SUCCESSFUL ORGANIZATIONAL CHANGE WITH THE USE OF AN INTERIM MANAGER
Elaboration of the success factors:
leadership, sponsorship, building consensus, communication and consolidation.
Master thesis, MscBA, specialization Change Management
University of Groningen, Faculty of Economics and Management and Organization
August, 2011 Final
Nicky van der Kramer Student number: 1550527
Lindelaan 14 9431 CK Westerbork tel.: +31 (0)6-29237355
E-mail: N.van.der.Kramer@student.rug.nl
Supervisor university Dr. C. Reezigt
Supervisor organization M. van Buren MBA BLMC B.V., Meppel
ABSTRACT
This research examines the factors that will result in a successful organizational change with the use of interim managers. The factors leadership: power and authorities, leadership: political skills, leadership:
balancing the change of the organization and the continuation, sponsorship: active and visible involvement and support from senior management, sponsorship: involvement and support from informal leaders, building consensus: understanding the vision: what, why, how and by whom, communication: reduce rumours, consolidation: the help of sponsors, and consolidation: consistency of successor were subject of this research.
In literature about interim management and general organizational change management the differences between change with help of an interim manager versus consultancy or change without external help are explained. An interim manager is an outsider, only has a temporary role in the organization and has the formal power and authority to make decisions; these criteria explain the specific aspects of interim management and are therefore reasons why change with the use of interim managers is researched in more detail. By using interviews with initiators, interim managers and organization members of five cases and a questionnaire conclusions about success factors can be made.
Concluding: political skills, creating a balance, building consensus by vision, reducing rumours, consolidation with the help of sponsors and consolidation with a proper successor are the identified success factors for organizational change with the use of interim managers.
Key words:
Interim management Organizational change Change management Success factors
TABLE OF CONTENTS
ABSTRACT ... 2
TABLE OF CONTENTS ... 3
1. INTRODUCTION ... 5
1.1 Context ... 5
1.2 Research question ... 5
1.3 Specific characteristics of interim management. ... 5
Temporariness. ... 6
Outsider. ... 7
Formal power and responsibilities. ... 7
The difference between an interim manager and a regular manager. ... 7
Difference between an interim manager and an organizational adviser. ... 8
1.4 Choice of literature. ... 8
1.5 Overview of study ... 8
2. THEORY ... 10
2.1 Definition of success. ... 10
2.2 Success factors from regular change management literature ... 10
2.3 Specific organizational change success factors for interim management. ... 11
Leadership. ... 12
Sponsorship. ... 12
Building consensus. ... 13
Communication. ... 13
Consolidation. ... 13
2.4 Elaboration on potential success factors ... 14
Leadership: Power and authorities. ... 14
Leadership: Political skills. ... 15
Leadership: Balancing the change of the organization and the continuation. ... 15
Hypotheses. ... 15
Sponsorship: Active and visible involvement and support from senior management16 Sponsorship: Involvement and support from informal leaders. ... 16
Hypotheses. ... 17
Building consensus: Understanding the vision: what, why, how and by whom... 17
Hypotheses. ... 18
Communication: Reduce rumours. ... 18
Hypotheses. ... 19
Consolidation: The help of sponsors... 19
Consolidation: Consistency of successor. ... 19
Hypotheses. ... 20
Summary theory section. ... 20
Conceptual framework ... 21
3. RESEARCH METHODS ... 22
3.1 Data collection ... 23
3.2 Data analysis ... 24
3.3 Short description of selected cases ... 25
4. RESULTS ... 27
4.1 Results from interviews ... 27
Leadership: Power and authorities. ... 31
Leadership: Political skills. ... 32
Leadership: Balancing the change of the organization and the continuation. ... 32
Sponsorship: Active and visible involvement and support from senior management.32 Sponsorship: Involvement and support from informal leaders. ... 32
Building consensus: Understanding the vision: what, why, how and by whom... 32
Communication: Reduce rumours. ... 32
Consolidation: The help of sponsors... 32
Consolidation: Consistency of successor. ... 33
4.2 Dataset 1: Quantitative data interviews ... 33
Dataset 1: Quantitative data interviews. ... 33
Dataset 1: descriptive statistics. ... 34
Dataset 1: Mann Whitney U test ... 36
Dataset 1: Correlations. ... 36
Dataset 1: Regression analysis. ... 36
4.3 Data set 2: Quantitative questionnaires from interviewees... 36
Dataset 2: Amount of influence for each variable. ... 36
4.4 Dataset 3: Quantitative results from questionnaires ... 38
5. CONCLUSION AND DISCUSSION... 39
5.1 Answering sub questions ... 39
5.2 Research question ... 44
5.3 Discussion ... 45
Comparison with new literature. ... 45
Exploratory research ... 46
Limitations. ... 47
Implications for further research. ... 47
Practical implications ... 48
REFERENCES ... 49
APPENDIXES ... 54
Appendix 1: Interview questions and questionnaire ... 54
Appendix 2: Results ... 57
1. INTRODUCTION
This research is based on a management question from BLMC, a company specialized in logistics, supply chain management and facility management. The services BLMC provides are executive search and development, interim management, business consultancy and change management. The change management projects are achieved by one or more interim manager(s) and a consultant from BLMC.
In the past BLMC has accomplished some successful change projects with the use of interim managers, but they are not completely aware of the specific factors that led to these successes. Their goal is to describe and investigate the factors that led to this success in a scientific way.
1.1 Context
Organizations nowadays have to deal with increasing globalisation, deregulation, the rapid pace of technological innovation, shifting social and demographic trends, and the growing knowledge workforce;
therefore change has become more important (Graetz, Rimmer, Lawrence, Smith, 2002). Because change is usually hard to achieve (Beer and Nohria, 2000; Carnall, 2003; Kotter, 2007) there is a growing tendency in using external experts in the form of interim managers (Ten Koppel & De Heer, 1996;
Reijniers, 2002). The basis of this research is exploratory, the combination of success factors for organizational change and interim management is a new research combination.
1.2 Research question
The previous signals will lead to the following research question:
Which factors will lead to a successful organizational change with the use of interim management?
In order to answer this research question, 4 sub questions can be defined:
- Which success factors are presented in general change management literature?
