Questions change management need to ask to answer about organisational change Part 2

In my last article I began to examine the common approach to change management within an organisational change program, and why two-thirds of such change programs fail. With four drivers of cultural change identified, it has also been seen by numerous studies that the reasons for failure falls squarely on the shoulders of change management and a lack of understanding of human behavioural patterns.

Predictable irrationality as a starting point for cultural change

Once the predictability of human irrationality has been accepted, it becomes easier for a change management approach to be adapted from the four cultural change drivers. By asking themselves a number of key questions, leaders of organisational change will be able to onboard employees earlier and create the environment for cultural change that will bring a change program its success.

Having discussed the areas of creation of a compelling organisational change story and becoming an example of new behaviours, here I look at the remaining two drivers of cultural change: change reinforcement and employee capability.

How to reinforce cultural change

Change management practice iterates the importance of ‘before, during, and after’ care. This generally is positioned with training and coaching, and rewarding with regards to set targets, uptake of systems and processes, so on and so forth. However, change management leaders find that this is an area where human irrationality reaches its heights.

Money doesn’t always talk in the process of organisational change

Although one of the main reasons for organisational change will be financial – the pursuit of lower costs and higher profits – paradoxically this is unlikely to be a major motivator for employees. While this may seem strange (who isn’t concerned about pay and remuneration?), it actually makes sense.

Organisational change is often measured with a number of metrics which will be new and therefore difficult to understand for many. Also, employees know that perception is commonly different to reality. In the words of Cuba Gooding when speaking to Tom Cruise’s Jerry Maguire: “Show me the money!” More commonly on the shop floor, you’ll hear the words, “I’ll believe it when I see it.”

Incentives and bonuses will be important, but unexpected gifts are also received well. Think of the positive impact a simple gift voucher will make when given to a staff member for performing well with a client. A friend of mine worked for a financial institution in London that gave all its employees a bottle of whiskey and aa fresh turkey for Christmas one year. Morale increased disproportionately. When thinking about incentives and rewards, ask these questions:

  • Do employees understand why the reward has been given?
  • Do rewards or incentives mean something to the person rewarded (for example, would a 19 year old customer services rep be likely to enjoy a night at the opera)?

Practice fairness throughout organisational change

While it’s necessary to appeal to the self-interests of individuals, they will expect any organisational change to be executed with fairness to all, including customers. Consider a restaurant that makes sweeping changes to its menu. Customers have been coming for years because they are happy with the food the way it is. The chef knows the old menu inside out, as do the waiting staff, but the owner has decided a new look is called for. Waiting staff can’t wait to bad mouth the decision to regulars, who fail to return and new customers are put off by the bad atmosphere. Revenues and profits collapse faster than a cold soufflé.

On a more global scale, JC Penney’s attempt at reengineering itself as a higher end retailer backfired catastrophically: employees didn’t understand the change, and customers didn’t want the change. To avoid this type of failure, ask yourself these questions:

  • Does the change ask too much of one section of the company?
  • Do the metrics of success make sense, and are they easily measured and understood?
  • Does the organisational change impact customers, and what extra strain will be placed upon frontline staff?
  • Am I communicating the fair state of play well enough?

Pay attention to the value of building capability for cultural change

New systems, processes, and procedures are likely to require an upgrade of skills and abilities. However, though this need is unequivocal, change management leaders are prone to ignore the factors which drive behaviour. In attempting to enforce cultural change, you should remember that behaviour is driven by the values and beliefs of your people.

This is exactly how Lou Gerstner managed to turn around IBM. He didn’t attempt to rip apart inherent values, beliefs, and skills. Instead he studied the company’s history, and turned all of its existing corporate identity into organisational change assets. From a culture of hardware, he created the world’s biggest consulting service.

Gerstner put in place a series of coaching events and a training regime that involved IBM people in design and structure, with targeted training to personalities and intellects. Ask these questions when designing a change program to increase skills and capabilities:

  • Am I considering my employees as individuals?
  • Have I paid enough attention to the impact of cultural change on existing values and beliefs?
  • Have I considered the integration of internal and external requirements for all stakeholders?

In conclusion

Cultural change impacts all stakeholders of organisational change. How a change program is led determines its success.

