Demonestisation: Is there a lesson on Change Management?

Demonestisation: Is there a lesson on Change Management?

In the last few days since 8th November, India has produced more economists than it has produced in the last hundred years with each one of them having a definitive and conclusive view on the aspect of demonetisation! Everyone and anyone who can at least pronounce “demonetisation” in some manner, has an erudite opinion to offer. The views are quite starkly contrasting like black and white, ironically resembling the very colour of the type of money in question. I am no economist of any degree of credibility unlike the millions of those who have sprung up since the late evening of 8th November, 2016 and hence would not dare to venture in that field. On a more serious note, there are obviously enough pro’s as well as con’s to the dramatic measure taken (call it “surgical strike” or “carpet bombing” as you may like) and the jury may well be out on that for at least a few Quarters  before anyone can conclusively come to any conclusion either ways.

That said, what has been a massive learning for me has been the manner in which the Change management has been done by our Prime Minister. It has toppled many textbook theories on the subject and may well have been quite contrary to the practices followed by many corporates. I am aware of the vehement critics that many of my learned friends and colleagues have on this very subject on how this change management process has been (or is being) handled and I do respect those views whole-heartedly, even if I do not agree with some of them.

On one of the few things where there can be no two opinions is that 8th November, 2016 would go down in the history and economics books on India as one of the most watershed days, whatever be the final outcome of the decision. It changed the life of 1.25 billion Indians in India and to a marginal extent even that of non-resident Indians who did have any reasonable quantum of Indian currency in the higher denominations. It has produced a change (for good or for bad, history will determine) in the lives of millions of those who earn barely two square meals a day as well as the hundreds of thousands of those who had enough money for their next 5 generations to live off it. Rare is a change which impacts all sections of society so much so suddenly and with such impact.  Whatever said and done, apart from a few heated debates on television, the country has taken the change peacefully without any disruption of any formidable nature that we in India are quite used to. Apart from the serpentine queues in front of ATMs and Banks and cash transactions virtually coming to a grinding halt (at least in the first few days) and the e- wallets and credit cards experiencing an unexpected boom, life has been as usual for most. In India, we have experienced far greater disruptions when the petrol & diesel prices go up by a few cents or when some river water dispute between States take place. People, by & large, have taken it well and hence so far the change process seems to have gone rather smoothly. This is indeed some achievement given the magnitude of change.

The remarkable thing about this change process was its secrecy and abruptness. The entire impact of this massive change process lay in its “shock & awe” effect. The intended purpose would have been defeated completely if this “shock & awe” effect was missing.

The first element of text book change- management process is creating a sense of urgency where there is adequate talking about “we must do something” and questioning of the status quo so that enough ground is prepared for the change to happen. Imagine what may have happened if, for instance, there had been a debate on the subject even for a few days before actual implementation!! If there was adequate “sense of urgency” created by way of heightened talk on the ill-effects of high denomination currency even a few days in advance, many of the smart people (and India has them dime a dozen) would have anticipated what is in the offing and taken “adequate measures” to nullify the same.

It is not that “sense of urgency” was not created- of course there was enough talk on how “black money” was having an adverse impact on our society as well as how terrorism was being funded using such money. However, the sense of urgency and entire talk on the subject was on the end-result not on the means of change. Demonetisation or the removal of two high denomination currency notes from the system is a means to tackle the menace of “black money” and terror funding at the end of the day; it is not an end in itself. Though there was adequate urgency created on the end-result, there was not a single hint on how that change would be brought about. This distinction is an important one and, to my mind, is a very important learning. While it is critical to create a sense of urgency and therefore have a consensus on the desired end result, there are times, when it is not prudent to talk about the means for that change.

The second element related to the above, is that a text book change management plan would typically talk about building a guiding team. In this case and to the best of my knowledge, there was hardly one. This was something which was a very closely held secret right at the top and perhaps the number of people who were in the know of it can be counted on fingers of one hand. Did this impact the preparation for the change itself? Of course it did. The number of new currency notes could have been printed much in advance, the ATMs could have been calibrated much earlier, so on and so forth, if the guiding team was larger. It would have certainly helped in making the change process even smoother. But at what cost? The very purpose of the change would have been defeated if such an approach were to be taken. Therefore, while smooth change process does mean that all impacted by the change must have as less of a hardship as possible, one needs to balance that with the effect that such effort would have on the very impact the change is supposed to bring in.

