When people talk about organizational change, they’re referring to major shifts in how a company operates, its methods, structures, technologies, or strategies. Significant changes like these aren’t just one-and-done; they have lasting ramifications and impact the employees in different ways. Because of that, it’s important to consider how potential changes may impact your organization.
Change Impacts a Local Paving Company’s Journey
Many of you may have heard of Albany-based local paving contractor Tom Anderson, manager of Perfect Pave. In 2017, Tom’s team went through a large organizational change when they shifted from solely residential work to taking on commercial paving projects as well. Although the change may seem minor, it had a big impact on the budget, profitability of the business, and the employees.
Residential paving equipment ranges from a few hundred dollars to a couple thousand, which the company can make back in a few days. But, when a paving contractor decides to take on commercial work, it comes with a laundry list of fees and expenses that NYS requires. After paying a few hundred bucks for proper licensing in New York, Perfect Pave had to purchase commercial steam rollers, which weigh in excess of 40,000 pounds and cost more than $150,000 each.
From the employees’ perspective, the company’s financial health comes into question when large expenses arise. Employees begin to wonder how the company can possibly afford to pay for it and still pay all of its employees. It does help that transactions are made in cash, which saves money on credit card fees and taxes. In Perfect Pave’s case, the paving contractors started to question the security of their roles and look elsewhere for employment as a back-up plan in case something were to happen. When Tom discovered this, he called our team.
The first thing we identified was the need for better communication and an organizational change plan. Because we were already behind schedule, we started by calling all the employees together to explain the shift in business. Tom stood in front of everyone and explained the addition of commercial projects, the reason behind it, and also touched on the financial health of the company. Then, Tom opened the to a barrage of questions during a lengthy Q&A session. From that point, we recommended that Tom provide his employees with a weekly status update of how the transition was going.
Overall, Perfect Pave’s change was a success. However, the lesson to be learned here is that organizational change needs to be planned. Identify possible changes that affect the company and its employees and plan a strategy for how to manage that change as it progresses, including a communication plan to keep employees in the loop.