An enforcing attitude is the quickest way to encounter resistance to change management. Throughout the process of change, a leader must be an exemplar of the new culture and bring on board all impacted stakeholders.

Questioning change process and methods, and placing yourself in the shoes of those affected by the organisational change will bring the important issues clearly into focus. When this happens, your change program’s chances of success will increase exponentially.

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Questions change management need to ask about organisational change Part 1

John Kotter’s book, Leading Change, published in 1996 is considered by many to be one of the most influential change management tomes ever written. Research conducted by Kotter showed that only a third of attempted change programs achieved their goal. More than a decade later, a McKinsey global survey found that nothing had changed in the world of organisational change: still only a third of transformations make it. Overwhelmingly the reason for failure of a change program is the failure of change management to ignite long term cultural change. The question for leaders of organisational change, therefore, is how to influence long term culture and employee behaviours.

The four drivers of cultural change within organisational change

When establishing a strategy of organisational change, behavioural change is the key to success. The reasons for change may be obvious within the upper echelons of change management, but that doesn’t mean frontline employees understand these needs or the benefits that change will bring. There is a common sense approach to creating the environment for cultural change within organisational change:

  • Create a compelling story, which describes the need for change. Effective change management provides the story for change with which employees agree, because the rational for the change program has been logically argued and accepted.
  • Lead by example, with change program sponsors and change management’s chosen influencers of organisational change seen to be exhibiting required new behaviours.
  • Reinforce the change, with all processes, procedures, incentives, and systems aligned with the cultural change.
  • Build employee capability, as new ways of doing things will require new skills.

Although this process of change management is most commonly used, it also most commonly fails. The reason for such failure of organisational change, even when change management is following well versed cultural change principles is a failure to accept the irrationality of human behaviour. However, even though such behaviour is irrational, it does not follow that it is unpredictable.

Through the remainder of this article I will discuss ways in which to overcome basic human irrationality during your organisational change program.

How to create a compelling organisational change story

While communicating the need for a change program and then following up with reinforcement programs is good advice, too often employees fail to respond in the way change management envisages. There are three ways to overcome employee apathy toward the organisational change story:

Understand what motivates your employees

The rationale behind a change program is likely to be product and/ or financially based, with organisational change aimed at creating a better, more competitive company. Research has shown that while employees may understand this need, it is not their chief motivator. In fact, it provides only a fifth of motivational impetus for cultural change, with the other 80% provided by:

  • Impact on community
  • Impact on customer
  • Impact on company
  • Impact on colleagues
  • Impact on self

A compelling story needs to encompass all these issues. Ask yourself these questions about your change program:

  • Does it positively impact the wider community, perhaps by providing links to local schools?
  • Does it provide a better customer experience (or will it lead to more time consuming questions and complaints for staff to deal with)?
  • Does it positively impact the company’s image (for example, will shareholders see the benefits)?
  • Does it provide better working conditions for employees (or will it lead to crossover of responsibilities, for example)?
  • Does it lead to better conditions and terms of service for individuals (pay, hours, career development, bonuses)?

Employees react to cultural change better when it’s their idea

It is human nature to resist actions forced upon us. Think about how a baby lays awake crying, sometimes for hours, begging to be taken out of bed as soon as they are put down for the night. Right from our very first breath, human instinct is to be independent. No matter how many roadshows, events, intranet forums, and the like you run, unless your team is ‘with’ the change program, it will not succeed. Ask yourself this question before implementing organisational change:

  • Have I listened to my people, heard their concerns, and taken them into consideration?
  • Have I allowed input from the people most affected by the proposed organisational change?

Create a story with positives and negatives

If it’s too good to be true, it usually is. Similarly, if you paint a picture of complete doom and gloom – how things will pan out if no change is made – you are begging your people to point the finger of blame. That will only serve to create resistance and conflict. Instead of this, foster and environment of openness, accountability, and teamwork by taking a leaf out of Jack Welch’s book and asking these simple questions:

  • What is wrong here, right now?
  • How can we make it better, for the future, together?

Provide examples of cultural change to be followed

Change leaders, sponsors and change management, must be seen to exhibit the new cultures required through organisational a change program to be successful.

