Change or Die
October 2010
A longtime mentor of mine, when confronted
by protests over ambitious growth goals, had a very simple response: "Grow or
die." His rationale was that failure to grow meant stagnation and stagnation
meant the competition would soon overtake you. Organizations that fail to recover
from that kind of stalled growth eventually face extinction—or acquisition.
by Corbette
Doyle
The same analogy applies to change. Fail to master shifting customer demand,
economics, or competitive landscapes and most companies will fall into a death
spiral. And it's not just these macro-level issues that can derail us. We face
change challenges almost daily as our organizations implement new business processes
or technology, revamp product lines—or bring in a new boss. Poor project implementation
may not kill a company, but it can certainly kill a career.
Unfortunately for Hem and Haw of Who Moved
My Cheese, globalization, the lingering impact of the financial crisis,
and the rate of technological change (which is so rapid that what we teach an
incoming freshman about technology is outdated by their junior year) is accelerating
dramatically. In a
2008 IBM survey, 83 percent of CEOs said they expect substantial change
going forward.
So? Change Is All Around Us. Big Deal.
It is a big deal, especially when you
look at the track record. Most organizations don't "do" change well. In fact,
The Conference Board estimates that 75 percent of large-scale change efforts
fail to achieve the desired results. I don't
know of a manager—or a parent of a school-age child—who would accept a 25 percent
pass rate as good news.
What's a change agent to do? Master the art, and science, of effective change
management. Ongoing research and CEO surveys by IBM indicate that, while the
majority of change efforts may not succeed, some people are "change champions"
who succeed the vast majority of the time—which means the failure rate for the
rest of us is even higher. What are some of the key things these change champions
do? Per IBM's 2008
Enterprise of the Future study:
- Establish strong company values to guide employees in volatile times.
- Hire, position, and reward innovators who challenge the expected.
- Operate like a venture capitalist: cultivating a portfolio of fledgling
ideas, nurturing the promising ones, quickly weeding out the ineffective
ones.
Strategy for Implementing Change
Before you rush out and embrace the IBM tips, you might want to diagnose
your organization's environment. Key issues identified by Clayton Christenson
in "Tools of Cooperation & Change" (Harvard Business
Review 85, ed. 5 (Oct. 2006)) include the degree of consensus on cause
and effect and the extent to which there is goal alignment. If low on both,
use "Power Tools" like fiat and threats. If high on "Cause & Effect" but low
on goal alignment, use "Management Tools" like training and standardized operating
procedures. If goal alignment is high but consensus on Cause & Effect is low,
apply "Leadership Tools," like salesmanship or charisma.
The analysis for organizations high on both is, at first, counterintuitive.
These high-high firms tend to have very strong cultures and are the most resistant
to change. Think Apple computers when the board replaced Steve Jobs with Scully.
It was a disaster because most of the employees were very happy with and loyal
to Steve Jobs's vision for Apple. Ultimately, the board had to bring Jobs back
and the results are obvious, even to die-hard Microsoft fans. In situations
like this, Christensen recommends focusing on changing the culture through storytelling,
establishing new rituals, and adherence to democratic principles.
Many, if not most change initiatives, start out strong only to meet resistance
and/or unexpected hurdles. The all too frequent result is that the
change effort sputters and then begins a downward death spiral (Eric Beaudan,
"Making Change Last: How To Get Beyond Change Fatigue"
Ivey Business Journal (Jan./Feb. 2006)).
How do you counteract the potential for change to stall and for fatigue to set
in? Some of the best advice has been offered by John Kotter, author of the book,
Leading Change (1996), and the
Harvard Business Review article of the
same title.
Kotter describes eight critical steps in the change implementation process.
First and most important is to establish a sense of urgency. This is the step
that derails most change initiatives. Unless people believe the change is critical
to the organization's success—or their personal success—you won't gain the commitment
of time and energy needed to see change through to success. The other critical
steps Kotter identifies are the following.
- Creating a guiding coalition that will help spread the word and provide
support.
- Creating a change vision (note: this is the third step,
not the first).
- Communicating the vision, something that needs to be done repeatedly
and in multiple formats.
- Empowering others to act and to react as hurdles arise; celebrating
short-term wins because change takes a long time and celebrations are necessary
to maintain motivation.
- Consolidating and institutionalizing those wins as you move forward
to implement additional rounds of change.
How To Be Better at Handling/Leading Change
Lombardo and Eichinger, principles at Korn Ferry's Lominger subsidiary and
authors of The Leadership Machine (2002),
identify eight critical leadership competencies that are in short supply. They
are, in order of importance and scarcity:
- Strategic agility
- Dealing with ambiguity
- Creativity
- Planning
- Innovation management
- Building effective teams
- Motivating others
- Managing vision and purpose
Which of these isn't critical to Kotter's change management process? Hmm.
Is this a trick question? Not really, though the answer isn't very appealing.
Every one of these hard-to-find-in-the-workplace competencies is critical to
effect successful change. No wonder the change "pass" rate is only 25 percent.
There are, however, things you can do as an individual and as an organizational
leader to enhance your capacity for change.
Lominger's FYI materials are very
helpful, as is
Microsoft's competency website (note: though established for educators,
the content is very consistent with the Lominger advice). Organizational change
is not easy; personal change is perhaps more difficult. As with most strategies,
the key is to identify the gap (360 feedback can help), establish goals, implement
a plan (see resources above for both of these steps), and follow up frequently
to assess the progress you are making.
Opinions expressed in Expert Commentary articles are those of the author and are
not necessarily held by the author's employer or IRMI. Expert Commentary articles
and other IRMI Online content do not purport to provide legal, accounting, or other
professional advice or opinion. If such advice is needed, consult with your attorney,
accountant, or other qualified adviser.