013 would be necessary in the fall of 2012. This would have helped the employees to understand and get on-board with the change more easily.
Another element of the organizational change was the reduction of the board from seven to five members. This movement ‘shuffled the cards’ in the company and changed the pace of planning of the process. Some members of the board went out of it halfway in the planning phase due to the effects of the change process, and some others were added into the new constellation. The vast majority of the employees believe that one of the elements of success for the change was the orderly communication throughout the planning. At the same time almost all agreed that the information amount could be even bigger and even better distributed.
In the third round of the interviews, one of the leaders narrated that the lead times in the planning process could have been smaller. The long lead times produce anxiety, speculation and cause discomfort even in the most harmonic work environments.
Regarding the flow of information, one of the leaders confessed that there were some miscommunications and uneven flows in the process.
2.6 Implementing change Speaking on a time basis, the implementation of the change began in the end of January 2013. The employees who were not in the board were notified just before the Christmas break, formally and informally. The official ignition of the change of the organizational structure went along with an info meeting where all the employees gathered in the lunchroom to receive the briefing. Furthermore, the CEO gathered all the technical managers and the caretakers and briefed them one hour before the info meeting. The reason for that was that these two groups of employees were clearly affected by the upcoming change. The next two weeks that followed the official launch of the change were characterized by uncertainty and unclear role definition as the employees and some of the board narrated. The kick-off followed a few weeks after.
CHALMERS, Civil and Environmental Engineering, Master’s Thesis 2013:120 37 There the employees and the board got the chance to discuss the newly established core values. As the interviewees narrated, it was an interesting team-building experience, which helped them understand the change and the reasons behind it. On top of that, came the kick-off of the project group. A symbolic move was the presentation of the core values that were discussed on the kick-off on the wall of the main entrance of the office as wallpaper. During the first two months after the official ignition of the change, the leadership had a number of ‘utvecklingssamtal’ (personal evaluation), which as the employees say, were very helpful for them to ‘embrace’ the change.
In the second interview, the employees were asked to evaluate the process until a certain point. Almost sixty days after the official launch of the process, one of the leaders commented that the process ‘is going a bit too slow’. One factor that is thought to contribute to that is the uncertainty about the change of headquarters to a new office space. The other member of the board considered the progress of the process as positive emphasizing the fact that the new teams had already started to work harmonically. The rest of the employees also believe that the process is moving forward in a harmonic manner with only a few minor issues on the table. One of the interviewees, a member of the board, stated that they changed their leadership style throughout the implementation process. The main change was that they now needed to describe the decisions in a more detailed manner. The reason was that new people arrived to the group; hence different personalities and habits were to be faced. Another remark on the implementation process was that it went too fast. As they narrated, some people take more time to accept a changed environment than others, and this has to be respected. Some of them who were not in the board, stated that sometimes various information came from various leaders and this created misunderstandings.
2.6.1 Perception of the change by the clients ‘Platzer prioritizes good relations with the tenants and to offer services that are characterized by proximity and engagement’ The above is a part of the Annual Presentation of the company for the year 2012. How did the tenants perceive the change? Did they perceive it at all? The interviewees stated that the tenants did not really notice the change since it was internally oriented.
However some of the interviewees believed that the tenants were aware that a change was undergoing in the company, simply because their contact persons changed. The ‘face’ of Platzer to its tenants is mostly the caretakers, who were assigned to different properties during the process. Some caretakers had created a tight relationship with some of the tenants and they were ‘suddenly’ assigned to different properties. This is thought to have created discomfort among the tenants. Another factor was the technical managers who were also reassigned. This had as a consequence that suppliers and external partners had difficulties in locating the correct person.