Change is in the wind... Are you ready for it?
"The important thing is this: To be able at any moment to sacrifice what we are for and what we could become."
- Charles Dubois
If there is one thing all business people agree on, it is that the rate of change is becoming faster not slower. There are of course many reasons for this: governments around the world seeking to intervene more and more in the activities of private companies, exchange rate volatility, radical new business models coming from nowhere, the speed of information technology, the globalization of private capital. However the failure rate of large change projects in many companies is still well over 50 percent! Large 'successful' companies have been brought to the brink of bankruptcy and undergone wrenching restructuring because they were unable to change fast enough when their markets, technologies and client preferences changed, sometimes radically.
Often, however, the change over time in the external environment is so subtle that it is hard to see the threats and opportunities. The proverbial story of the two frogs put into hot water comes to mind: One frog is put into boiling water and immediately jumps out to save itself; the other, when the heat is applied slowly, boils to death as the temperature rises gradually - it's the same with organizations.
High Performance organizations stay 'close to the street' and maintain internal agility through decentralized, empowered teams which can make decisions and course-corrections quickly. Competent managers dispense with the hubris and arrogance (way too common in business) and seek out real insight (rather than just 'information') from quality external feedback provided by customers, suppliers, employees and industry analysts as a continual process. Command and control organizations do not do well in fast changing environments. Networked organizations which can adapt, leverage/scale and exploit opportunity quickly are the future.
Change management as a defined process
Learning how to change is a skill to learn like any other. Managers and entrepreneurs can create clear processes which will greatly improve the effectiveness for implementing change within their organizations. By following a process and sticking to it, the likelihood of success increases tremendously.
Remember that change, in and of itself, is neutral. Increasing the quality of change decision making means thinking through all the implications for the change before starting, and getting as much feedback as possible from different people before initiating. Poor managers often start change without thinking it through and looking at all of the options available. The damage to leadership credibility can be huge when the process is not well thought through. William Bridges in his book, Managing Transitions: Making the Most of Change, states that you should ask four basic questions before starting a large change project:
What was the problem that is causing the need for change?
Who said it was a problem and based on what evidence?
What would have occurred if no one had acted to solve the problem?
What would have happened to the company if there had been no change?
Remember the difference between external change and employee response to change.
Change is external. It's the new product, the closing of the department, the restructuring. But what many managers fail to recognize is that the internal psychological response of their workers to the external change is occurring at a much different (read: slower) rate of acceptance. That internal psychological transition, and behavior changes, have to be managed just as much as the external change itself. Some managers think that when they 'write the memo' the change is done. It hasn't even begun. The radical change to a free market in Poland started in 1989/90 and there still are large segments of the population who have not made the internal psychological adjustment. This psychological adjustment needs to be addressed, and managed as well.
Key points in change management
The following are some key practical points when implementing a change management project:
The leaders of the change have to be fully on board to support it and make sure that their actions and behaviors are consistent with the new change: "Watch what I do, not what I say." The organization will be watching very closely for any signs of inconsistency by management and will test management's sincerity and commitment to the change.
Educate employees on the change process itself. Make the organization self-aware of what it is doing right and what it is doing wrong against a written process standard which employees have received from management. Communicate the change status through periodic reality checks. All too often managers patronize their employees instead of strengthening them by showing the big picture of the change process and at what stage they are in it.
Who owns the process? Make sure there is someone in the organization who owns the process for the change. If it is everybody's responsibility for the process then it is nobody's. Also, is there a difference between managing the change and maintaining the new process after the change has occurred. Management has to put the money and time resources in place in order to maintain the new systems for example. Clearly articulate the role that every employee in the organization has in this period of change.
Start to build a coalition of key people at all levels in the organization before starting the change in order to get new perspectives to improve the quality of the change and to get buy-in.
Focus on clear measurable results. All too often, change projects take on a life of their own to the point where managers get bogged down in the process without keeping their organization focused clearly and consistently on the desired results. Continuous communication on the results effected to the organization is needed. This of course presupposes that measurement metrics have been created, are prepared in a timely way, and communicated to the organization regularly in a manner that touches on their daily work and on their role in overall contribution.