- Which success factors are assumed to be specific for interim management according to interim management literature?
- Which factors are important to reach success in the cases of BLMC?
- Are the identified success factors valid in a larger population?
1.3 Specific characteristics of interim management.
In order to highlight the need of this research, specific characteristics of interim management are explained below. Research about change management and success factors are is presented, but specific research that combines interim management and change management is limited (Wichard, 1994; Burger &
Staveren, 2002, Boon, 2005).
Interim management can be defined as: ‘the fulfilment of a temporary function within an organization with executive tasks and the power and responsibilities accompanying that function. An
interim manager usually works on the executive level or just below this function‘(Banning & Klep, 1987:
13). This definition is used by several others authors (Wichard, 1994; Burger & Staveren, 2002), although it is sometimes slightly adapted. Geerdink and Ten Koppel (1994) highlight change management in their definition: ‘interim management is a temporary surplus of change management experience intended to improve the ability to change of the organization and the capability of management concerning change management.’ (Geerdink & Ten Koppel: 1994: 63).
Interim management can be categorized in two types specifying the goal of the assignment, according to Wichard (1994), Van Hout (2002) en Reijniers (2002). Type one is defined as substitute management, where the focus is on the temporary fulfilment of a vacant position. Type two is defined as the management of change; structural, strategic and operational organizational changes are initiated and implemented in this assignment (Wichard, 1994; Van Hout, 2002; Reijniers, 2002). In this research the focus will be on type two, interim management combined with organizational change.
The distinctive character of using interim managers to reach organizational change in relation to organizational change with the use of organizational advisors or without the use of external help is explained below. Therefore, the differences between interim managers, organizational advisors (consultants) and managers from the client organization will be discussed. For this comparison we will use the criteria that several authors (Banning & Klep, 1987; Van der Togt, 1994; Wichard, 1994; Burger &
Staveren, 2002; Boon, 2005) agree up on when they describe interim management and the interim manager.
These factors are temporariness, outsider, formal power and responsibilities (Banning & Klep, 1987; Van der Togt, 1994; Wichard, 1994; Burger & Staveren, 2002; Boon, 2005).
Temporariness. There is some discussion about the term temporariness and in particular on which factor this temporariness is based on. Roos (1993) argues that temporariness is based on the fact that an interim manager is hired in order to achieve certain results instead of having an indefinitely contract.
Bekker (1994) states that the interim manager will leave the organization after a specific indicated period of time or after achieving a specific identified result. According to Wichard (1994) temporariness is the specific aspect that separates a regular manager from an interim manager: ‘An interim manager has a temporary, concerning a specific period of time or until the moment that the specific results are achieved, managerial role in the organization. This restriction is (usually) not present for a regular manager’
(Wichard, 1994: 19). These phrases imply that temporariness is based on the requirement that specific results have to be achieved in a certain time frame and that the specific period of time is less important (Boon, 2005). The importance of temporariness is further discussed by Schriever (1983) who claims that temporariness is a necessary condition in order to achieve an independent role and achieve success. Huys (1983) states that the temporariness of change management projects is the most powerful argument to achieve results. Van der Togt (1994:15) agrees and adds that ‘the temporariness gives the interim manager the possibility to take drastic decisions’. Boon (2005) disagrees with Huys and Van der Togt by stating that temporariness can not be explained by using pressure of time as an argument, but pressure of time to realise
Summarizing the previous statements it can be concluded that there are different views about the term temporariness in relation to interim managers. The previous researchers do agree that the term temporariness is referring to the criteria that there is no regular employment contract and that temporariness is important to realize results.
Outsider. The importance of the outsider perspective is elaborated by Boon and Devos (1993) and Bekker (1994) who made a comparison between an external interim manager and an internal interim manager. An internal interim manager is a manager from within the client organization and is assigned to a specific project, an external interim manager is someone outside the client organization (Boon and Devos, 1993). In this research, the term interim manager is a substitute for external interim manager.
Van der Togt (1994) explains why an interim manager should be someone from outside the company; a stranger will stimulate people, he brings experience from other organizations and organizational change processes that can be used in the client organization; the external interim manager will not be influenced by the present culture; hiring an external interim manager will have a signalling function for the rest of the organization to stress the importance of the situation.
Benefits of using internal interim managers are explained by Wichard (1994) and Dooms (1994) who conclude that an internal interim manager has lower costs and that the knowledge and experience of the assignment will stay within the organization.
For this research the benefits of using an external interim manager will be valued as more important than the benefits of using internal interim managers. The independence of an external interim manager is an advantage for creating organizational change, and independence is perceived to be less present with internal interim managers. This independence of the external interim manager can be important in increasing decisiveness and effectiveness (Boon, 2005). The outsider effect is the most important aspect that relates to the independence of the interim manager. Because the interim manager does not have to deal with the past and the future of the organization and his role in this past and future, he has the ability to be independent (Boon, 2005). Therefore this research will exclude internal interim managers.
Formal power and responsibilities. Boon and Devos (1993) believe that the explanation of power and responsibilities form an important part of the formal assignment. They concluded that power and responsibilities are sometimes described very vaguely and sometimes described with great detail. In Boon (2005) he explains that power is about what the interim manager can do and which means he can use to achieve his actions. Schriever (1983) states that the power of an interim manager should be consistent with the assignment: ‘he should have the ability to make decisions in order to control the process of organizational change’ (Schriever: 1983: 428).
The difference between an interim manager and a regular manager. These differences are partially discussed previously when discussing the temporary aspect of interim management. Ramondt (2004) gives a further elaboration of the differences and states that the interim manager will come to an organization to solve a problem and leaves when this problem is solved. A regular manager is concerned about the overall continuity of the organization.
Feltman and Hughes (1999) see a clear distinction in personal characteristics of regular managers and interim managers. They conclude that an interim manager will score higher on the characteristics working harder, leadership role, organised type, ease in decision making, pace of work; and lower in need for rules, need to belong to groups and emotional constraints.
Boon (2005) concludes that the differences between regular managers and interim managers are based on temporariness and the reason why an interim manager is hired, namely that there is a problem. An interim manager is more independent when making changes and an interim manager is more focused on results (Boon, 2005: 113).
