Trade and Transport Facilitation in Southeast Europe Program
INSTITUTIONAL ANALYSIS:
An Approach to Change Management
Discussion Paper No. 2
September 2000
P. W. Moeller
Trade and Transport Facilitation in Southeast Europe Program
INSTITUTIONAL ANALYSIS:
An Approach to Change Management
Discussion Paper No. 2
I.
INTRODUCTION
1.1
The willingness of the World Bank to provide credit/loan support for physical
investments at selected border crossing points in the Southeast Europe Region was based
on the concurrence by all parties that such investment was to be matched with changes in
the processes and procedures followed by the Customs organizations in the region. In
fact most of the Customs organizations in the region had initiated various degrees of
reform programs often keyed to guidelines and assistance offered by the European Union.
The need for change was also reflected in the surveys of stakeholders conducted by the
World Bank (See Discussion Paper No.1).
1.2
The idea that there was a need to introduce change in the sector and that it should
be done on a regional basis was the cornerstone for the creation of the Regional Steering
Committee (RSC). The Memorandum of Understanding establishing the RSC places
special emphasis on the role of the RSC in reviewing of obstacles and delays to trade and
transit and the sharing information so that appropriate actions can collaboratively be
implemented.
1.3
Experience has shown that it is far easier to agree to the need for change than to
successfully implement the change process. The discussion here is intended to provide a
basic overview of the change management process. The objective is to make Customs
more comfortable with the management issues related to change and to give an
understanding of the type of technical assistance that can be provided in support of the
change management process. The level of detail here can but be limited, but the topics
presented can be subjects for further discussion and assistance.
II
BREAKTHORUGH: IN TERMS OF ATTITUDES
2.1
Among the first classical works on change management was a work written by
Joseph Juran 1 in which change was presented as the breaking out of a past condition or
situation and the breaking through into a new one. Juran speaks of the transition process
as “breakthrough.” The discussion here relies heavily on this concept breakthrough in
change management.
1
See Joseph M. Juran, Managerial Breakthrough, McGraw Hill, 1964.
1
2.2
It is not surprising that the introduction of change encounters resistance. Unless
individuals are highly negatively affected by a current situation they usually prefer to
keep things the way they are. For some people even keeping a bad system is preferred
over the uncertainty of what the new one will mean for them.
2.3
The reaction of individuals to change in an organizational setting, Juran observed,
is related to two dimensions: (i) the first is the personality structure of the individual and
(ii) the second relates to the overall organization culture. In both cases we are talking
about changes in attitudes and associated behavior, two very difficult things to change in
individuals as well as in organizations. For the time being, let us talk about individual
personalities and defer the discussion of organization culture until later.
2.4
Experience has shown that individuals can be grouped in three separate categories
according to the attitude they have about the introduction of change. What can we say
about these groups?

Innovators: There is usually a small group of innovators in any organization
that is eager to see change. Such individuals value change and are willing to
take risks. They are the individuals convinced that “any change will be better
than what exists now.” Sometimes they see change as a means of advancing
themselves the role they play in the organization, or their profession. They
are not a unified groups and have different motives. They can be a catalyst for
supporting change, but they can also be too aggressive and leave most other
members of an organization uncomfortable with the idea of the change they
would support.

Conservatives: The conservatives are neither for nor against change as such,
but they are interest in results. In fact they want to see results or proof before
they are willing to move ahead with change. Such individuals represent the
vast majority of any organization. Logical reasoning may not win this type of
individual over; seeing that change is good because other real benefits,
however, will convince them of the advantage of change.

Inhibitors: The inhibitors, again, represent a small group within any
organization They have very negative perspectives about any proposals for
change. When presented with logical arguments of the advantage of change,
they will seek to discredit the logic or even avoid participation in the
discussion.
2.5
Efforts to introduce change require the recognition of the different roles these
groups play in the acceptance of change and the need to have varied strategies for dealing
with the respective groups. Particular consideration needs to be given to the personality
dimensions, following this typology, of the key managers in any organization and
whether they will be supporters or detractors of the change process.
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2.6
There are also general considerations for both senior and mid-level management,
in supporting attitude change necessary for the introduction of change, for example, see
Exhibit 1.
Exhibit 1
Sample Management Actions in Support of Attitude Change
Top Management Needs to:
 clarify the organization’s policy about proposed change
 set examples by following the policy in a highly visible fashion
 support the preparation of written objectives and plans for reaching the policy
 ensure that organization incentives support the introduction and acceptance of the
proposed change
Mid-Level Management Need to :
 to ensure that there are regular channels for the flow or ideas and reactions
 set the example by personal participation in the change process
 ensure that the tools and instruments needed for the introduction of the change are
in place; this often requires the development of a training program
 provide reinforcement and rewards for support by staff of the change process
III.
BREAKTHROUGH IN KNOWLEDGE
3.1
Classical management theory specifies three steps relative to knowlegde and the
introduction of change:



