Managing Operational Risk in Financial Markets

Resistance to change

While the above list identifies the major generic drivers for

change, the strength of the various drivers will vary from organi-

zation to organization. The challenges of adapting existing busi-

ness environments to the new model are likely to be unique for

each situation. Many challenges face organizations embarking on

this change; these include cultural issues, technological problems

and organizational inertia. The changes are often met with inher-

ent resistance from those reluctant or unwilling to change. There

can be many sources of resistance for the proposed change,

including individuals, teams, departments and the organization

itself. The resistance can manifest itself overtly through industrial

action or covertly through lack of motivation, low morale,

increased absenteeism, etc. The major reasons for resistance to

change include:

•

There is a substantial requirement for additional resources

during a period of change. These may include financial

resources, time or special expertise or skills. Lack of adequate

resources can be a major resistance to change.

•

Any change in the workplace carries an element of un-

certainty. This brings fear about job losses, loss of earnings,

loss of status, or even loss of familiar surroundings.

This fear of the unknown can affect individuals at all

levels of the organization. However, if there is resistance from

the senior management, then the process of change is likely to

be difficult.

•

Those in positions of power and influence in the organization

may see change as a potential threat to their position.

•

All organizations have a certain amount of cohesiveness and

stability in order to function properly. This in turn leads to the

establishment of roles, procedures and processes. This can be a

powerful source of resistance within the organization. Highly

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Resistance to change

159

bureaucratic and hierarchical organizations offer a greater level

of resistance than more federal and devolved organizations.

•

An organization with a high level of fixed investment in exist-

ing infrastructure is likely to experience greater resistance to

change.

Introducing change in an organization can be extremely difficult

and complex. There needs to a clear strategy for where the organ-

ization is going. The management must create a new vision and

initiate the change procedures and processes to deliver the

required change. The approach required for establishing a suc-

cessful change management project is likely to be different for

each specific organization. However, there are a number of criti-

cal success factors common to all environments:

•

There needs to be an alignment of the new vision to corporate

strategy and business objectives.

•

There should be clear commitment from the senior manage-

ment. The change management project needs to be driven from

board level.

•

There is a requirement to involve and educate as many people

as possible.

•

During the transition period, there is likely to be a need for

additional support activity to allay people’s fears.

•

The implementation of change needs to be managed like any

other project with clear definition of objectives, scope of work,

critical success factors, and the role of individuals.

•

Ensure that there is adequate education and communication

and that there is effective knowledge transfer to the key

players.

•

At all stages measure, demonstrate and communicate the

progress which has been made.

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