Difference between an interim manager and an organizational adviser. Boon (2005) found that interim management and organizational advisory have areas of agreement. The professions can be overlapping according to Boon (2005): ‘the remark that an interim manager acts or has to act partially in the role of an organizational advisor is mentioned in several interim management literature’ (Boon, 2005: 117).
Ramondt (2004) also distinguishes the interim manager from the organizational advisor. ‘Interim managers go one step further than consultants’ (Ramondt, 2004:4). Interim managers do not only advise organizations, but take the responsibility for the implementation of these advices. They combine the role of power and the role of a helping hand and work on a temporary basis. What separates interim managers from consultants is that they are also line managers and have accompanying power and responsibilities (Ramondt, 2004).
1.4 Choice of literature.
The previous section discussed the unique character of the interim manager and interim management. In an optimal situation only literature concerning interim management should be used.
Unfortunately, this is not possible because the amount of literature discussing interim management and specifically organizational change with the use of interim management is limited. Because interim management partially overlaps with the field of regular change management and organizational advise some regular organizational change literature is used to supplement the modest amount of literature about organizational change with the use of interim management. Whether the conclusions from regular organizational change literature are consistent with the specific interim management situation will be tested in the results and analysis part of this research.
1.5 Overview of study
In the next section theory about organizational change will be elaborated in order to answer sub question 1. Subsequently, the chosen variables and arguments for the choice of these specific variables are discussed. Next, for each variable an attempt is made to combine both the theories of interim management and organizational change. This theory section will provide several hypotheses which integrate the different sources of literature. In the research method section a short overview is given on the data collection methods and data analyses. In the results section the results of the conducted interviews and the results of
research are discussed and recommendations for further research and practical recommendations are presented.
2. THEORY
2.1 Definition of success.
In order to identify which factors will lead to a successful organizational change, success has to be defined.
In a dictionary success is defined as: ‘The achievement of something desired, planned, or attempted’ (http://www.thefreedictionary.com/success). For this research this definition has to be made more concrete. The degree of success of an organizational change can be determined by measuring to which degree the predefined goals of the change are being met at the end of the project (Cummings and Worley, 2004). Only, the predefined goals of the change that Cumming and Worley refer to, are not always defined at the start of an organizational change traject with the use of interim manager(s) (Banning & Klep, 1987).
Also, not all interests of the initiator are transparent which can result in a situation where the predetermined goals are met, but the initiator is not satisfied with the result because the ‘hidden’ goals of the project are not met (Banning & Klep, 1987).
Therefore, I will define success in a different way. The initiator of the project is the person with the highest decision making authority, his opinion will be the most important. Concluding, success is based on the opinion of the initiator of the project. The predefined goals of Cummings and Worley are translated into the satisfaction of the initiator according the completion of this goals. Some goals can be measured accurately, but other goals of the organizational change are subjective. Because of the above it is not possible to make an objective evaluation of success, therefore this method is used.
2.2 Success factors from regular change management literature.
The basis of organizational change with the use of interim managers is organizational change. I believe that organizational change with the use of interim managers is a specific form of organizational change because of the unique character of an interim manager and interim management, but the goal is the same. Therefore, I start with the comparison of success factors from regular change management.
In order to answer sub question one a short analysis of success factors in regular change management literature is made. Therefore, a framework from Leppitt (2006) is used. A comparative study was done on critical success factors in organizational change. All variables in the model have a positive relation to the degree of success of an organizational change. Results from several authors are combined which makes this framework a good starting point for this research.
Variable References
Leadership Nadler, 1982; Ulrich, 1998; Jick, 1991; Beer, Eisenstat & Spector, 1990;
Trompenaars and Wooliams, 2003
Sponsorship Boddy and Buchanan, 1992; Nadler, 1982; Jick, 1991
Setting the context Warner and Burke, 1994; Nadler, 1982; Jick, 1991; Beer e.a., 1990;
Urgency Kotter, 2002; Paton and McCalman, 2004; Warner and Burke, 1994; Jick, 1991
Clear vision and rationale
Kotter, 2002; Paton and McCalman, 2004; Boddy and Buchanan, 1992;
Nadler, 1982; Ulrich, 1998; Jick, 1991; Beer e.a., 1990; Trompenaars and Wooliams, 2003
Building consensus Paton and McCalman, 2004; Nadler, 1982; Ulrich, 1998; Jick, 1991; Beer e.a., 1990; Trompenaars and Wooliams, 2003
Communicating Kotter, 2002; Paton and McCalman, 2004; Warner and Burke, 1994; Nadler, 1982; Jick, 1991
Assessing organizational readiness
Paton and McCalman, 2004; Warner and Burke, 1994; Nadler, 1982; Jick, 1991; Trompenaars and Wooliams, 2003
Planning the change Paton and McCalman, 2004; Boddy and Buchanan, 1992; Warner and Burke, 1994; Nadler, 1982; Jick, 1991; Beer e.a., 1990; Trompenaars and Wooliams, 2003
Putting the resources in place to deliver
Kotter, 2002; Paton and McCalman, 2004; Ulrich, 1998
Clear empowerment and authority for team
Kotter, 2002
Change management structures and delivery
Paton and McCalman, 2004; Warner and Burke, 1994; Nadler, 1982; Ulrich, 1998; Jick, 1991; Trompenaars and Wooliams, 2003
Short term wins Kotter, 2002; Nadler, 1982; Trompenaars and Wooliams, 2003 Metrics, monitoring
and control
Kotter, 2002; Boddy and Buchanan, 1992; Warner and Burke, 1994; Ulrich, 1998; Beer e.a., 1990
Consolidating Kotter, 2002; Ulrich, 1998; Jick, 1991; Beer e.a., 1990
Table 1: Based on Leppitt (2006)
2.3 Specific organizational change success factors for interim management.
In the previous section a list of success factors derived from regular change management literature is presented. In the present interim management literature, a list of success factors like above is not available. Although several authors stress the importance of some factors, they are not presented as critical or explicit success factors.
Because no specific and consistent success factors for organizational change with the use of interim managers are identified in literature, the previous table is used as a starting point..
The list of possible success factors for interim management will be identified using the specific components of interim management that are described previously: temporariness, outsider effect and formal power and responsibilities. Boundary condition for the choice of variables is that the variable can be influenced by the interim manager.
