Posts Tagged “Change Management”

During the course of the reorganization, the president, HR head and Finance head conducted a number of “alignment” sessions with the organization’s top two levels. These sessions were meant to explain the rationale for the change and define the roles of those executives in moving the reorganization forward. Nonetheless, mixed messages were common when those executives spoke to their functions. Just as bad, employees told us repeatedly that senior managers were absent or silent during the most stressful periods of change.

Obvious shortcomings in the vision were, no doubt, a primary driver of the mixed messages. Unfortunately, poor leadership, political maneuvering and an unwillingness to confront unproductive behaviors created far more turmoil in the workforce than was necessary.

In the end, the team knew they had few options in addressing unhelpful behaviors from such senior executives. All the same tactics (those alignment sessions) would need to be employed, with one important addition. At the project’s initiation, the team would measure senior executive support by surveying their functions. Scores would be publicly provided to senior management “in the spirit of transparency.” Of course, transparency was only part of the rationale. Creating a sense of competition and peer pressure would become the safety net to ensure appropriate performance.

There is a continuum along which organizational changes can be planned. On one end are top-down approaches with planning done by small groups behind closed doors. The organization implements what it is told to implement. At the other end is including as many employees as possible in designing pieces of the new organization, and then tasking those same people with implementing the changes they designed. The former is exclusive, the latter is inclusive.

This company took a more inclusive route as it mirrored their culture. Directors and senior managers designed their organizations, level by level, and were then responsible for implementing the design. This choice was intended to take advantage of line managers’ more intimate knowledge of their areas and people, while at the same time building their buy-in to the change process.

The approach’s down side was employees feeling it was taking too long. Impatience led to paralysis.

The team had underestimated and under-communicated the impacts. At the same time management was dealing with business issues (their day jobs) and counseling their teams through the unsettling period of change (which encroached on their daily job performance), they had an additional burden of intensive reorganizational work upon them (a night job).

In short, the team miscalculated the burden on line management. By being inclusive, they passed a burden on to people ill-prepared to accept the challenge.

On the flip side, a more exclusive approach would have taken just as long, and perhaps longer. (All the kinks associated with any reorganization still needed to get worked out.) But, since employees would have had less visibility to the process and less day-to-day involvement with the work, it may have felt shorter.

In the end, the team concluded, “in the future we must carefully weigh the pros and cons of a range of approaches, choose the one that suits us best, build a fully fleshed-out plan, and then aggressively and continually communicate the methodology and its benefits to all employees.”

In other words, there is no correct answer – but whatever choice you make, set people’s expectations accordingly.

Recently, we worked on a reorganization of a business with several thousand employees. The company was splitting itself into smaller organizational units. Our team didn’t set the business strategy or the change plan. But we were the arms and legs to help the project team get the work done.

At the end of the project, the team documented their learnings and some will be shared over the next couple posts. We share them for a simple reason – it is highly likely that other reorganization teams will face similar challenges. The challenges themselves aren’t “secrets;” what created the challenges, where the challenges occurred and how they were addressed are. In any case, here are some real live challenges to plan for as you work on a reorganization.

#1 – Crystallize the Vision and Case for Change

While there were several important themes supporting the reorganization (like “accountability” and “customer focus”), these themes didn’t effectively crystallize into a clear and compelling picture of the envisioned future. Because the vision wasn’t clear, the team struggled throughout the project with several issues:

• Decision making became more complex since there were no clear “stakes in the ground” on which to base priorities. Everything was an ad hoc decision. Nothing was principle based.
• The team was left in a reactive and responsive mode vs. being proactive with a clearly defined strategic goal.
• The team was unable to effectively communicate an appropriate understanding of management’s vision of the future. (The team wasn’t quite sure themselves). When the team did communicate, there were conflicting messages:
  • “This is not a cost-driven exercise,” and “Design an organization that reflects some level of reduction,” or,
  • “Business process management and execution is critical to our long-term success,” and “We can design our processes after we set the organization;” or,
  • “Do it right,” vs. “Do it fast.”

The team’s #1 lesson: “When considering large-scale change, nothing should be more important than crafting an iron-clad and understandable case for change and an engaging vision for the outcome of the change. This includes creating specific examples of how employees would experience the change as enhancing their work lives. Use focus groups to test the vision for how understandable and engaging it is.”

A recent comment on this blog regarding resistance to change led me to try to prove an intuition about the subject. (Meyers Briggs’ intuitives can look like geniuses frequently, but can also look like idiots when those intuitions are wrong!)

According to SHRM’s 2007 study on Change Management, about 70% of major organizational changes encounter employee resistance. The comment stated that typical levels of employee resistance run around 15%. Is there a way to reconcile the two? In short yes. They aren’t mutually exclusive. 70% of reorganizations can encounter resistance – but the resistance can come from only a small number of people.

A 2005 benchmarking study of 411 companies by Prosci identified where resistance to change was most commonly cited. Middle management won the prize by a long shot.

Their study provides common sense insight on why managers resist change:

1. Loss of power and control
2. Overloaded with current responsibilities
3. Lacked awareness of the need for change
4. Lacked the required skills
5. Fear, uncertainty and doubt

The managers’ reasons are far different from the reasons why front line employees resist change:

1. Not aware of the business need for change
2. Layoffs were announced or feared
3. Unsure if they had necessary skills for success
4. Comfort with the current state
5. Believed they were being asked to do more with less, or more for the same pay

Thinking back over the many initiatives I have been involved with, the front-line employee concerns were more easily handled. Provide information in a professional and compassionate way as it is available and you will earn trust, respect and engagement in the change process. The middle manager, however, has always been more difficult to address. Frequently their concerns are well-founded. They are going to lose power or they are going to become more overloaded.