The third element of a text book change process is creating a compelling vision for the change process. To my mind, this process has taught us the significance of this step. Quite literally, hundreds of millions of people have been inconvenienced in a manner which most would not have ever encountered in their lifetime but yet most have taken the pain and inconvenience rather well only because the vision that has been created is commendable and no right minded citizen of the country can ever have a contra-view on that vision. The vision has been created over a period of months- there have been lot of speeches on “black money” in the country and its ill effects on society and economy as also how terrorism is getting funded and is damaging our country and endangering the lives of each one of us. There would hardly be anybody who would refuse to go through temporary difficulties or hardships if these menaces were meant to be eradicated through this means. From a tactical point of view also the compelling vision has helped immensely – anybody opposing this initiative would get branded as, at best, trying to protect those who have been adversely impacted because of the drive against “black money” or worse, has been personally impacted because of this! Such is the manner in which this “vision” has been created and communicated that even the die-hard political opponents cannot dare to oppose the move per se and their best attack is on the means and manner but not on the change per se. That is indeed the significance of creating a compelling vision for the change which often gets short-changed in the change processes undertaken on several occasions.

The fourth element of a text book change management process is “empowering action” so that obstacles are removed for those who are embracing the change initiative. In the last 20 days or so since the announcement, there have been 25 or so changes been announced on the method of implementation, largely with the view of easing the implementation for the masses at large. While one can always argue that these “amendments” to the process is a result of lack of thinking through, it may well be the case, and there are enough reasons to believe so, that these changes have been brought about to ensure ease life of those getting impacted by this mega change more than others. The learning is that it is not always necessary to think through every possible nuance and have a fool-proof solution before embarking on a massive change process; however, it is critical that one has the flexibility and the nimbleness to bring about improvisations as and when the need arises on the go instead of getting caught in a bureaucratic quagmire.

Fifth element in a text book change-management process refers to “creating short term wins”. I think all the news about “unaccounted” money oozing out of every nook and corner of the country is creating enough stories on “short term wins” for this change management process. All the news about increase in the usage of e-wallets and plastic money further bolster the short-term wins in this process. So much so that even the complete slow-down in certain sectors notorious for use of “cash transactions” is being talked about as a “win” for this process. Whatever be the long term results, no one can ever doubt that there would be an increase in usage of plastic money and e-wallets with immediate effect. Cash transactions, regardless of “black” or “white” have already come down significantly and is likely to be so, at least in the foreseeable future. This is being publicized as a significant short term win to start with although this by no means was the primary objective of this mega change initiative. Remember the primary objective of this demonetisation initiative is the removal of black money and not really boosting the usage of e-wallets or plastic money! The learning is to look for what could be the “collateral” benefits of a change management process and make them the “sort term wins”.

As far as ensuring that there are “wave after wave of change initiatives so that the vision is accomplished” which is the sixth step in a text book change management process, there are already adequate talks in various forums, few formal but mostly informal, regarding the next wave of changes likely to happen for the same vision. Would reiterate the on the informal part of the news on the next waves of changes likely to come. The umpteen messages and jokes doing rounds in social media regarding the likely “next steps” on this process. Though everyone takes them with buckets of salt nevertheless it does give an impression that more is to come on this subject.  It seems to be creating a sense of purposefulness regarding the broader vision of ending black economy. Sometimes the informal channels of communication can be very effective in communicating and creating the desired impact without any official word on the subject.

So far so good and how the “change would be made to stick” which is the last step in this, is yet to unfold. It would be foolhardy for me to say how that would unfold and as an Indian citizen I only pray that the change sticks.

The larger point is that irrespective of what our political affiliations may be, there are enough reasons to take a leaf or two out of this mega change management process when we look at managing change in our own worlds.

 

MAHESH KOSHY MELEKUTTU

Data Governance Specialist @ USAA | Scaled Agile Consultant, M.Tech.

7y

In my understanding, this is the best learning to see how we should not apply change management in a larger organization. Change management is always essential and its success is purely based on the way of execution. We might have noticed lot of IT companies last their image in the Market due to the poor change management across their organization. Organizational changes are always good for the organization to grow in the industry. But a poor change management process will kill the intention and result in the defamation of the organization.

Ashok Vashisht

CEO at ERA Learning Skills Academy

7y

It was a great read. One thing about change is that there always is resistance, in this case the resistance was more from opposition parties . The message has been strongly conveyed that black money will not be tolerated but the future actions should show the same consistency as this action is also seen as a political gimmick because of the forthcoming elections in some states. If it does not finally control black money which the figures will show in future then it will have a major adverse impact for BJP and Modiji in the Loksabha elections of 2019 and also their credibility in governance.

Gautam Verma

Material, SCM, Procurement, Contracting,Logistics,ERP, Projects, Strategic Sourcing,

7y

Why some people are still reluctant to come clean. Some more assurance or behavioral change required.

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Madhu Nair

Head of Product Management and Strategy - iFlyStaff at IBS Software Services

7y

Good read. Nice analysis and correlation to Change Management.

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Shyam Srivastava

Vice President (Purchase, Stores and Forestry) at Andhra Paper Ltd (Formally known as International Paper APPM Ltd)

7y

Wonderful article, It really contradicts the beaten path of change management process. end results may be one way or other but this has impacted each and every single Indian citizen and does not follow standard change management process. 25 changes in policy in 20 days also breaks one more tradition of governments decision making process which has always been very slow .

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