The chosen variables are: leadership, sponsorship, building consensus, communication and consolidation. In the next section there will be an elaboration of why these factors are chosen as possible success factors.
Leadership. Leadership is chosen because the interim manager does not have an advising role but he is leading the change and is leading a part of the organization. Therefore, an interim manager has a large role in leading the organization and the organizational change which makes it likely to identify leadership as one of the possible success factors.
Leadership is a variable that can be defined in several ways; in order to limit the amount of variables, a selection is made. The chosen variables, based on the literature as explained in the next sections are: power and authorities, political skills and balancing the change of the organization and the continuation.
Power and authorities is chosen because according to Schriever (1983) and Boon and Devos (1993) formal power and authorities are important to create successful change. Ramondt (2004) and Boon (2005) state that formal authorities and responsibilities are the distinguishing factor between interim managers and organizational advisers. This research will investigate whether interim managers have formal power and responsibilities and whether this is important for the success of the project.
Political skills are selected because it is likely that there are different interests present in the organization which can affect the success of the project. The assumption is made that when an interim manager can influence the right people his is more likely to reach success (Ten Koppel & De Heer, 1996).
Balancing the change of the organization and the continuation is chosen because this is the basis of interim management. Kanter et al. (1994) and Reijniers (2002) display the importance and the difficulty of creating this balance which makes the variable interesting for this research.
Sponsorship. Sponsorship can be divided in sponsorship from senior management and sponsorship from informal leaders. The reason why sponsorship from senior management is identified as a variable is because an interim manager is an outsider to the client organization. The initiator is likely to be someone from senior management which makes this an important group in an organizational change (Wichard, 1994). Wichard (1994) summarized this by stating that sponsorship from senior management is needed to gain credibility and reliability.
Sponsorship from informal leaders is selected because we can relate this variable to the outsider effect that is previously discussed and to the double role an interim manager has. Because an interim manager also has a functional leading role he has close relationships upwards and downwards. A broader base of support is essential for success according to Nadler & Tuschman (1989), for an organization that
When the base of support is not present in the organization, the solutions from the interim manager are not consolidated because the people in the organization are not supporting these solutions. Informal leaders are especially important because they will influence the support of others in the organization (Peters &
O’Connor, 2001).
Building consensus. Building consensus and in particular sharing the vision and creating understanding is selected because it will generate stakeholders around a specific goal, it shows the desired actions to reach this goal and it directs energy towards this goal (Boddy & Buchanan, 1992; Mento, Jones &
Dirndorfer, 2002; Kotter, 2002). According to Ulrich (1982) a vision is needed to help employees understand the benefits of the change, to show the impact and how employees will be affected and to create energy and enthusiasm for the change. For an interim manager it is especially important to generate stakeholders around a predetermined goal, the vision, because he is an outsider which can create tensions (Banning & Klep, 1987). The interim manager is hired by usually one initiator who has its own interests (Ramondt, 2004). When the organization is not consistent about the vision of the organization it can be assumed that the interim manager can not have the benefits described by Ulrich (1982), Boddy & Buchanan (1992) Mento et. al. (2002) and Kotter (2002) which probably makes it more difficult to achieve a successful change.
Communication. The importance of communication in organizational change with the use of interim managers is described by Banning and Klep (1987), Van de Wiel, Ten Koppel & Glaser (1993) and Burger & Van Staveren (2002) who claim that the quality of an interim management project is largely dependent on the communication, and that one of the essential competences of an interim manager is to communicate properly. Communication can be divided into several sub variables like: content, timing, reducing rumours, communication medium and two way process (Lengle & Daft, 1988; Schweiger &
DeNisi, 1991; DiFonzo, Bordia and Rosnow, 1994; Kanter et al., 1994; Graetz, 2002).
The selected sub variable for this research is reducing rumours. Reason for this choice is that the interim manager has a double role in the organization (Ramondt, 2004) and has a lot of contact with his employees due to his functional managerial role (Reijniers, 2002). Rumours occur when there is a situation of uncertainty and anxiety (Schweiger & DeNisi, 1991; DiFonzo et al., 1994), these factors are often present in an organization that deals with organizational change (Kanter et al., 1994; Richardson & Denton, 1996). It can be assumed that an interim manager, as outsider, will create even more rumours. Because of the negative effects of rumours on the success of organizational change (Schweiger & DeNisi, 1991) reducing rumours by the interim manager seems an important variable.
Consolidation. Consolidation is chosen because of the temporary aspect of the interim manager.
The interim manager will leave the organization after a specific time period or when a specific result is achieved. In order for the organizational change to be successful, the change has to be consolidated (Banning & Klep, 1987; De Dreu, 1988; Burger & Van Staveren, 2002). For an interim manager consolidation seems even more important than for regular managers because the organization has to
proceed with the changes without the help of the interim manager. Consolidation can be divided into help from sponsors and consistency of successor.
Help from sponsors is discussed by Nadler & Tuschman (1989) who see sponsors as co-owners of the change. In this role sponsors can help consolidate the changes. Help from sponsors is especially important for interim managers because the sponsors are people from within the organization, who can help build support. Consolidating solutions that the sponsors agree upon create the feeling that the solutions are their own which helps consolidation of the long term changes that are achieved (Wichard, 1994).
Consistency of successor is selected because the interim manager has a temporary role in the organization, which has to be continued by his successor. According to Wichard (1994) consolidation is largely dependent on the successor of the interim manager. When the goals of the successor are consistent with the followed direction of the interim manager, this will counter-pressure old norms and values and can even create acceleration of the change process (Wichard, 1994).
The choices made above are subjective. The basis of the choices made is the literature that is mentioned considering the specific factors of interim management, success factors of organizational change in general and literature about interim management specifically. However, it is important to state that the although the choices are based on several scientific researches there is always some subjectivity in these choices. This list is not extensive but is needed to limit this research.
2.4 Elaboration on potential success factors
The selected potential success factors are elaborated using different sources of scientific literature.
The goal is to create hypotheses about the variables that will be tested in the next sections.
Leadership: Power and authorities. ‘No one can lead who does not first acquire power, and no leader can be great who does not know how to use power’ (Ravid, 2006: 47). This quote highlights the importance of power and authority in order to achieve an assignment.