It’s a little like being on a diet: you may tell yourself that you need to lose weight, but unless the mind (the change leader) changes habits daily and forces the body to consume less and exercise more, then the stomach (the workforce) will never change its shape. If you want the organisational change required, then you, too, have to change. It is unreasonable to expect cultural change unless it is led and supported from the top. Ask yourself this question:

  • Do I live and breathe the cultural change that I expect my employees to absorb?

In Conclusion

Change management techniques and understanding is continually evolving as greater research of human social and reactive behaviour is delivered. Like organisational change itself, the effects of cultural change is a fast developing science. Successful change management requires continual education and re-education in the understanding of human irrationalities. In the next part of this two part series, I will examine how change leaders can best identify how to reinforce cultural change and then build employee capabilities for the deliverance of success.

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change management and innovation and leaderership

As you can imagine, I spend a fair amount of time keeping up with changes and challenges faced by industry and business in the fields of change management and innovation. So I’m constantly on the lookout for information and news that may impact behaviour and best practice across organisations.

Here’s a pick of what I’ve been attracted to this week:

Change Management

We wanted to make sure that we were making data-driven decisions,” said Pete Guelli, Hornets executive vice president and chief sales and marketing officer. “We did a tremendous amount of research.”

The next federal election could revolve around whether Canadian voters have a thirst for change or are more comfortable with the leadership they have seen from Stephen Harper, says former prime minister Brian Mulroney.

Change is a hot topic of a conversation now a days. Everybody wants it. Few actually achieve it. So why only the few achieve it? What’s the hold up? Most people want to become part of change, but usually waiting on …

One of the biggest mistakes we see with ERP projects is not realizing the need for organizational change management. I have heard, directly and indirectly, from.

Innovation News

Last year, we launched a program called the 1M/1M Incubator-in-a-Box. Part of its goal has been to stimulate corporate innovation and intrapreneurship. It has.

Innovation and more of it has become the mantra of top management. The ability to innovate and thereby sustainably create value for the business is becoming the defining competitive advantage for companies which want to …

Innovation Management and Steel Industry. In the current global economic conditions, effective management plays an increasingly important role in the steel industry. As changing environment stimulates evolution in the steel …

With the US economy steadily recovering from the Great Recession, and a flood of capital pouring into property markets, an overwhelming majority of commercial real estate executives report feeling optimistic about the …

Smart monitoring has come a long way and is just going to keep getting better. For solar businesses in Australia, systems that can help you build annuities, minimize costs, and back sell to past customers seems like pretty …

Where My Words Have Travelled

publish around the place from time to time. Here’s the latest:

Massive Open Online Courses (MOOCs) are the subject of a lot debate in the blogosphere. Will they be a disruptive technology for universities? Will they take over the trainer’s job in corporate organizations?

From a higher education perspective, it’s easy to see the selling point for students

In 1987 Paul O’Neill became the CEO of Alcoa. Taking over the helm of a company usually means making grand statements about finances, about cutting costs, and change the investment priorities. But what O’Neill did at his first investor press conference was a little different.

To improve productivity in organizations you need only get leaders out in the field

The controversial Koch brothers wrote a book called the Science of Success (2007). I don’t recommend you read it as it’s one of those books that successful people write where they think they were successful because of these management techniques, whereas it’s more likely that because they were successful they could try out these management techniques (fads of the day?).

According to the ASTD’s 2013 State of the Industry Report, U.S. organizations spent $164.2 billion on employee learning and development in 2012. The report does a good job of categorizing and classifying expenditure. But what about ROI? How can managers structure training to ensure a positive ROI?

How often have you rolled out a new IT project that failed to deliver the desired benefits? Most projects fail to deliver benefits because of poor change management. Little to no attention is paid to the people side.

From the Vault

All too often, I hear that lean management is about cutting waste. Companies that stop here, however, are missing a big trick. Going further than cutting waste – creating improvements that benefit customers, shareholders, and staff – and seeking continuous improvements thereafter is the ultimate ambition of lean.

You can streamline your business and reduce process complexity by using process maps to identify the critical and the unnecessary areas in the maps. By identifying steps that add no value, or that lead to errors, you can remove or improve these to streamline your business and improve profitability.