Why Change?

"Life used to be so simple"; this is specifically true with Manila Electric Company
(MERALCO). Although there are about 139 electrical distributors in the
Philippines, MERALCO enjoys its status as a virtual monopoly on electrical
distribution in the Philippines. Consider the following facts: in 1998 MERALCO
maintained its position as the second biggest firm in the Philippines in terms of
gross revenues. It accounted for 23.1 billion kilowatt-hours or 62 percent of the
total energy of the entire country. Although its franchise area is equivalent to only
three percent of the Philippines' total land area, it produces 49 percent of gross
domestic product (GDP).

So why change when things are going right for you? We all know that everyone
of us is facing the facts of life about change. We know that it is everywhere, it is
constantly present and its pace is accelerating. It is all around us in the seasons,
social environment and biological process. The very first breath we took depends
on the ability to adapt from one to another that is dramatically different.

Forces for Change

Organizations are also encountering a wide variety of dramatic changes. Some
are faced with regulation from the government, others experienced deregulation
on their turf, some find their market share dwindling down while others find
themselves head-to-head with global competition. In fact many organizations
have experienced mergers or hostile takeovers, producing nerve wracking
psychological and economic effects on employees.

Take the case of the telecommunications industry in the Philippines some years
ago. Before, customers are literally begging the Telephone Company for
connections. With the recent deregulation of the telecommunications industry,
customers can now choose from the many companies, which they think suit their
best needs. Now comes the imminent deregulation of the electrical industry, truly
we can say that MERALCO could not afford to be complacent in doing business.
It has foreseen that there is a need to implement major changes in order to stay
competitive. Not only did it implement changes on processes that are considered
inefficient but also made a bold move to change everything. This includes the
redefining of the corporate culture of the company. With these recent
developments we can say that in order to survive it is not a question of whether
to change or not, but when and how to implement the necessary changes
effectively.

Resistance to Change
Change affects everyone. In so doing, it is natural to wish that the current
changes never happened, but we cannot wish them away so what normally
follows is resistance to change. Resistance in itself is neither good nor bad. It is a
natural reaction to change, but the success of any change efforts hinges on how
well this resistance is managed and transformed into support. It is very important
to characterize the forms of resistance before attempting to manage it. The three
forms of resistance are:

• Logical Resistance - also called as the rational resistance. This resistance

arises from the need for time and effort to adjust to change being
implemented. Also, included here is resistance due to the perceived
technical incorrectness of the system.
• Psychological Resistance - this is based on sentiments, emotions and
attitudes. This arises from the classical fear of the unknown. Also, this
type of resistance arises when employees feel that their security or self-
esteem is threatened. Although management feels that this type of
resistance is irrational and would have no justification, they should deal
with this and manage it properly.
• Sociological Resistance - also called resistance due to group interests.
This resistance arises due to the social values of people involved where
they perceived that their group interests are threatened. This type of
resistance should also be considered since group values are powerful
forces. Resistance encountered with this type causes a lot of nuisance
during implementation.

AM/FM/GIS Project

Implementation
As MERALCO saw the need to institute changes, it envisioned different
corporate programs that would improve the efficiency and quality of service. One
of these projects is the implementation of an AM/FM/GIS system. As early as
1992 the company had embarked on an AM/FM/GIS project in a pilot area
system implementation, it didn't materialize because of time and cost constraints.
But in 1995 our mapping team decided to automate the primary maps using an
incremental approach. Gradual transfer from a manual procedure to an
automated one proved to be very beneficial. Using this approach we have
prioritized which key areas should be automated first thus, lessening the
complexity of its implementation. This lessened the impact on operational
matters, particularly on our internal customers who rely on our manual maps. We
were able to migrate into an automated system without much disruption on our
day-to-day activities.

In 1996, with the help of a business consultant, the company started to initiate
different information systems. One of them was the scheduled implementation of
the AM/FM/GIS project in late 1997. During the initial stages of the project it used
the data from the automated primary mapping system as a springboard in the
implementation process. After the data was completely transferred, middle
management then decided to implement a cutover procedure whereby stopping
the use of the automated primary mapping system and completely migrating to
the new AM/FM system. At this stage is where we have experienced resistance
from users.
Resistance Encountered
Change is present in our daily activities that we hardly notice it, not even the
resistance that accompanies it. Personnel are willing to accept that change is
constant and an everyday event. While change is continual, it is hardly
welcomed. When change becomes rapid and enormous, the resistance becomes
more noticeable and harder to manage. In this case there are broad reasons on
why employees resist the changes being implemented. For one, they may not be
comfortable with the changes being implemented. Like in the case of the
draftsmen, almost 50% of them have been with the company for more than ten
years. They were used in doing updates on manual maps, that they are reluctant
to exchange the comfort of familiarity with uncertainty. They may not be
comfortable with the change itself, especially at the time when we have just
recently implemented the automation of primary maps. Employees feel that it is
just now that they have adjusted themselves with a major change and here
comes another change being implemented. Others may feel that the decision for
this change is technically incorrect and this is especially true for the end-users of
the system.

