What Makes Your Key People Leave During Organisational Change?

What Makes Your Key People Leave During Organisational Change?

It’s the question that perplexes senior management: why do key employees leave during organisational change? Having set out the reasons for change and the benefits that will come to every employee group – and individuals, too – it is too often assumed by senior leaders that all their people, especially executives and managers, will buy in to the change process. However, periods of organisational change still tend to be those when staff turnover reaches its height.

Here I examine a 2008 study by Dr Liz Jones (Griffith University) et al, which highlights the influences on employees’ perceptions and reactions to complex organisational change.

Organisational change cuts into employee perceptions of reality

The study by Dr Liz Jones et al involved more than sixty people within an organisation that was undergoing a complex and large-scale organisational change, which included downsizing, a change of location, and implementation of multi-disciplinary teams. Those surveyed cut across all levels of the organisation.

Organisational change affects everyone in different ways and at different times, though within some groups of employees there are common denominators (both negative and positive). For example, change leaders who approach change by providing a vision and direct support to employees and model the new required behaviours are more successful in challenging resistance to change. Such sponsorship behaviour helps to build trust and commitment during a time when anxiety and tension is heightened.

One of the key issues during a period of change is that of the perception of change itself. Some employees will find it hard to adopt new processes and procedures, and adapting traditional ways of thinking is difficult when the old ways have been engrained perhaps through decades. It may be that employees perceive the change as destroying years of history and success. This results in a perception that realities are being destroyed in favour of new, untested methods that will lead to ruin. This is why change leaders need to lead by example, as positive reinforcement for the new culture.

Employees focus on negative aspects

It was found, too, that employees tend to focus on negative aspects of organisational change. This is most prevalent when change is considered large scale and all encompassing. On the other hand, when change is made incrementally, management tend to involve their people: this engagement leads to positive attitudes toward change. The message is clear:

More involvement in the process of organisational change engenders greater positivity about the change.

Three categories of employee dissatisfaction through organisational change

The study found there are three categories of issues associated with change. The first of these was emotional effects; the second, the changing process; and the final category was outcome effects. When considering the effects of change, breaking into these three categories helps change leaders to realise the impacts of change on their people.

The emotional effects of change on employees

Perhaps surprisingly, employees were keen to discuss the positive aspects of organisational change, and more so than the negatives. This was especially true where employees felt involved. However, they also spoke about the difficulties of facing change, and of the fear they held personally about downsizing and altered job responsibilities. Supervisors reported strong resistance to change among their people. Employees reported supervisors who did not react well to change.

Of all the uncertainties mentioned, job uncertainty was the most feared, though uncertainties about structure, strategy and values also played a key role in resistance to change.

The effects of changing process on employees

Employees, at all levels, expressed dissatisfaction with the process of change. In particular, angst was voiced at the perceived lack of communication and the ensuing lack of involvement in the change process. Those questioned said they had not been given enough notice, and limited ways to understand the change better.

Supervisors expressed views that they had given plenty of opportunity for discussion and fully communicated the need for change and the processes to be followed, explaining informational communications such as notice boards and telephone numbers for concerned employees to call. They also reported a lack of preparation for the management of change, and a lack of clearly defined planning.

The effects of outcomes on employees during organisational change

Of most concern to employees was the uncertainty around reductions in staff numbers and redefined job responsibilities for those that remained after the organisational change had been completed.

Who worries about what during a period of change?

The study clearly highlights the focus of concern of all involved: uncertainty. When people are uncertain of the future, they become resistant to change. They question values, become anxious about changing job roles, and are restricted in effectiveness by concerns over job losses.

Executives were typically more concerned about structural uncertainty, while supervisors and ‘shop-floor’ workers were generally more concerned about job security and promotional prospects post the change.

When it came to issues of process, all levels of employees mentioned communication as a key to alleviate uncertainty. However, executive-level staff discussed the change and its implications more fully, and together with managers and supervisors they appeared to focus more highly on the positive aspects of change. These executives also spoke about the lack of involvement in change by lower level employees.

These lower level employees highlighted the negative aspects of change communication, citing this as a key driver for resistance to change.

Executives were positive about change leadership, while supervisors held it in a negative regard (reflecting the different perceptions of the communicative process).

Executives were the group most concerned about high-level outcomes, while non-supervisors were least concerned. Executives spoke most about service improvements and job enrichment, while non-supervisors disregarded this almost completely.

Know where the problems lay to tackle them

This research showed that executives through to non-supervisors have different concerns through organisational change. Change leaders who recognise this will be better able to build strategies to retain key employees at all levels:

  • Executives are most concerned about the process of change and the expected outcomes
  • Supervisors are most concerned with the process of change, and how to implement towards expected outcomes
  • Non-supervisory employees are more concerned with the emotional effects of change, and their focus was more negative

Having this level of knowledge of the key concerns and issues experienced by their people will enable change leaders to develop positive employee retention strategies during periods of organisational change. In my next article, I’ll look at some employee retention strategies that work during organisational change.

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change management and innovation and leadership

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

From left to right: Shaun Ansell, Wardekken Land Management Australia; Singwanga Matambo, a Namibian Parks Ranger; Nigel Gellar, Wardekken; Dean Yibarbuk, Wardekken. … Powerful tool for battling climate change.