There needs to be a discovery or availability of new knowledge or information;
There needs to be a dissemination of this knowledge to those who can use it; and
There needs to be an application of the new knowledge to the solution of existing
problems.
Although these three steps are important individually, their importance comes most fully
when they are seen as a related process.
3.2
Within the TTFSE the pilot sites and the performance indicators will be playing a
major role in providing new information to management. These mechanisms are central
to the change management process of the TTFSE Program. The success of these
mechanisms, however, will be dependent upon both the related dissemination and
application steps. (See TTFSE Manual on Pilot Sites and Performance Indicators).
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IV.
BREAKTHROUGH AS A RESULT OF TEAM DIRECTION
4.1
Achieving breakthrough in the introduction of change is almost always the result
of team effort. At the larger organization level this takes place through the establishment
of a task force representing the different sections or units of the organization; this group
is often referred to as the change management steering committee of the organization.
Underneath the umbrella of this group are usually other task forces focused on either
functional or administrative issues. This interlocking cluster of steering mechanisms
provides for the implementation of the overall Strategic Plan and the associated Action
Plan adopted by the organization (See Exhibit 1).
4.2
In setting up the steering committee there are several requirements:
Leadership: Any group tasked with change should be established by the top
leadership of the organization with a clear indication of support by top
management for the change to take place (this should be reflected in the
organizational policy statement).
Terms of Reference: The steering committee needs to have a clear set of terms of
reference for the responsibilities and powers of the Steering Committee.
Appointment of Membership: The composition of the steering committee is
especially important in relation to the extent of change involved. If only one
section of an organization is involved, or if change is to take place at only one
level, then greater inclusion of representatives of these areas needs to be made.
All parties associated with the change process under consideration need to be
represented in one way or another. The use of subsidiary task forces is extremely
useful in breaking down issues in clusters and ensuring that those most useful in
supporting the change are involved.
Trainers or advisors on Change Management, or on some aspect of the change to
be introduced, may be required on a permanent or temporary/ad hoc basis.
Agreement on Internal Machinery and Operations: Such a group needs both rules
and structures to help its deliberation. In addition to the terms of reference of the
group, there needs to be a clear written understanding about: the duties of the
chairman, sectary and the members; how agendas are to be prepared; and the
maintenance of minutes.
4.3
The steering committee may need to initially assist in preparing the strategic plan
for change for an organization. If the plan has already been prepared, members selected
for the steering committee should have been involved in the preparation of the strategic
plan.
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Exhibit 2
KEY ELEMENTS IN CHANGE MANAGEMENT STRUCTURE
Change
Management
Strategy and
Action Plan
▼
Organizational
Policy Statement
▼
▼
Change Management Steering Committee
Information
Source
►◄
▼
▲
Vertical and
Horizontal
Communication
Links
▼
▲
▲
Task Forces
►◄
►◄
Monitoring
and Control
Mechanisms
▲
Task Forces
►◄
Task Forces
▲
▲
▲
Training
Process
Consultation
Other
Technical
Assistance
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V.
BREAKTHROUGH REQUIRES PARTICIPATION AND FEEDBACK
5.1
The success of change management is very much a function of the degree of
participation in the overall process led by the Steering Committee and Task Forces. This
process not only allows for the exchange of ideas and insights relevant to successful
implement of change that may have been overlooked by management but also provides a
sense of ownership on the part of the staff of the organization in the process underway. It
is crucial that the communication mechanisms established provide for vertical and
horizontal communication.
5.2
In some cases organizations develop a newsletter that is shared with the staff on
the change process, often documenting progress or effectiveness through the use of data.
Sometimes this information is also targeted to the public through the public relations
program of the organization. Since the results of the impact of change on users of the
services of an organization is important in evaluating the effectiveness of the change,
users are sometimes included in some of the focus groups or are separately interviewed or
surveyed.
5.2
Feedback is also a vital change management mechanism sometimes indicating
that the original expectations relative to the introduction of change must be adjusted or
must be addressed from a different perspective. Change management, like all
institutional development, is in may respects an iterative process in which management
must sometimes recast its efforts of shift its emphasis.
VI.
RESISTANCE TO CHANGE
6.1
Although resistance to change is partially a function of individual personality
types, it is also very much related to the culture of an organization. Just as one can speak
of a national culture in any country, so too can one speak of an organizational culture
composed of learned behaviors and a collection of beliefs, values, habits, practice and
traditions shared by the members of the organization. Usually there is a high level of
congruence between the culture of an organization and the larger national culture, but
there are numerous examples of organizations with very distinct cultures.
6.2
Efforts to introduce change within any organization need to be considered within
the context of the culture of that organization. One needs to understand the culture of the
organization, a task that is often difficult for external consultants. The situation is
complicated by that fact that there are both formal and informal cultures in an
organization. Sometimes the informal culture even overrides the formal culture in
determining behavior.
6.3
The work place is a very important part of the social and culture life of
individuals. The culture of an organization defines diverse activities, providing codes of
conduct and expectations. For example what is the range of minimum and maximum
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output for individuals performing in different positions, what rules exist concerning
communications and relations with supervisors, what actions are considered violations of
the ethics of the organization, what are the guidelines for punishment or reprimands?
6.4
Within the content of organization culture, it is important to remember that
change requires two steps: first, unlearning old habit, attitudes, and beliefs; and secondly,
learning new one. Unlearning often requires that the members of an organization
consider the history of a belief and care enable to see that although once well founded it
has become obsolete as a result of a change in the times. Learning to do things in a
different way can be facilitated by attaching some form of satisfaction to the learning.
Sometimes this is praise or approval, or it can be increased status, a sense of belonging to
the new professional culture of change, or material rewards including incentives. The
training that is often a pre-requisite for change can also be an inducement to support the
change process.
VII.
DIAGNOSTIC FEEDBACK, CONTROL, AND MONITORING
7.1
In order to judge the extent to which progress is being made as well as to
determine the effectiveness and desirability of the change being implemented, it is
necessary to have data that gives an analytical overview to what is happening. Setting up
diagnostic mechanism is an important part of change management. It is important that
the information is organized and presented in a way that is useful to the respective levels
of management. In the TTFSE the performance indicators are intended to serve this
purposes in terms of the larger context of change, but individual Customs organizations
may find it useful to have supplemental information made available to management.
7.2
The use of such diagnostic mechanisms is vital to the control and use of resources
and the monitoring and measurement of what is being achieved. Organizations may use
broad based or fine tuned benchmarks to monitor activities. These are often developed
on a comparative basis looking at the achievement of other organizations providing the
same services. Comparative review will be one of the key functions of the Regional
Steering Committee of the TTFSE Program.
VIII. TECHNICAL ASSISTANCE OPTIONS
8.1
Having provided the overarching structure for change management, how can the
SECI/TTFSE Team further assist the various Customs organization in the implementation
of their Strategic Plans? Following consultation with each Customs Organizations,
technical assistance packages can be prepared to assist the specific concerns of each
organization. A sample of the types of technical assistance available is provided in
Exhibit 3.
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Exhibit 3
Sample Categories of Technical Assistance in Support of Change Management,
Human Resources Development, and Professionalism