Another major reasons why we have encountered resistance came from the
method by which the change was introduced. Majority resisted because they feel
that they were not been properly involved in the change process. Some are
annoyed in situations where they are ill informed while others simply resist an
authoritarian approach.

During the implementation of our project, personnel did not agree on both the
nature of change and the methods used during the implementation, thus it
proved doubly hard for us to manage employees resistance to change. As the
saying goes "The way that people feel about a change determines how they will
respond to it".
Benefits of Resistance During our implementation as we are adjusting to the
planned change, people became discouraged because of the problems that
developed. The project was subjected to criticism, attacks and even failure,
because it appears to be not working. So what we did was to stop for a while,
look back and re-examine the change proposals. We then revised the
implementation procedure making sure that they are appropriate and then use
the system for its intended purpose. This is one benefit we got from employee
resistance wherein it served as a check and balance on the proper
implementation of the project, and resulted into benefits on the company's
interests. It also shows that that reasonable employee resistance causes
management to screen its proposed changes more carefully, and it discouraged
careless project implementation.

The kind of resistance that we got helped us identify specific problem areas; thus
we can take corrective measures before serious problem occurs. It also serves
as a guide so that implementors do a better job of communicating a change that
would lead to a better acceptance in the long run. Building Support for Change

By looking at the reasonable resistance offered by employees we were able to

see what went wrong with the project implementation. We were able to determine
what should we do in building support for change:

• Identifying and communicating to the right people - this is very important

before, during and after the planned implementation. During the planning
stage of our AM/FM project there was no extensive talks between the
planners and the users. So when the project was implemented some
functional requirements that are needed for the operational activities were
not yet available. This leads to the perceived technical incorrectness of the
system. After the implementation of the project, communication is also
very important in assessing the progress of the project. This would greatly
increase the chances of success since we could make corrective
measures decisively where it is needed. Which leads me to the next item.
• Having a fallback procedure - As we have seen in our project
implementation, cutover procedure is not the appropriate approach. Since
there were functional inadequacies of the new system, operational
activities were disrupted. Users became frustrated when expected work
outputs could not be delivered. So, users have already made an
impression that it was an incorrect decision to change eventhough the
inadequacies were solved after some time. This resulted to a greater
resistance that we have to deal with, which clearly illustrates the danger
on the methods of change greatly affecting the nature of change.
• Considering software preference - Although software selection is more on
the technical issue, it has some effects on people issues. We know that all
GIS softwares have similar basic functionalities. But it has a great impact
on people if you are using a popular one. For one, you will have an
abundant pool of workers in the market for your manpower complement.
Also, it helps as a motivational factor for your employees knowing that
proficiency in using them would mean a boost in self-esteem among their
professional circle. Also, deep inside they know that it would be a value
added in their marketability.

Leadership in Change
Although there are problems on the tactical implementation of the AM/FM project,
we are very fortunate to have a good strategic plan in anticipating the need for
change. Employees are well aware on the need to be prepared in a deregulated
environment. Management had made a bold move in developing a master
strategy for planned change. Not only did the company initiated different
information systems to improve efficiency but it also addressed behavioral
issues. This means that employees are taught on how to let go of the old
methods of working, and it also addressed the problems on uncertainties
inherent in change that cause workers to be fearful. MERALCO was successful
in creating an organization that welcomes change by:
 • Having transformational leaders - Management initiated bold strategic
changes to position the organization in the future. They articulated the
company's vision and sell it vigorously. This helped the employees rise
above their narrow focus to see a broader picture. They showed charisma
that helped influence employees to take early and sustained action. They
expressed high performance expectations making each employee feel
their importance in the organization.
• Creating a mission, vision statement - As MERALCO accepted the new
challenges posed by the changing business environment, it redefined the
mission, vision statement of the company. It made a more realistic and
appropriate goal or idea of what should be accomplished. It redefined the
corporate culture of the company that enabled employees to think beyond
their capabilities and raised their awareness to new heights. This
increased their levels of commitment and enthusiasm towards a common
goal.
• Stimulating Learning - Introducing change alone was not enough; one
critical task is to develop people's capacity from the experience of change.
MERALCO trained its seven thousand plus (7000+) employees to the
different programs like MERALCO Values Course, Customer Service
Excellence, and Total Quality in MERALCO. These opened the eyes of
employees to a positive attitude towards change, to let go of the old ways
and be more aware of the needs of our customers whether internal or
external. We know that seminars involved cost to the company but it
leaves no stone unturned to the development of its employees. This is
reflective of the company's belief that its employees are its most valued
asset. In fact, the company even went as far as offering non-work related
seminars but self-improvement ones.

With this mindset in place we can say that we are not just leaving behind a
legacy of simply the change itself but an end product of a dynamic organization
that will continue to change.