Our society is constantly attempting to cope with the economic, political, psychological, and organizational pressures of change.

Few businesses are in greater transition because of these pressures than banks, where a change in management skills has become necessary for survival.

However, implementing and managing organizational change demands a level of expertise that is not readily found in many banks.

Managing the inevitable stress of change is a prerequisite for organizational growth. Unfortunately, many bankers that need to make adjustments too often develop a crisis approach in making these changes.

Taking the Right Approach

To avoid mistakes in terms of excessive costs, failed efforts, avoidable personnel, customer and market problems, as well negative credibility, management needs to know, the impact that major change efforts will have on their organizations.

Change is disruptive, and internal and external dynamics generate organizational stress resulting in confusion and frustration. Today, bankers are:

* Complying and struggling with government regulations and legislative changes, such as the Community Reinvestment Act.

* Responding to the consolidation of the industry and resulting competitive changes.

* Becoming more customer-service oriented.

* Implementing "total quality management," "continuous quality improvement," or customer relationship-building programs.

* lncreasing output capacity by installing productivity improvement programs.

* Adapting to fluctuations the economy.

* Adjusting to the changing profiles and needs of today's employees and management.

* Adjusting to the changing profile and needs of today's customers.

* Initiating major acquisition or reorganization plans.

* Increasing the use of computerized information systems, communications, and office automation technology.

* Integrating new diversified personnel through selected recruitment efforts.

* Redefining an organization's culture to be more supportive of the banker's service objectives.

* Incorporating new approaches and procedures resulting from technological breakthroughs.

* Establishing or reducing products and services.

Beyond Saturation Point

Organizations can absorb only so much change over a given period of time. There is a saturation point beyond which a person or organization cannot effectively deal with change.

Hostility, apathy, low morale, absenteeism, tardiness, defensiveness, anxiety, poor or no communication. and lower productivity are examples or symptoms of saturation.

Unfortunately, too many bankers involved in organizational change activities know very little about what change is, how it is developed, what must be done to prepare for it, and how to manage it.

Establish a Direction

To begin to achieve its objectives, management must determine the vision and direction of the bank. The banker's vision is not the banker's mission. The mission of an organization should reflect its purpose or reason for being.

The vision of an organization should reflect its aspirations, and should inspire its employees to strive to achieve the "common construct" it articulates.

This vision, as well as related goals and strategies, will serve as a foundation for specific action plans and tactics leading to improved efficiency, effectiveness, service, And employee and customer satisfaction.

The "common construct" will also serve as the standard for organizational direction that change advocates must meet to secure sponsorship for recommended change.

Maintain a Focus

Management must begin by facilitating a strategic thinking and educational process for leadership and management. The process should be designed to provide an enlightened and focused approach, while allowing increased opportunity for staff "buy in."

The process should also include an educational program to understand the key elements of managing change, and the implementation of major initiatives within the organization.

The components of the strategic thinking process should include:

* Creating a a vision ( or revisiting the existing vision) to determine how management wants to be positioned in a market increasingly characterized and dominated by an aging and evolving population.

* Developing goals (or revisiting existing goals) to chart the direction for the bank, while assuring appropriate use of resources and minimal conflict with existing operations and initiatives.

* Developing strategies (or revisiting existing strategies) to achieve designated goals, and to appropriately position the bank in the marketplace.

* Prioritizing goals and strategies.

* Identifying the means for measuring success.

* Creation of time-bounded and measurable action plans to implement the strategies of the organization.

* Creation of tools to successfully implement major change.

Commitment Is Key

Once major change is identified through the strategic thinking process, the next step is to gain commitment from the targets of the change contemplated. And commitment is key to success.

The greater the change contemplated, the greater the necessary commitment to the effort, and the more resources, like time, money, personnel, endurance, self-control, energy, and ingenuity, must be invested to achieve the desired outcome.

Management must understand the need for the creation of a compelling case for sustained major change to occur. Creating a compelling case demands the creation of pain, that is, information so compelling that remaining in the "status quo" will be clearly less attractive than moving to the change advocated.

Part of a Process

Major organizational change can be characterized as significant alterations in established patterns or expectations. Change is a process - the movement from the status quo through a transition to the desired end.

Several skills are needed to respond appropriately to organizational change. There is a need to understand the dynamics of change, and the organization must be able to effectively deal with ambiguity.

Management must develop an adaptability to respond to constant transition, and create strategies for overall goal achievement.

Overhead Costs

There is always a price to pay when implementing major change. The manager of the process must allocate the appropriate financial, human, material, political, and logistical resources to the effort. It requires energy, communications, and participation of the targets in the change process.

If the process is not managed well early, management may pay the price on the back end by suffering the consequences of employee and customer dissatisfaction, low moral, absenteeism, low productivity, sabotage. damaged image, and poor service.

There is no simple formula. except hard work. However. bankers who adopt the right change-management approach will significantly increase their chances for success.

Mr. Gilman is president and founder of Coming of Age Inc., Ellyn, Ill., a bank consulting firm.

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