As you work with them to gain their participation in the change, however, it is best to remember the leverage they represent. Getting one middle manager on your side means a whole lot of their people will follow him or her. It is a whole lot harder to convince the employees of a middle manager to not follow their leader’s resistance than it is to get the leader on your side.

I found a recent Business Week article about what happens after the corporate layoffs to be a good example of why Dilbert continues to be such a popular comic.

The article discussed, in a rather glib tone, how interior designers are persuading executives “to do something—anything—with the space where employees used to be” after their downsizing efforts.

Now, I’m all for ensuring the remaining employees stay engaged and recognize the need for extra special care during this time. Heck, I’ve been there. And I’m all for recycling – whether it be paper, plastic bottles or office furniture. But seriously…recommending the newly empty space should be used for quiet rooms, massage chairs and plasma TVs seems a little insensitive. Would employees left behind really find it appropriate that their colleague of 15 years has been replaced by the new plasma screen in the hallway?

Perhaps it depends on what stage of coping the remaining employees might be in at the time these initiatives begin. Anyone familiar with the Kubler-Ross grief cycle understands there are seven stages a person goes through during any type of traumatic change, whether it be the loss of a loved one or the loss of a job. The stages are shock, denial, anger, bargaining, depression, testing and acceptance.

More power to the interior designers who can improve our work environments through creative uses of space, lighting and furniture. But timing is everything. Making these types of changes while employees are in the shock, anger, denial or bargaining stages would most definitely cause negative consequences.

But perhaps it might make sense if done during the accepting stage, especially if the employees are given a voice and participatory role in the reconfiguration of their workspace. This ownership would involve them in shaping a new future, and not in Dilbertizing their situation.

It is fairly predicatable: change teams have challenges developing role clarity. What are the organization leader’s responsibilities? How do leadership responsibilties differ from the management level responsibilties? What is the communicator’s role? What should the communicator expect from leadership?

Here’s a quick review of those roles and their related responsibilities:  http://tinyurl.com/5ov3s5

There are many definitions of “change management,” and Wikipedia’s is as good as any: “change management is a structured approach to the change in individuals, teams, organizations and societies that enables the transition from a current state to a desired future state.”  The contributors to Wikipedia then suggest that change management is then sub-divided into individual change management (addressing the approach of moving a single person through a change), and organizational change management (moving a group of people through a change.) 

Change management is an approach or a set of activities.  If one uses Stephen Covey’s habit #2, begin with the end in mind, one focuses on the expected outcome.  With that in mind, I believe the most important part of creating transformational change is preparing the organization to move, hence the term, “organization readiness” or “org readiness” for short.  The activities are of course very important, but it is critically important to never lose sight of the objective.

Organizational Change Management helps impacted people feel and do the right things through tactics such as communication, training and knowledge management.  Organizational Readiness is different in that it uses those tactics as well as strong leadership, robust participatory programs and a focus on designing efficient and effective work practices.  Organizational Readiness is the operational effectiveness and workforce alignment that results from change management.

Creating organizational readiness for change can be illustrated with a story of our child’s first day at school.  We needed to make her, aka – the organization - ”ready,” as she was about to experience the biggest change in her life to date.

So what did the change leader in us do?  Even though I was not a change expert at the time, I certainly didn’t sit her down on Labor Day and say, “Tomorrow, your role in this family is changing and you won’t be in this house most days.” 

We took a much different approach:

• Through the summer, we created awareness that change was coming, and September would be a new and exciting time.
• Helped her understand what school was.  We took her to the school in late August to see her room and meet her teacher.
• Stood at the bus stop with her, and then drove to the school to meet the bus.  In short, we participated in the process of going to school with her.
• “Measured” and celebrated her success so she would exhibit the same behaviors in future days.

The same concepts apply to creating organizational readiness for change in an adult setting.   Create awareness, enable understanding, encourage participation and measure performance.  (I guess the big difference is in the appropriateness of videotaping each second of the change!)

Unfortunately, many organizations have the Labor Day type conversation and expect change to occur overnight.  Those organizations certainly get change – but not the results they wanted.

If you are accountable for your organization’s change program, there are five steps you need to take to ensure success.

1. Fully understand why your organization needs to change. The reasons behind your organization’s need to change will drive many of your decisions. What are the events placing new demands on your organization? Are these events internally – low employee engagement – or externally – downward shifting economic trends – driving the change?
2. Establish what must be done. At this stage you need to:
   • set a vision for the change project
   • define your guiding principles and imperatives to ensure each decision made or step taken on your path to change is the right one
   • set measurable objectives and goals and determine how you’ll measure your progress
3. Plan how the change will roll out:
   • identify the major actions and timing necessary to achieve your objectives.
   • establish the strategies necessary to reach your vision and objectives
   • identify and obtain the resources you need to achieve the objectives.
4. Align senior managers. Granted, the change was likely their idea, but the execution is all yours. You must have them aligned on the how and when of your program. Do this so they walk the talk.
5. Initiate a measurement program to track your progress and adjust plans as necessary. Provide feedback processes to gather information about your progress, and rewards to engage employees.

Plain Jane change builds on existing skills, work practices and behavioral norms.  It involves going from A to B to C.  Transformational change is different – it goes from A to C without stopping at B.  It’s disruptive and creates ambiguity, confusion and turmoil. 

Here is the test:  Simple change is something you can manage, and you might have to tell your boss.  If it is transformational change, your boss’s boss is involved.    Transformational change stretches beyond the boundaries of what you and your boss can manage and control.  It is transformational change when:

• A CEO has to tell not only the Board of Directors, but set expectations with the shareholders as well.
• A group reorganizes / changes business processes / implements new systems that impact not only the group’s members, but creates significant disruption in other groups as well.
• The way forward has myriad obstacles to success.