Changing the Way Organizations Change

October 24, 2012

In case you missed it, the world changed about three years ago.  We’ve even created labels for what happened: “The Great Recession” caused our “New Normal.”  Organizations of all sizes, of all types, and in all regions of the US are compelled to operate differently: budgets are tighter because resources are tighter; customers are selective because they can afford to be; and workers are disengaged – some even may be disenfranchised (see my column last month on deteriorating employee engagement).

Today – perhaps more than ever – organizations are facing incredible amounts of change.  And because it doesn’t look like it will end soon, organizations are faced with a simple choice: systematically manage change to remain competitive, successful, and vibrant…or don’t.  But realize that if you choose not to change, there are consequences: many of those organizations will deteriorate and ultimately fail (if you don’t believe me, think of Polaroid, Circuit City, Blockbuster, and just last week, Newsweek).

But why is managing change so hard?  And what can leaders do to more effectively navigate – indeed, create and sustain – change within their organizations?  I’ve compiled 13 ideas…

The case for action is clear.  Walter McFarland, in a compelling Harvard Business Review article last week (“This is Your Brain on Organizational Change”) declares: “Increasing competition, globalization, technological changes, financial upheaval, political uncertainty, changing workforce demographics, and other factors are forcing organizations to change faster and differently than ever before.”  I’m convinced.

He goes on to say that the track record of change efforts are terrible and may be getting worse!  (It’s estimated by many sources that over 70% of change efforts fail, and that percentage might be rising.)  But why? Change efforts have been studied for at least 30-40 years, so why is it that they show no sign of improving?  There are probably many reasons:

·         Poor communication (by senior leaders and throughout the organization).

·         Lack of senior leader commitment and/or competencies to manage the change.

·         Lack of focus.  Constancy of purpose is critical during change.  Switching directions, inconsistency in decisions, and/or poor alignment between vision and action will always cause fear and distrust.

·         Poor planning or under-resourced efforts.  McFarland suggests that change is always dreaded and usually a surprise to employees, which implies a lack of preparation as well as a lack of communication and feedback loops.

·         A perceived need to “create a burning platform” – trying to motivate employees by creating an expressed or implied threat.  While most change efforts do originate from a legitimate reason to change, creating a burning platform sometimes (perhaps oftentimes) results in a natural neurological response: it makes people uncomfortable and creates the same fight-or-flight stress response as is created by life-threatening stimuli.  Let’s face it: we are wired for self-preservation.  So maybe creating the burning platform is having the exact opposite effect as what leaders hope!

·         Leading change from the top of the organization down: concentrating change efforts with only a few individuals leads to under- (or mis-) communication, which creates fear.  McFarland notes that change emanating from the top-down is depriving employees of several key social needs – namely: status, certainty, autonomy, relatedness, and fairness.

I probably could go on.  I think those issues are all causes of ineffective change efforts, but they are also symptoms of the main root cause: leaders generally lack the ability to engage people – in short, to manage human resistance to change.

Let’s face it: traditional management training focuses on the organization as if it were a machine – a system of processes and activities that presumably generate value for customers and stakeholders.  While that is true on one level, I think it misses the point that organizations are lead, operated, and run by people.  So it stands to reason that just feeding a change order from the top down into the organization won’t work: you can’t just reprogram the “machine” and see the change automatically stick.

On the contrary, it has been said that organizations are living entities, because they are comprised of other living entities (people) who actively exchange energy (decisions, activities, work), who engage in meaningful relationships, and who operate both within and outside a system that creates value.  Norman Wolfe, President and CEO of Quantum Leaders, Inc. in a December 2010 Fast Company article described it as this: “[Organizations] are organic systems with physiology, emotions, and spiritual context.”  He goes on to say that organizations are driven by a contextual foundation – an underlying belief system – which I think gives it personality, ethics, and values.  We call that culture.  And we’ve all recognized that every organization has a distinct culture.

McFarland seems to agree with this concept.  He suggests that to think about change differently, we must think about people differently – not as commodities on which leaders impose change, but as “sources of real and powerful competitive advantage.”  In other words, leaders need a more collaborative, cerebral approach to change that involves a greater proportion of the organism.  He also suggests that leaders need to think of change differently – not as a perpetual crisis, “but as an opportunity to be better prepared and equipped to manage organizational shakeups as a normal part of doing business, and as an opportunity to personally develop and grow.”  Sounds like the new normal to me.

Change is messy.  It is non-linear – it is usually chaotic, full of emotions, and completely counter to human’s survival wiring.  No wonder organizations struggle in making successful change!

So what can leaders do to more effectively navigate change – or at least create a culture that is more resilient to change?  Here are 13 ideas from a variety of sources:

Give people control.  Rosabeth Moss Kanter (in an HBR article published last month: “Ten Reasons People Resist Change”) suggests that change interferes with autonomy and can make people feel as if they’ve lost control.  It’s about who has the power, and as McFarland illustrates on a neurological level, if people sense a loss of control, their fight-or-flight reaction will kick in.  So good leaders give people choices – they invite employees into planning and decision-making, giving them ownership of the change.

Ease employees into change.  This one, too, is all about being sensitive to how humans are wired and our natural resistance to change.  As Moss Kanter states: “Decisions imposed on people suddenly, with no time to get used to the idea or prepare for the consequences, are generally resisted.  It’s always easier to say ‘no’ than to say ‘yes.’  Leaders should avoid the temptation to craft changes in secret and then announce them all at once.”  In other words, make change gradual and bring people along by introducing a series of smaller, more easily digestible changes.  Plant seeds, offer hints of what might be coming – not to tease employees, but to create a more gradual transition.  A series of smaller, more digestible changes also allows for more frequent feedback from your people.