In part 8 of our Tracking the Trends feature, Australian Mining examines the issue of geopolitical risk for miners in different parts of the world, and the pros and cons of each region. … “Given mounting levels of volatility and change, miners need to take a broader view of risk management and scenario analysis,” Deloitte Southern Africa mining leader John Woods said. “This includes taking a much greater range of variables into account to inform their decision making,” …

The Report on Approaching Change Management at Virgin Australia describes the change cycle at Virgin Australia, starting from assessing the need for change, to defining strategies and implementation, measuring results …

​Gorog has extensive experience in business management and has founded a number of successful start-up businesses, including Outware Mobile, He is currently a Director and Board Member of Melbourne University …

Innovation News

In striving to build comprehensive and sustainable enterprise innovation programs however, too often I see companies then ignoring the need for diversity – both in the reach and composition of their programmes. We are long …

The impressive range of entries in the Best new new brand or business category of the World Food Innovation Awards 2015, highlights a number of important trends.

Horn Farm Center Wins 2015 Nonprofit Innovation Award for its achievement in Management Operations with implementation of CiviCRM (an open-source customer resource management software solution) concurrently with …

innovationXchange, launched this week by the Department of Foreign Affairs and Trade, aims to support innovation across the Australian aid program by leveraging new sources of financing and catalysing new approaches to …

Networking giant Cisco plans to open an Internet of Everything Innovation Centre in Australia this year, which the company said will house experts in the Internet of Things and help catalyse IoT innovation in the region.

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

In the business world, there’s a pretty typical organizational structure and management system. President or CEO at the top, and then a slow downward trickle in both power and salary until you reach the pencil-pushing, entry level positions at the bottom of the ladder.

How do you manage risk in a business setting? How do you encourage creative productivity and risk-taking without taking on too much uncertainty? What is innovation with applied creativity? Although it will be almost impossible to constantly hold yourself and your employees right at the centre of the balance, there are a few tactics that can help improve creativity in a business.

How to Manage Change for Successful Acquisition Management

How to Manage Change for Successful Acquisition Management

In my last article I highlighted the damaging effect of culture clash within a merger situation, and how poor change management strategies directly lead to the failure of mergers to live up to their original promise. In this article, I look at some strategies that will aid change leaders within the context of change management post acquisition.

Understanding the change management dynamics post acquisition

Perhaps the most significant period of change, and certainly for employees, is as a result of an acquisition. Change management must be flexible during this time, and executives must accept that, just as no merger is exactly like another, so, too, must specific change management strategies be identified and suitably customised by change leaders.

When a merger is announced – or even merely considered – rumours run amok and emotions become highly charged. Nervousness and fear will be evident in all parts of the merged companies. Change leaders will need to plan in advance for periods of rapid change, with little room for error in achieving deliverables. Major problems are caused when management fails to live up to expectations, or posts expectations that are simply viewed as out of reach. Indeed, change management through a period of merger should begin at first announcement and continue throughout until full integration has been achieved.

Set the bar when the merger is announced

The usual merger announcement is accompanied by details of the benefits the merger is expected to produce. These benefits are usually couched in financial advantages to shareholders, with little mention of benefits to employees. Often there are promises of no change in personnel or workforce. The problem with this type of announcement is that employees simply don’t believe the rhetoric. Then, when executives leave or workforce is downsized, even further mistrust is embedded.

As the merger takes hold and the inevitable changes start to happen, people will refer to the merger announcement to back up their claims of the dishonesty of the acquiring company and new management team.

People know there will be change during and after a merger. They are not stupid.

It’s far better to be open and frank about how the merger will unfold, and to be so as early as possible. Goals should be set, teams and individuals spoken to, and relationships fostered early on.

Let people know how the merger will affect them directly in an honest manner.

Managers also set the bar too high. They allow people to hear and believe unrealistic expectations, which fail to be realised. Again, this affects trust in the longer term. People become insecure, and attempts to reassure will fall on deaf ears. Resistors are given ammunition in their fight against successful outcomes: either it will be stated that employees have been deliberately ‘hoodwinked,’ or taken as management ineptitude that bodes ill for the future.

Credible management requires a realistic approach by management towards the business and its people, and realistic announcements. Don’t leave room for surprises on the upside or downside.

People appreciate honesty. Let people know about how the merger will impact them, and trust them to handle the truth. Don’t focus all communication efforts on good points; keep the message balanced.

Personal and team insecurities during the merger process will lead to managers being pushed by employees for answers. Change leaders should never make promises that cannot be kept. The first time a promise is broken is when all credibility is lost.

Change management has to be fluid during the merger process, and change leaders should let people know that things will constantly change as end goals are worked towards.

Corporate culture and acquisition change management

Ingrained corporate culture impels people to work in certain ways, and adhere to the existing corporate values and missions. Acquisition changes these values and missions, with a new joint mission replacing the old. If people are promised no change, they will naturally become suspicious and lose confidence in the new entity and management when change occurs. The fairness of previous management will be destroyed, and animosity towards the new owners will grow rapidly. Change management must concentrate on the inevitability of change, but allow a positive mentality of opportunity for all within the new organisation.

Six change management strategies for successful acquisition leadership

  • Change leaders will begin winning the culture clash battle by being confident in the future, even though the future may not be explicitly known. The only absolute promise that change leaders can make is that change will happen
  • Throughout the integration process, change leaders will need to keep lines of communication open, and executives should be approachable: it is natural for managers to become less communicative (because they become less well-informed as the future emerges), but this merely produces an environment of secrecy and mistrust
  • Bad news should be disseminated and dealt with as quickly as possible. Don’t let the rumour-mongers take the upper hand
  • Deal with problems as they arise, and never promise the undeliverable
  • Mistakes happen; acknowledge them and admit to them. You’ll be surprised at the added credibility (provided these mistakes are not made from false promises)
  • Make people an integral part of the merger process. Seek their inputs, and empower them with responsibility for their own success within the new environment

To drive change management through periods of dramatic change, such as caused by acquisition, change leaders should embed strategies that deal directly with culture clash and not mismanage a merger as BMW did with Rover.