In the definitions of interim management of Banning & Klep (1987), Wichard (1994) and Van der Togt (1994) in the introduction, the factors having power and formal responsibilities are considered important aspects of interim management. Wichard (1994) highlights the importance of formal power and responsibilities by stating that the interim manager can only be decisive and resolute when the interim manager has the required formal power in the organisation and is thus seen as a legitimate leader. Van ‘t Hof (2007) agrees and states that formal power consistent with the function is perceived as important to make decisions. Therefore making agreements about the level of power and authority is perceived as very important. According to Groenhof (2007) power and authorities are important for interim managers to have the freedom to act and make decisions.
Roos (1993) states that one of the most important mistakes concerning interim management is that the interim manager does have certain tasks and responsibilities, but does not have the power that should accompany these tasks and responsibilities.
Some authors disagree with this view and claim that formal power and authority is not that important as perceived (Ramondt, 2004; Boon, 2005). Ramondt (2004) claims that the partial lack of formal power does not affect the effectiveness of the interim manager. Although interim managers say that ‘their work is about power’ (Ramondt, 2004: 26) he believes that in some interim management assignments formal power has no significant meaning and therefore it is not a condition for success. Boon (2005) agrees with Ramondt (2004).
Leadership: Political skills. Correctly dealing with politics is an essential skill for an interim manager (Ten Koppel & De Heer, 1996). Politics is about dealing with interests, power and conflicts of different people. An interim manager will frequently deal with situations where a political game is played;
therefore it is important for an interim manager to understand the cohesion and tensions that are evolving in the organization (Ten Koppel & De Heer, 1996). For an interim manager it is important to know who supports him and to whom he should go for support, feedback and back-up for important decisions (Ten Koppel & De Heer, 1996).
When the interim manager is aware of the existing politics in the organization, it is important that he will use his expertise to deal with these political issues and that he will use this information and power in a way that is respectful and integer (Ten Koppel & De Heer, 1996).
The importance of political skills is also acknowledged by regular change management literature.
Political and influential skills are needed to identify potential coalitions and balancing conflicting goals and perceptions with others in the organization. Influential skills also have to be used to gain commitment for project plans and to convince possible sceptics and resisters of the change (Boddy & Buchanan, 1992).
Leadership: Balancing the change of the organization and the continuation. Creating a balance is especially important for interim managers, because this double responsibility is the reason why they are hired (Reijniers, 2002). It is important for interim managers to have a proper balance between continuing the organization and making changes in order to succeed (Reijniers, 2002).
Because an interim manager and a regular manager dealing with organizational change both have to find a balance between the continuation of the organization and changing it, some regular organizational change and management literature is added to this section: Kanter et al. (1994) describe this as being a magician, a manager have to juggle with different tasks in a gracious fashion.
Hypotheses. By reviewing the literature about the factors mentioned above, we can form several hypotheses which will be tested in the results section. The operational definitions of all hypotheses will be discussed in the summary of this section. Because the variables can not always be measured in an objective manner, this operational definition is used.
- Hypothesis 1a: when the interim manager has an appropriate level of power and authorities, the chance of success of the change is high.
- Hypothesis 1b: when the interim manager has political skills, the chance of success of the change is high.
- Hypothesis 1c: when the interim manager is able to combine continuing the organization and changing it, the chance of success of the change is high.
Sponsorship: Active and visible involvement and support from senior management. Creating support from senior management is a principal requirement according to Van ‘t Hof (2007). The power base of senior management is that large that an interim manager needs support from senior management to form an alliance in order to influence the rest of the organization (Van ‘t Hof, 2007). Visible support from senior management is important when decisions have to be made; when the senior management supports the decision of the interim manager the change is more likely to succeed (Groenhof, 2007).
Reijniers (2002) concludes that senior management in a change project involving interim management is one of the success factors of the project. Senior management is defined as the group that will have the ability to legitimate and sanction changes, they are the real decision makers. (Lack of) involvement and support from senior management is the reason why some changes will or will not be executed. Banning & Klep (1987) provide similar results; an interim manager can only make effective use of his power and authority when he is supported by the highest management. This support has to be visible by the entire organisation in order for the interim manager to gain credibility and reliability.
From regular organizational change literature we can conclude that senior management is important in order to create the right context for change, to create commitment in the whole organization and to create energy and momentum for the change in the long term. Senior management must be clearly identified with the project and must show its support of the organizational change to the entire organization. It is essential that this senior management is visible and tangible, to create the context for organizational change (Paton &
McCalman, 2000).
Graetz et al. (2002) support this by stating that in order for the change to be successful in the long term, a manager should have the support of senior management. No matter how driven and committed the manager is, is it impossible for an individual to maintain the energy and enthusiasm of all employees over long periods of time. (Graetz et al., 2002:249).
Sponsorship: Involvement and support from informal leaders. Van ‘t Hof (2007) performed research on informal leaders in organizational change projects and how the interim manager can use these informal leaders. He concluded that successful interim managers are looking consciously for persons that can become key players in this project. ‘Key players are people who can provide the interim manager with relevant information, have good ideas or who can carry out the message of the interim manager’ (Van ‘t Hof, 2007: 34). Key players are seen as independent thinkers who created the role of informal leader and can influence the process of organizational change by using this role. These persons can have a catalyzing function or can significantly hinder the change. The influence of these persons is perceived as very important to convince others of the benefits of the change (Golzen, 1992; Van ‘t Hof, 2007).
Banning and Klep (1987) state that sponsorship is important for an interim manager in order to succeed. An interim manager will surround himself with enthusiastic and capable people from different layers in the organization to help him with the implementation of the change and to consolidate the changes.
The identification of these informal leaders is done by using observation and conversations throughout the organization. The interim manager will use his intuition to identify the key players (Van ‘t Hof, 2007). Interim managers can stimulate these key players to become part of their team by for example giving them more attention, to involve them in the process and to give them more information then others (Van ‘t Hof, 2007).
Sponsorship from informal leaders is also discussed in regular organizational change studies. Peters
& O’Connor (2001) show that informal leaders have a great impact on an organizational change. When informal leaders are joined in the change, they will add their voice and influence to everything related to the change initiative. By using the unofficial hierarchical lines, informal leaders can exert their influence onto the organization.
