Change is hard… And leading change is harder.

Every year a failed change costs billions of dollars across the world. With so many theories and models available on the internet, majority of change management or organisation transformation initiatives should have been successful (Well, if not all atleast 50%! ). However studies show that two out of three transformation initiatives fail. Why does this happen?

Human beings are wired to resist. Our reptilian brain warns us to stay out of any new situation, be extra cautious and be wary of uncharted territories to ensure our survival. Now multiply this micro level to thousands of human beings working in an organisation. Our most natural instinct is to avoid change, thereby increasing the complexity involved exponentially.

And this is exactly the reason why a successful transformation effort requires conscious, dedicated, consistent effort towards creating the desired change. From all my experience of driving organisational transformations, I consider the following as the most critical levers of change – I call them the “Deal Maker-Breakers of Change”. 

IS THE VISION CLEAR TO EVERYBODY IN THE ORGANISATION

Simon Sinek’s Start with Why is the first ‘Deal Maker-Breaker’. The last mile in the organisation should able to understand the PURPOSE and END STATE of change. You can further break it down to its critical levers-

Who am I? What do I stand for? What is my identity? What is the value that I deliver best that is my key differentiator?

Caselet : CEO Satya Nadella’s reorganization of Microsoft

Why the reorg was needed: After the phenomenal and long-lived success of its Windows operating system and suite of Office products, Microsoft was struggling to move forward. The gigantic company was stagnant and rife with turf wars between major business units that often viewed each other more as competitors than partners in the same company. Innovation was being thwarted by a toxic environment.            

What the reorganization was: After being named CEO in February of 2014, Satya Nadella undertook a major restructuring of the massive company to do away with the destructive internal competition. Products and platforms would no longer exist as separate groups, but rather all Microsoft employees would begin focusing on a limited set of common goals including:

·        reinventing productivity and business processes

·        building the intelligent cloud platform

·        creating more personal computing

What they got right: As the reorg began, Nadella shared with employees a new sense of mission: “To empower every person and every organization on the planet to achieve more.” He recalled his thought process: “Over the past year, we’ve challenged ourselves to think about our core mission, our soul — what would be lost if we disappeared. . . . We also asked ourselves, what culture do we want to foster that will enable us to achieve these goals?” Prior to the restructuring, employees had been lacking a positive sense of purpose, with the result being low morale and weakened employee engagement.

Microsoft’s greatest achievement has already been realized: to offer the company’s employees a new sense that their work has real meaning. 

COMMUNICATE, COMMUNICATE, COMMUNICATE WITH TRANSPARENCY

Transparency and the volume of communication cannot be over emphasized. Therefore it is my second ‘Deal Maker-Breaker’.

When in an uncharted territory we need lot of comfort, communication, short term certainty and authenticity from leadership. During the change journey, there are multiple layers of communication or rumors floating everywhere, distorting the actual communication. Now multiply this with the impact of external factors if they are not favorable for business. The result is a chaotic environment, which will start becoming more and more toxic.

The only way to nip this at the bud is to communicate- frequently and with authenticity. This serves another important purpose. Whenever any change is to be brought about, we need to internalize the change. The first step to internalization is when people start talking about the positive impacts of change or the end state in every nook and corner of the office.

Caselet : British Airways restructures its entire organization

Why the reorg was needed: British Airlines is the largest airline of UK. It was created in 1974 from four other companies — BEA, BOAC, Northeast Airlines, and Cambrian Airlines — taking to the sky with 215 aircraft supported by 50,000 employees, a level of staffing that was, even then, viewed as precariously oversized. The oil crises of the 1970s shrunk the airlines’ customer base, and its huge staff resulted in massive financial losses. The company soon developed a reputation for terrible service as a result.

In 1981, British Airways brought on a new chairperson, Lord King who noticed that the company was operating very inefficiently and wasting valuable resources.

What the reorganization was: To increase profits, King decided to restructure the entire organization by reducing its workforce from 59,000 to 39,000, eliminating unprofitable routes, and modernizing the fleet. He repaired the airline’s image by bringing in a new marketing expert. Within 10 years, the airline reported the highest profits in its industry: $284 million.

What they got right: Before King began announcing layoffs, he explained his reasons for the restructuring to the entire company to prepare them for the upcoming change. Without his transparency, British Airways could have experienced employee backlash and negative press around all the layoffs. But the chairperson always communicated honestly and frequently to manage the change.

PROACTIVELY PLAN FOR SHORT TERM WINS AND CELEBRATE THEM

Real transformation takes time, and a renewal effort risks losing momentum if there are no short-term goals to meet and celebrate. Most people won’t go on the long march unless they see compelling evidence within a short span of introducing the change, that the journey is producing expected results. Without short-term wins, too many people give up or actively join the ranks of those people who have been resisting change.

Creating short-term wins is different from hoping for short-term wins. The latter is passive, the former active. In a successful transformation, managers actively look for ways to obtain clear performance improvements and reward the people involved with recognition, promotions, and even money. This is very important to let others know that victory is well within reach and gives them the comfort to keep striving.

Tie this back to the organisation culture for recognizing and appreciating new behaviors , link it to the value system of the organisation so the change is institutionalized and not just a by-the-way win. 

Caselet : US Manufacturing company

What did they proactively plan: The guiding coalition at a U.S. manufacturing company produced a highly visible and successful new product introduction about 20 months after the start of its renewal effort.

What went right: The new product was selected about six months into the effort because it met multiple criteria: it could be designed and launched in a relatively short period; it could be handled by a small team of people who were devoted to the new vision; it had upside potential; and the new product-development team could operate outside the established departmental structure without practical problems. Little was left to chance, and the win boosted the credibility of the renewal process.

In summary, if an organisation delivers on these 3 Deal Maker Breakers- consciously, dedicatedly and consistently, success is guaranteed to a large extent. The rest of the battle needs to be fought depending on the organisational, leadership and industry dynamics.

Once this foundation is set, the role of HR as a transformation specialist becomes more critical in partnering with the leadership teams in achieving the new vision.

Source:

1)     Harvard Business Review – Hard side of change management

2)     Tinypulse.com 3)     Harvard Business Review – Leading Change: Why Transformation Efforts Fail