Some additional communication issues: Focus your communication to the organization on the reason why the change is occurring, not just the change itself. Also, be clear and specific on the future state to emerge from the change. The more specificity and clarity, the more people can recognize the direction they need to go.
Give the organization external evidence (customers) on why the change needs to occur. External evidence from third parties have major credibility with employees.
Make sure that the change being contemplated is to the degree needed to make the impact. Half-hearted attempts at change waste enormous amounts of time and money. If there are individuals in the organization who are impeding the change required, then they need to be directly confronted and, if the sto-newalling persists, they need to be removed.
Invest the resources needed. Make sure that you put the necessary time, people, training and money behind the change effort.
Do not denigrate the past. What was done in the past, that is now being changed, may have been very necessary for that time and circumstance. Make sure that people who are losing from the change are somehow compensated for it.
Accept the fact that people will be feeling ambivalent about major change at the beginning.
Be consistent with the change. Make sure that you're specific in what exactly will be changing and what will NOT be changing. Make sure that all procedures, policies and documentation are updated, to be consistent with the change.
Show short-term wins. People undergoing change are often skeptical and need to see some victories in order to maintain motivation during the process. Make a big deal of the short-term wins occurring from the change.
If the change involves the loss of something (corporate downsizing, firing of top management) remember that employees often go through a 'neutral phase'. This is a period when the old has been lost but the new has not yet started. Make sure that people have the ability to get more information not less, and that they can be part of the solution in contributing new creative ideas as the new phase is started. Stress can be reduced through real employee participation.
Incentivize for the right behavior. If you want people to make behavior changes then make sure that you have properly incentivized them with monetary and non-monetary rewards for the new behaviors required.
Symbolize the identity of the new change and celebrate the successes during the process of change.
Organizations can learn how to change. It certainly makes sense to fully prepare large change projects and understand their far-reaching consequences. We all know of how many disasters have occurred when a manager, with poor assumptions, pursues 'flavor of the month' change projects which do more harm than good. Managers learning how to change will be exponentially more effective in their results.
Peter Strupp is Chief Executive Officer of Intersource Holding, a human capital services group based in Warsaw
- Charles Dubois
If there is one thing all business people agree on, it is that the rate of change is becoming faster not slower. There are of course many reasons for this: governments around the world seeking to intervene more and more in the activities of private companies, exchange rate volatility, radical new business models coming from nowhere, the speed of information technology, the globalization of private capital. However the failure rate of large change projects in many companies is still well over 50 percent! Large 'successful' companies have been brought to the brink of bankruptcy and undergone wrenching restructuring because they were unable to change fast enough when their markets, technologies and client preferences changed, sometimes radically.
Often, however, the change over time in the external environment is so subtle that it is hard to see the threats and opportunities. The proverbial story of the two frogs put into hot water comes to mind: One frog is put into boiling water and immediately jumps out to save itself; the other, when the heat is applied slowly, boils to death as the temperature rises gradually - it's the same with organizations.
High Performance organizations stay 'close to the street' and maintain internal agility through decentralized, empowered teams which can make decisions and course-corrections quickly. Competent managers dispense with the hubris and arrogance (way too common in business) and seek out real insight (rather than just 'information') from quality external feedback provided by customers, suppliers, employees and industry analysts as a continual process. Command and control organizations do not do well in fast changing environments. Networked organizations which can adapt, leverage/scale and exploit opportunity quickly are the future.
Change management as a defined process
Learning how to change is a skill to learn like any other. Managers and entrepreneurs can create clear processes which will greatly improve the effectiveness for implementing change within their organizations. By following a process and sticking to it, the likelihood of success increases tremendously.
Remember that change, in and of itself, is neutral. Increasing the quality of change decision making means thinking through all the implications for the change before starting, and getting as much feedback as possible from different people before initiating. Poor managers often start change without thinking it through and looking at all of the options available. The damage to leadership credibility can be huge when the process is not well thought through. William Bridges in his book, Managing Transitions: Making the Most of Change, states that you should ask four basic questions before starting a large change project:
What was the problem that is causing the need for change?
Who said it was a problem and based on what evidence?