The success of involving informal leaders is captured by a study of Rogers (1983) which showed that focusing your effort on the 5 to 10 percent of the population whose opinions are most valued by others (the informal leaders) will increase the speed of the change and increase the likelihood of success.
Hypotheses. By reviewing the literature about the factors mentioned above, we can form several hypotheses which will be tested in the results section.
- Hypothesis 2a: when senior management is actively and visible involved and supportive, the chance of success of the change is high.
- Hypothesis 2b: when informal leaders are involved and supportive, the chance of success of the change is high.
Building consensus: Understanding the vision: what, why, how and by whom. According to Van
‘t Hof (2007) communication with top management is important in order to reach agreement about the direction of the organization and the way to reach the goals of the organizational change.
Unfortunately, in literature about interim management building consensus and the understanding of the vision by the organization is not explained explicitly. Therefore, general change management is used.
Gathering the whole organization around one central vision is one of the ten commandments of successful organizational change (Kanter et al., 1994). In order for a change to be successful the whole organization must understand the vision and must be willing to act according to it. This understanding can only be created when the vision is not only an abstract goal, but a complete picture of the future. In this image of the future the what, why, how and by whom is visible to everyone in the organization which makes it possible to build consensus (Kanter et a., 1994). A shared vision will generate stakeholders around a specific goal, it shows the desired actions to reach this goal and it directs energy towards this goal (Boddy
& Buchanan, 1992; Mento et. al., 2002; Kotter, 2002). According to Ulrich (1982) a vision is needed to
help employees understand the benefits of the change, to show the impact and how employees will be affected and to create energy and enthusiasm for the change. This view is supported by Wissema, Messer &
Wijers (1996), Paton & McCalman (2000), Carnall (2003) and Gill (2003).
Hypotheses. The relation between building consensus and creating successful organization is explained above. The assumptions made that the benefits of a shared vision in regular change management will also be valid for interim management is tested by the following hypothesis.
- Hypothesis 3a: when the whole organization is aware and understands the vision explicitly, the chance of success of the change is high.
Communication: Reduce rumours. Rumours can be defined as: ‘Rumour is unverified information, usually of local or current interest, intended primarily for belief. Rumours are propositions of allegations coloured by various shades of doubt, because they are not accompanied by corroborative evidence’
(DiFonzo et al., 1994: 50). An example from regular change management explains that reducing uncertainty is the key to proper communication: ‘any failure to communicate leaves employees uncertain about their futures, and it is often that uncertainty, rather than the changes themselves, that is so stressful for employees’ (Schweiger & DeNisi, 1991: 110).
Unfortunately, the literature about interim management and communication is scarce. Although communication in general is discussed in for example Banning and Klep (1987), Van de Wiel et. al., (1993) and Burger and Van Staveren (2002) this literature is very general in their statements that communication is important for interim managers to reach a successful change. No specific actions or sub variables are mentioned in these literature sources. Therefore, I use some general change management literature to explain the effects of rumours for the success of organizational change.
Many authors agree on the negative effects of rumours in an organization (Kanter et al., 1994;
DiFonzo et al., 1994; Difonzo & Bordia, 1998) ‘Rumours can drain productivity, reduce profits, create stress in the workplace or sully a company’s image’ (DiFonzo et al., 1994: 47), specifically in an organizational change (Schweiger & DeNisi, 1991; Smeltzer, 1991; Smeltzer, 1992). According to Smeltzer (1991) the presence of inaccurate and negative rumours is the most commonly cited reason for failure of a change effort.
Rumours occur when there is a situation of uncertainty and anxiety (Schweiger & DeNisi, 1991;
DiFonzo et al., 1994), these factors are often present in an organization that deals with organizational change (Kanter et al., 1994; Richardson & Denton, 1996).
It seems reasonable that the situation of uncertainty and anxiety that is present in regular change situations is also likely to be similar in organizational change with the use of interim managers. Therefore, these sources are used and will be tested to proof whether this factor does have influence in the specific situation.
Hypotheses. I will test whether the specific element of communication, reducing rumours, is important in organizational change while using interim managers. This will result in the following hypothesis:
- Hypothesis 4a: when rumours are reduced, the chance of success of the change is high.
Consolidation: The help of sponsors. Interim managers believe that consolidation can only be assessed when the interim manager has left the organization, because the goal of consolidation is to create long lasting changes (Van ‘t Hof, 2007). Because of this situation, the departure of the interim manager before the changes are ‘set’ in the organization, sponsors are essential to consolidate changes (Van ‘t Hof, 2007).
Creating the help of sponsors is an important task of the interim manager during his assignment. It is important to create a team of good quality, who supports the changes actively in order to continue the changes after the interim manager leaves. Senior management must be able to take responsibility and to reach continuity in order to consolidate the change (Wichard, 1994; Van ‘t Hof, 2007).
The interim management literature about using sponsors to consolidate changes is mainly focused on senior management. But Groenhof (2007) concludes that both senior managers and informal leaders are important to consolidate change. Because informal leaders are key players in an organization, it is important that the changes are consolidated within this group because this group will be able to create movement in the entire organization. Wichard (1994) also believes it is important to generate help from sponsors in the form of senior management and informal leaders; it is important to involve members of the organization in resolving their problems, when people have the feeling that the solutions to the problems are their own the solutions will likely to be consolidated (Wichard, 1994).
In regular organization change literature sponsors in the form of senior management and informal leaders are also seen as an important help to consolidate changes. Kanter (1983) suggests that the identified sponsors can help to consolidate the changes. When foot-dragging from others occurs, sponsors can help the manager to get people back on board.
Kotter (2007) has a similar view, he believes consolidating change is both important and difficult.
‘Error: not anchoring changes in the corporate culture. Until new behaviours are rooted in social norms and shared values, they are subject to degradation as soon as the pressure for change is removed.’ (Kotter, 2007:
103). The interim manager leaving the organization can be seen as reduced pressure. To reduce this, it is important that sufficient time is taken ‘to make sure that the next generation of top management really does personify the new approach’ (Kotter, 2007: 103).