Reduce uncertainty.  Similar to the one above, we are creatures of habit and really don’t favor uncertainty or ambiguity.  “Trust me” usually isn’t a phrase that’s eagerly embraced by employees when it comes from management.  Moss Kanter suggests that “people will often prefer to remain mired in misery than to head toward an unknown” – the devil you know is better than the one you don’t.  So leaders should try to create certainty by communicating clear and simple action plans, timelines, and milestones.  This creates more certainty – more safety – for employees.

Minimize transitions.  Sometimes change is resisted not because of a disagreement over the need to change, but because of the magnitude of change.  Remember, people prefer the status quo – we’re creatures of habit.  So leaders should try to minimize the number of changes needed, keeping focused on the central change.  Whenever possible, keep things familiar.  As Moss Kanter says, remain focused on the important things and avoid change for the sake of change.  Morten Hansen, also in HBR (“Ten Ways to Get People to Change”) calls this “embracing the power of one.”  Leaders should focus on one behavior to change at a time, sequencing the change of more than one behavior over time.

Use data.  According to David Witt in an article published earlier this week in Blanchard LeaderChat (“Trying to Help Someone Change?”), most leaders live and die by the numbers.  So one way to convince leaders (and many employees) of the need to change is to share data, information, and a compelling fact-based case for action.

Make change relevant.  Similar to using data, employees need to understand not only the need to change, but how their efforts to make and sustain any change will pay off.  Paint the picture for them, illustrating how their “investment” (of time, energy, emotion) to make the change will increase results, improve customer satisfaction, make their work easier or more effective, and so forth.  Jim Balasco in the seminal book “Teaching the Elephant to Dance” declared: “Change is hard because people overestimate the value of what they have and undervalue the value of what they may gain by giving that up.”  So help people see how the change benefits them and the organization’s other stakeholders.

Measure change.  Not only is data useful in building a case for action, but they are useful in monitoring progress of the change.  But be sure to “make it sticky,” says Hansen – measures and goals must be concrete and measurable.  “Listen actively” is vague and not measurable.  But “paraphrase what others say and check for accuracy” is a behavior that’s more concrete and measurable.

Acknowledge that change takes effort.  Here’s a fact: making change takes time, effort, energy.  It is indeed more work.  And people are generally overworked already.  So acknowledge the effort required by rewarding and recognizing participants of change – give them extra perks if you can.  Give them time off; give them a gift certificate for a nice dinner so they can decompress with their family; give them something to note the sacrifices they are making.

Let go of the past.  All change requires moving from current state to some sort of future state.  As such, the people associated with the current state (the one that didn’t work or at least is being changed) may be defensive about it.  Moss Kanter: “When change involves a big shift in strategic direction, the people responsible for the previous direction dread the perception that they must have been wrong.”  Leaders should help maintain people’s dignity by celebrating those elements of the past that are worth celebrating.  In the words of Daniel Goleman: “Release with dignity that which is no longer vibrant – honor it, and release it.”  There may be a brief period of necessary mourning, but then you must move on and let go.

Mobilize the crowd.  This is a pretty funny (but highly instructive) 3-minute video.  Where would you join the dance – early, middle, or late?  Leaders need to mobilize the crowd by convincing a critical mass of the need to change.  Early adopters and key influencers create some peer pressure for others to join in (psychologists have labeled this “social comparison theory”): energy and momentum are created, and eventually change efforts reach a tipping point where late-comers and laggards eventually join in.  Change can occur when concepts spread more naturally, more virally.  Good leaders use the power of social networks to diffuse change.

Be aware of unintended consequences.  Change impacts not only the areas directly affected, but oftentimes other departments, customers and other stakeholders, partners and suppliers outside the organization – which can negatively impact supply chains and customer satisfaction.  Leaders must consider all parties, create buy-in, and work with them to minimize disruption.

Be genuine.  Change is hard because change oftentimes hurts.  Jobs are sometimes lost; reporting relationships and roles sometimes change; investments and contributions people have made are sometimes erased.  Therefore, successful change requires servant leadership.  In the words of Moss Kanter: “Leaders need to be honest, transparent, fast, and fair.  Although leaders can’t always make people feel comfortable with change, they can minimize discomfort.”

Institutionalize change.  Once change is made, organizations need to “hardwire” it into their systems – making sure that new behaviors are rewarded, embedded in training, succession planning, and other processes so that the organization doesn’t snap back into old habits.  Stay the course.

Change is hard, but change is real.  The need for organizational change has always been there, but today it’s more prevalent – and more significant – than in the past.  Leaders can increase the odds of more successful change by acknowledging the human element of today’s organizations.  Communicate; listen; involve; appreciate; empower; be genuine.

To hear 12+ leaders share best practices on their organization’s change efforts – including the CEO of Mayo Clinic Health System, the President of the University of Minnesota, and many more – consider attending our fall conference November 14, “Managing Transformational Change.”  Pre-conference tools workshops also on November 13.  More information is in the second article below or visit here.  Don’t miss this extraordinary learning and networking opportunity.

Yours in Performance Excellence,

Brian S. Lassiter
President, Performance Excellence Network (formerly Minnesota Council for Quality)