What would have occurred if no one had acted to solve the problem?
What would have happened to the company if there had been no change?
Remember the difference between external change and employee response to change.
Change is external. It's the new product, the closing of the department, the restructuring. But what many managers fail to recognize is that the internal psychological response of their workers to the external change is occurring at a much different (read: slower) rate of acceptance. That internal psychological transition, and behavior changes, have to be managed just as much as the external change itself. Some managers think that when they 'write the memo' the change is done. It hasn't even begun. The radical change to a free market in Poland started in 1989/90 and there still are large segments of the population who have not made the internal psychological adjustment. This psychological adjustment needs to be addressed, and managed as well.
Key points in change management
The following are some key practical points when implementing a change management project:
The leaders of the change have to be fully on board to support it and make sure that their actions and behaviors are consistent with the new change: "Watch what I do, not what I say." The organization will be watching very closely for any signs of inconsistency by management and will test management's sincerity and commitment to the change.
Educate employees on the change process itself. Make the organization self-aware of what it is doing right and what it is doing wrong against a written process standard which employees have received from management. Communicate the change status through periodic reality checks. All too often managers patronize their employees instead of strengthening them by showing the big picture of the change process and at what stage they are in it.
Who owns the process? Make sure there is someone in the organization who owns the process for the change. If it is everybody's responsibility for the process then it is nobody's. Also, is there a difference between managing the change and maintaining the new process after the change has occurred. Management has to put the money and time resources in place in order to maintain the new systems for example. Clearly articulate the role that every employee in the organization has in this period of change.
Start to build a coalition of key people at all levels in the organization before starting the change in order to get new perspectives to improve the quality of the change and to get buy-in.
Focus on clear measurable results. All too often, change projects take on a life of their own to the point where managers get bogged down in the process without keeping their organization focused clearly and consistently on the desired results. Continuous communication on the results effected to the organization is needed. This of course presupposes that measurement metrics have been created, are prepared in a timely way, and communicated to the organization regularly in a manner that touches on their daily work and on their role in overall contribution.
Some additional communication issues: Focus your communication to the organization on the reason why the change is occurring, not just the change itself. Also, be clear and specific on the future state to emerge from the change. The more specificity and clarity, the more people can recognize the direction they need to go.
Give the organization external evidence (customers) on why the change needs to occur. External evidence from third parties have major credibility with employees.
Make sure that the change being contemplated is to the degree needed to make the impact. Half-hearted attempts at change waste enormous amounts of time and money. If there are individuals in the organization who are impeding the change required, then they need to be directly confronted and, if the sto-newalling persists, they need to be removed.
Invest the resources needed. Make sure that you put the necessary time, people, training and money behind the change effort.
Do not denigrate the past. What was done in the past, that is now being changed, may have been very necessary for that time and circumstance. Make sure that people who are losing from the change are somehow compensated for it.
Accept the fact that people will be feeling ambivalent about major change at the beginning.
Be consistent with the change. Make sure that you're specific in what exactly will be changing and what will NOT be changing. Make sure that all procedures, policies and documentation are updated, to be consistent with the change.
Show short-term wins. People undergoing change are often skeptical and need to see some victories in order to maintain motivation during the process. Make a big deal of the short-term wins occurring from the change.
If the change involves the loss of something (corporate downsizing, firing of top management) remember that employees often go through a 'neutral phase'. This is a period when the old has been lost but the new has not yet started. Make sure that people have the ability to get more information not less, and that they can be part of the solution in contributing new creative ideas as the new phase is started. Stress can be reduced through real employee participation.
Incentivize for the right behavior. If you want people to make behavior changes then make sure that you have properly incentivized them with monetary and non-monetary rewards for the new behaviors required.
Symbolize the identity of the new change and celebrate the successes during the process of change.
Organizations can learn how to change. It certainly makes sense to fully prepare large change projects and understand their far-reaching consequences. We all know of how many disasters have occurred when a manager, with poor assumptions, pursues 'flavor of the month' change projects which do more harm than good. Managers learning how to change will be exponentially more effective in their results.
Peter Strupp is Chief Executive Officer of Intersource Holding, a human capital services group based in Warsaw
