In developing a human capital strategy for an organization there are four key pillars that should be included: knowledge management, performance management, competency management, and change management. Change is inevitable for any organization, and learning how to cope with change is crucial for producing high-performing entities. When introducing a strategic human capital plan for an organization, change management needs to be a key component of this plan. Developing a change management program as part of the human capital strategy is not an easy task. As Dianne Waddell and Amrik Sohal of Monash University write in their article, "Resistance: A Constructive Tool for Change Management" (Management Decision, vol. 36, no. 8, 2001), one-half to two-thirds of all major corporate change programs fail. Waddell and Sohal feel that "resistance" is often cited as a key contributor to change failure, but they believe that resistance may be an ally to assist the change effort. They indicate that in an organizational setting, resistance is an expression of reservation that normally arises as a response to change. They point out some management implications to consider when encountering resistance (http://www.managementfirst.com/articles):
Resistance may not be the enemy: it is much more complex than it may first appear. Make sure that you fully understand the reasons why it exists in your situation, and persevere in your attempts to get to the bottom of those reasons.
If your workplace is marked by passivity or apathy, implementing change may be a difficult task.
Encourage true participation in change: involve employees and allow them the opportunity to give feedback.
In developing a human capital strategy, there will invariably be changes in structures, processes, goals, activities, competencies, performance elements, and the like. Some believe that resistance to change is actually part of a seven-stage psychological adaptation sequence (http://www.managementfirst.com/articles):
Discovery: I've heard a rumor ... is it true?
Denial: It doesn't affect me.
Passive resistance: I won't do anything to assist the change.
Active resistance: I'll actively sabotage the change.
Exploration: Let's try small steps in the new way of working.
Commitment: This is great; let's have more.
Broadcast: Let me tell you about this great new process.
According to ManagementFirst members, the key to successfully managing change is to effectively handle the transition between stages 4 and 5. Additionally, focus on the organization's mission and core competencies are important elements in successful change. One example that exhibits organizational change involves the Los Alamos National Laboratory. As the Cold War ended and the need for the development of nuclear weapons has been reduced, the mission of Los Alamos has had to change. According to Richard Ringer and Kelly Strong's article "Managerial Perceptions of Change at a National Laboratory" in Leadership and Organization Development Journal (vol. 19, no. 1, 1998), the guiding principle for Los Alamos' new mission was to become a customer-focused organization that builds on historical strengths in science and technology. A restructuring of the Laboratory took place, and employees wanted answers to questions such as "why are we reorganizing?" Part of the difficulty was the failure of management to take the necessary time to fully develop a shared sense of the new mission and common vision for the organization. As Ringer and Strong point out, perhaps a "form follows function" perspective should have been taken, whereby emphasis should have been put on working out the vision and mission issues and then trying to figure out how work gets done at Los Alamos. Certainly, the Human Resources Department had some significant challenges in dealing with training and development needs, implementation of new personnel policies and procedures, and addressing employee concerns and fears. Performance-based appraisals and employee empowerment brought in by the change plan were new human resources practices at Los Alamos.
Let's take a look how change management plays a role in knowledge management, and then see how knowledge management can facilitate change management in terms of developing and implementing a human capital strategy.