ORGANIZATIONAL CULTURE/PROFESSIONAL ETHICS - Development of a
positive and innovative culture; encouraging communication and innovation; definition
of standards of conduct and accountability; establishing good governance practices

GENERAL MANAGEMENT - Evaluation of management techniques and
methodologies to ensure clear, concise decision making, effective communication of
management objectives, problem resolution, and efficient administration

PROCESS FACILITATION FOR CHANGE MANAGEMENT - Assistance with
development of task forces and other mechanisms in support of change management

OPERATIONAL SYSTEMS - Creation of clear mission objectives and supporting
procedures and strategies with systems of measurement and goal setting

COMPENSATION PACKAGE - Development of career path options with salary and
non-salary incentives to attain specific performance achievement and
Professionalism; development of a meaningful personnel appraisement mechanism

RECRUITMENT AND PERSONNEL SYSTEMS - Creation of specific hiring
standards with a comprehensive pre-employment assessment of applicants; upgrading or
modifying staffing systems to meet such specific objectives as performance criteria

TRAINING – Development of general and specialist training mechanisms at the
national level, complete with testing and evaluation procedures; use of
training as a means of measuring ability for advancement against specific
career paths

ENFORCEMENT/INTERNAL AUDIT - Development of effective enforcement and
audit capabilities, to include recommendations for adequate legal authority,
clear mission statements, means of measurement, essential training, career
path advancement, and recognition

PUBLIC RELATIONS - Creation of specific initiatives to inform the general
and importing public of the missions and accomplishments of Customs; establishment
of a routine dialogue with the business community to resolve issues,
discuss ideas and processes, and promote a positive environment with
meaningful communication with various client and user groups
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