Change requires every tool at your disposal

Change is hard. Changing any organisation, making them more productive, dynamic or merging them with another companies – these are some of the toughest jobs for managers.

Most change management programs fail. Former Harvard Business School professor John Kotter found that 70% of change management programs don’t work. A subsequent study by the consultants at McKinsey found that his numbers were right. McKinsey identified several reasons for the high failure rate. First, what motivates management does not necessarily motivate employees. Also, employees will resist if they feel the changes violate notions of fairness and justice. Money is the most expensive way to motivate employees. Indeed, small, unexpected rewards have disproportionate effects on employees’ motivation during change programs.

McKinsey also found that when employees themselves are involved in developing the change process, they are more committed to the outcome by a factor of almost five to one. This is critical because every change management program needs total buy-in from everyone. That can be a problem. Many people in the business might be threatened by change. They might worry about losing their jobs, or their power or perks.

Kotter advises managers to urgently establish a coalition of staff and managers to guide the process and bring people onside. What’s important here, he says, is to create a vision about what the organisation could be and sell this.

It is important to use carrots and sticks, to reward those who follow through on the vision, hire people who can implement it and get rid of the ones who refuse.

According to business advisors at NAB, managers need to act early. If the change is risky, they should run a pilot project and evaluate the results to identify any necessary adjustments before rolling out the full project. They need to set a timetable to phase in the change. That would allow the managers to identify problems as they emerge. If they have to sell the change to reluctant employees, it’s a good idea to explain the benefits and make people understand the costs of not changing. They should also point to examples of successful change carried out in the past by the company or its competitors. It is important to be inclusive and talk to everyone who will be affected, including clients and suppliers.

Importantly, they need to communicate clearly and often.

It is also important to make the goals concrete and measurable. Managers should not be afraid of using peer pressure to create role models and encourage those who are recalcitrant to get with it.

Some businesses use psychological profiling methods like the Birkman Method to set the scene. This is a 298-point personality assessment tool that looks at such areas as how people deal with relationships and tasks, what their needs are and how they cope with stress.

Other ideas include changing the way the organisation communicates with staff. Companies might make greater use of the intranet. They might hold forums where managers meet with staff to get feedback. Some change the office layout, introducing for example larger areas where people can meet and talk or hot desking.

It takes a lot of personal resilience. Chances are it will not go smoothly. You might lose valued colleagues. You’ll probably have to learn quickly how to work with fewer people and resources. You will also need to know how to network, coach and manage others’ uncertainty. And that, for many, could be a completely new skill set.

Leon Gettler is a senior business journalist who writes for a range of leading newspapers and journals

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