Consolidation: Consistency of successor. Consolidation is largely dependent on the successor due to the relatively short period that the interim manager is involved in the organization (Wichard, 1994; Van
‘t Hof, 2007). When the ideas of the new manager are inconsistent with the ideas of the interim manager, the old resistors will convince the new manager and things will return to the old way of doing things and the
changes disappear (Wichard, 1994). This is consistent with Banning and Klep (1987) who state that the chance that the change is not consolidated will become significantly higher when the vision of the successor is not consistent with the interim manager’s vision.
When the vision of the successor is consistent with that of the interim manager, this will counter- pressure old norms and values and can even create acceleration of the process (Wichard, 1994).
Regular management will always make the decision for a specific successor, but it is very important that the interim manager is involved in the selection process of his successor. When the interim manager is involved in the selection process of their successor they are likely to select on basis of needed competences, fit between this person, the function and the organization (Van ‘t Hof, 2007) and willingness to continue the direction and actions of the interim manager (Groenhof, 2007; Van ‘t Hof, 2007).
Hypotheses. The preliminary literature will be tested using the following hypotheses.
- Hypothesis 5a: when sponsors are used to consolidate the change, the chance of success of the change is high.
- Hypothesis 5b: when the successor is consistent with the needs of the organization after the change, the chance of success of the change is high.
Summary theory section. In order to increase the readability, a table is made which summarizes the previous theory section.
Variable Specified variable for this research
Hypotheses Operational definition
Success of the change
Satisfied initiator Hypothesis: the project is considered as a success when the initiator is satisfied.
The success is defined as a success when it scores a minimum of 3,1 out of 5 by the respondents.
Opinion of the initiator is multiplied by a factor two.
Leadership Power and authorities Hypothesis: when the interim manager has an appropriate level of power and authorities, the chance of success of the change is high.
The level of power and authorities is perceived as appropriate, when the interim manager thinks he has enough power and authority to perform his tasks.
Political tensions Hypothesis: when the interim manager has political skills, the chance of success of the change is high.
The political skills from the interim manager are perceived as high when he can influence the politic tensions within the organization according to the initiator and
organization members.
the continuation of the organization
interim manager is able to combine continuing the organization and changing it, the chance of success of the change is high.
continuing the organization and
changing is reached when the interim manager and the organization members perceive the balance as appropriate.
Sponsorship Sponsorship from senior management
Hypothesis: when senior management is actively and visible involved and
supportive, the chance of success of the change is high.
Senior management is actively and visible involved and supportive when the interim manager and the organization members state this.
Sponsorship from informal leaders
Hypothesis: when informal leaders are involved and
supportive, the chance of success of the change is high.
Informal leaders are involved and supportive when the interim manager and the initiator state this.
Building consensus
Understanding the vision:
what, why, how and by whom
Hypothesis: when the majority of the
organization was aware and understands the vision explicitly, the chance of success of the change is high.
The organization is aware of the vision and
understands this vision when the interim manager and organization
members state this.
Communication Reducing rumours Hypothesis: when rumours are reduced, the chance of success of the change is high.
Rumours are reduced when the interim manager and the organization members state this.
Consolidation Help of sponsors with consolidation
Hypothesis: when sponsors are used to consolidate the change, the chance of success of the change is high.
Sponsors are used to consolidate the change when the interim manager and organization
members state this.
Consistency of successor Hypothesis: when the successor is consistent with the needs of the organization after the change, the chance of success of the change is high.
The successor is
consistent with the needs of the organization after the change when the interim manager and organization members state this.
Table 2: Operational hypotheses and definitions
Conceptual framework. The theory above is presented in this conceptual framework. All
variables are assumed to have a positive effect on the success of a change initiative.
Formal power
Political skills
Balance
Sponsorship senior management
Sponsorship informal leaders
Building consensus:
vision
Reducing rumours
Consolidation with help of sponsors
Success
Consistent
successor
3. RESEARCH METHODS
3.1 Data collection
The hypotheses were tested in practice by using five cases from BLMC. The cases were selected based on three criteria:
- The projects in the cases occurred in the years 2006 until 2009, retrospective view.
- The cases had a change management focus.
- The cases had to present a clear representation between successful and unsuccessful cases; 2 unsuccessful cases and 3 successful cases were selected.
- One or more interim managers participated in these cases.
N successful 3
N unsuccessful 2
N total 5
The cases were chosen by the managing director of BLMC, who was involved in all the five cases.
He also made the initial distinction between successful and unsuccessful. Whether the other participants supported this view is tested during the interviews.
For each case a group of interviewees is selected which consisted of the responsible interim manager(s), the 1 or 2 members of BLMC who were directly involved in the project, and a minimum of 1 and a maximum of 4 members from the client company (always including the initiator) that were involved in the project. The interviews with the members of BLMC were only used for background information and were not used in the analysis part of this research to reduce the risk of biased answers.
The N of interviews per case is unfortunately not consistent for each case. This choice is made because there is a difference in the size of the cases, some were conducted by one interim manager and only the initiator of the project was involved where in other cases several interim managers and members of the client organization were involved. In order to create the most valuable data about each case it was necessary to speak to all the keyplayers in a project. A possible effect of this difference is that the outcomes of the interviews with more interviewees has more influence than the cases with a smaller N. This possible negative effect is resolved by first grouping the outcomes of the interviews into one case result and then combining the case results with each other to made a proper comparison.
Case N interviews
Case 1 10
Case 2 2
Case 3 2
Case 4 4
Case 5 2
The goal of these interviews was to provide different opinions and views on the factors leadership, sponsorship, building consensus, communication and consolidation and how these factors were presented in the projects of BLMC. The interviews are individually conducted. Anonymity was guaranteed to the interviewees by highlighting that their names will not be published. The interviews are conducted face-to- face, in a semi structured way in order to allow explanation of the questions and to be able to ask the respondent for more information about a certain answer (Lyles and Mitroff, 1980). A disadvantage using this technique is that the responses are based on reconstructed events, the answers derived from the interviews may have been different from events as they actually occurred (Lyles and Mitroff, 1980). All interviews were recorded and described word by word to reduce the chance of loss of data or transcription problems.
The interviews took 60-90 minutes. All the interviewees were asked the same questions that are placed in the appendix. In the appendix the questions are made specific for the interim managers, for the other interviewees the word u can be replaced by the interim manager.
Qualitative research is used to explain phenomena instead of testing existing literature. The use of case studies and qualitative interviews can describe factors in a specific setting to describe possible explanations for successful change (Baarda and de Goede, 2006). Because of the exploratory set up of this research qualitative research fits the needs of this research.
In order to test whether the hypothesis are valid for a larger population, an internet questionnaire is conducted. 8432 persons from the database from BLMC received a link to an internet questionnaire. 834 e- mail addresses were not valid. 100 people responded so the response rate is 1,3 %. An internet
questionnaire was used to generate a large pool of respondents in a short period of time. The questions are presented in the appendix. Unfortunately, the response rate is low but not unusually low with the use of internet questionnaires (Baarda and de Goede, 2006). A disadvantage of using internet questionnaires can be that results can be biased due to the non-representative nature of the internet population and the self- selection of participants In particular, bias can result from 1) the non-representative nature of the Internet population and 2) the self-selection of participants (volunteer effect) (Eysenbach, 2004).
Quantitative research is used in the second part of this research in order to test the results of our qualitative research, a combination of both qualitative and quantitative research expands the use of results (Baarda and de Goede, 2006).
3.2 Data analysis
This research combined quantitative and qualitative research. The qualitative results from the interviews are categorized and labelled. The qualitative results of the interviews are used to gain more understanding about the processes involving the factors. They were also used for the operational definition of the variables since it was not possible to objectively measure these variables. The fragments of the interviews are compared to understand how the interim manager has dealt with the factors and which
The results of the interviews with the members of BLMC were only used to generate the context of the cases and the respondents from BLMC were not asked about specific variables in order to reduce the risk of subjectivity. Therefore, their input is not used in the analysis part of this research.
In order to statistically analyse the interviews, the quotes about the variables are rated by the researcher in low, moderate and high which made dataset 1. Advantage of using this method is that the results of the interviews can be analysed by using statistics which creates more analysis opportunities.
Disadvantage of this method is that the researcher applied her analysing skills on the transfer of the data.
Although this is done with accuracy, it can be that the transfer is influenced by the bias of the researcher which makes the data less objective. Three tests were applied to this data: the Mann-Whitney U, Spearman’s rho and regression analysis. Mann-Whitney U was used to test if there is a significant difference between the successful and the unsuccessful group, Spearman’s rho to test whether there is a significant correlation between success and the variable, and regression to test whether it is possible to make a function that can describe a variable when the other variables are known.
In addition, a quantitative list of questions is presented to the interviewees where they had to score the amount of influence of each factor and the degree of success; dataset 2. These results are used in SPSS to generate contexts between the success of the change and the influence of a certain factor. Descriptive statistics were used to generate the mean of the variables and Mann Whitney U test was used to generate whether there is a significant difference in rating the amount of influence of the variables for the successful and unsuccessful group.
In order to specify whether the results from the interviews are valid for a larger population, the results from the internet questionnaire are used. The questions that are asked to the internet group can be separated into two parts. First, they are asked if they have experience with an organizational change with the use of interim managers and whether this was successful. Second, the respondents are asked to which degree they value the relative importance of the factors that are tested. Descriptive statistics were used to test whether the possible success factors are seen as important success factors by the internet group.
3.3 Short description of selected cases
Case 1: the client organization is a wholesaler in the retail industry. Decreasing sales had a signalling function, which led to the participation of five interim managers on strategic and tactic level of the organization. The interim managers were hired to increase efficiency for the logistic department of the organization.
Case 2: the client organization is the headquarters of an organization that produces beverages. The assignment was to set up a customer service center, one interim manager was hired as the leader of the project in order to change and prepare the organization for the new situation.
Case 3: the interim manager was assigned to this organization in order to create new policy for facility management and partially implement this policy. This assignment is combined with the day to day
management of the facility department. The merger of two housing corporation gave cause to this assignment.
Case 4: 3 interim managers were hired to increase production and logistics in a plant that produces beverages. 1 interim manager led one team of employees and was concentrating on the tactical level of management. The 2 other interim manager concentrated on the strategic management of the plant.
Case 5: the client organization was a wholesaler in the food and beverages industry. The interim manager was hired to manage part of the warehouse and to change the way people worked in order to increase the cohesion among individuals and departments to increase the output and reduce errors.
4. RESULTS
4.1 Results from interviews
The interviewees were asked to indicate the degree of success of their project by rating success from 1 to 5. The possible scores ranged from 1: very unsuccessful to 5: very successful. Average grades from 1,0 to 3,0 will be reported as unsuccessful, average grades 3,1 to 5,0 will be reported as successful.
Because the opinion of the initiator is the most important aspect to define success, see theory section, the grade of the initiator will be multiplied by factor two. As a result, 2 cases can be highlighted as unsuccessful, and 3 cases as successful.
Case Means of success ranging 1 to 5 Successful/ unsuccessful
1 2,4 Unsuccessful
2 4,0 Successful
3 3,0 Unsuccessful
4 4,8 Successful
5 4,7 Successful
The quotes will highlight the specific sentences that are summarizing the interviews. In order to preserve anonymity, no names will be used. Reference will be made by the remarks IM for interim manager, IN for initiator and OM for organization member. Numbers will be used to separate the different cases and symbols like a, b, c etcetera will be used if more then one person of each type was questioned.
Variable Successful Unsuccessful
Leadership:
Power and authorities.
IN 2a: ‘The IM used his informal power rather than his formal power.
An IM should convince people and not rely on formal agreements. If formal power was enforced upon people, this project would not have been a success.’
IM 4a: ‘I did have all the means to make this project successful; this is one of the reasons why improvements took place.’
IN 4a: ‘The IMs did get the proper power and authorities, when you support something you should give people all resources to achieve this goal.’
IM 1d: ‘I did have enough power and responsibilities to do my job but the director was still responsible for the whole department.’
OM 1a: ‘Although the interim managers had power, the board of directors made the final decision.’
IM 3a: ‘I needed power and authorities to do my job properly because I was
responsible for these tasks. During my assignment it became clear that I did not have the proper authority and that I could not do the things that were necessary to reach success.’
