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A Lot of Change But Nothing Changes!

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A Clear and Powerful Way to Implement Successful Change

*This Article forms part of the content explored in the Advanced Management Program

A recent seminar on change was conducted by a large company to inform employees of the major challenges facing the company in the next few years. The course facilitator asked the group of 60 managers and employees what were the major changes they had been experiencing. One of the older front-line employees said in a rather loud voice, “You know, I’ve been with this organisation for over 20 years now and there have been a lot of changes and you know what? Nothing’s changed!”

The laughter that followed that comment along with the 60 nodding heads said a great deal about how successful that organisation had been in bringing about real change. In a few words the old timer told everyone in that organisation they were making a lot of changes but not improving anything.

The senior executive were busy implementing the latest management ideas techniques but were not implementing any of these changes well. The organisation still had a lot of problems and the morale was getting lower. His words indicated that people in the organisation had lost confidence in management’s ability to bring about real positive change.

A poster which hung in the office of the administration section particularly showed the scepticism employees were feeling. It was a poster of Clint Eastwood with a large pistol in his hand, saying “Go ahead, make one more change!”

Without doubt, the environment of many organisations is rapidly changing; internet, mobile phones, the growth of the China market, iPods, increasing customer expectations, ageing workforce, and greater competition are only a few of the huge challenges that face modem leaders.

Organisations have responded by implementing Sigma 6 programs, restructuring, acquiring other companies, downsizing, hiring staff on a contract basis, outsourcing, going to workplace agreements, business process re-engineering, putting in empowerment programs, activity based costing, and introducing many other “good” changes to improve the way the organisation works. Almost every one of these changes didn’t achieve anything near what was expected and were only considered partially successful.

Research into Change Program Success

Research has shown that many change programs have not resulted in the improvements they were expected to deliver and in some cases have actually been a disadvantage to the organisation and employees. Surveys have shown that quality programs, for example, did not deliver substantial improvement. Ernst & Young carried out a survey of 584 organisations in the US, Canada, Germany and Japan that and concluded that very few quality boosting programs have reached lasting and meaningful levels, especially in the United States.

Another study of quality programs by McKinsey found that two-thirds had stalled or fallen short of yielding real improvements. In a survey of more than 300 electronics companies, 73 per cent of the companies reported having a total quality program under way; but of these, 63 per cent had failed to improve quality defects by even as much as 16 per cent.

A number of reasons for the failure of change programs to succeed has been given; lack of senior management commitment, lack of clarity of vision and specific objectives, introducing too many changes, too many different approaches to the change, lack of employee involvement, poor methods of evaluation or lack of demonstration of results are some of the reasons why programs don’t succeed.

In a four-year study of organisational change at six large US corporations, the researchers concluded that the greatest obstacle to revitalising and to changing an organisation was that it was originated or sponsored by a corporate staff group such as human resources or the corporate executive group.

Problems occurred most often when a program was used in isolation as a kind of ‘magic bullet’ to spread organisational change rapidly throughout the entire corporation. Schaffer and Thomson criticise company-wide change programs such as total quality management which put all companies through training and then expect employees to achieve substantial and tangible improvements without specific targets based on real business problems and needs. Change programs of this sort are often seen as irrelevant or, even worse, inhibit real change because they promote distrust and cynicism against a genuine, worthwhile change when it is introduced.

A number of management books have been published which describe how successful companies go about change. Burnes, Kotter and Schlesinger and other writers describe a number of steps that they consider as necessary to implement change. While each author may indicate he or she has captured the unique essential components of change, there are several common key, components that appear time and time again in almost every successful change program.

Programs that have failed have lacked one or more of these components. These key components can be summarised in two diagrams that can be used as effective tools to help understand and implement change successfully.

What is Needed for Successful Change?

For change to be successful, several factors are needed, as shown in Diagram 1. These can be summarized in two major categories. One category is the necessary change elements and the other is factors which provide a catalyst for cultural change. The eight elements necessary for change are a combination of activities and processes for change while the two cultural factors are forces and conditions needed to provide the environment that encourages and supports the change.

These are;

Necessary Elements for Change

  1. Pressure for change
  2. A clear, shared vision & goals
  3. Capacity for change
  4. Actionable steps
  5. Model the way
  6. Reinforce the change
  7. Aligned systems
  8. Evaluation and improvement

Cultural Change Catalysts

  1. Leadership Change Team
  2. Positive Mindshift & Driving Values

The eight elements necessary for change are the factors that are required for any change to be successful. Every change process must have all of these elements to ensure that the change is implemented and sustainable over time. Leaving out any of these elements will result in a stalled, short term or unsuccessful change.

The cultural change catalysts are the factors that are needed to accelerate and permeate the entire change process. These act as boosters to the change process, the act as energizers and motivators of the process. If these catalysts are not present the change process will run into covert resistance, will become distracted or lose energy and fade out.

The Eight Elements Necessary for Change

Pressure for change is necessary or employees will not place a high priority on the desired change. Managers and employees have many demands on their time and have many objectives they are working toward. Unless senior managers take definite action to ensure these changes have occurred, employees will respond to other demands. External pressure to perform can come from sources such as government legislation, political requirements, customer demands, funding cutbacks, or increased competition. Major problems such as customer dissatisfaction or poor quality can result in pressure to change.

Poor performance and costly mistakes can also result in pressure for change. A CEO of a major hotel decided to initiate a major empowerment program because on of their major customers tried to order a drink at their bar and encountered a staff member who adhered to the rules of payment so strictly it embarrassed him. He called the CEO and told him if the hotel staff didn’t become more responsive to customer needs he would take his company’s business elsewhere.

Internal pressure can come about from the CEO setting new directions or employees indicating dissatisfaction by leaving the organization. Without this pressure, the change will become a bottom-of-the-box low-priority change. Performance appraisal systems, for example, are often given low priority because senior managers don’t put sufficient pressure on middle-level managers for them to be carried out.

A clear shared vision and goals are needed to help people understand the purpose for the change and to gain a commitment to it. This vision should have a worthwhile purpose so that people feel their effort is contributing value for their effort.

Employees need to feel a sense of involvement and to identify with the vision rather than a vision statement just being sent to them. Senior managers must find ways to communicate clearly the vision to all employees. Staff need to be able to challenge and test the sincerity and appropriateness of the vision.

If the vision isn’t understood or shared, employees often make a quick start that fails because it is not really understood. In some organisations, managers feel they have a clear vision but this has not been communicated to the employees. Employees are given a poster or small cards to carry in their pockets and are then expected to be highly devoted and motivated by the new vision.

Involving board members, managers, staff and key stakeholders in discussions of the vision, values and strategic objectives helps reach agreement on goals and gains commitment to achieve them. Asking people to find their own words to describe the vision. The concept of ‘strategic elephants’ is a very effective way to help determine strategic objectives.

Strategic elephants, which come from Argenti’s practical approach to strategic planning, are the “threats, opportunities, issues or problems that the leaders of organization or department have to manage well for it to survive, succeed and/or grow.” Spending time with the senior executive and staff to determine the key strategic elephants facing the organization provides agreed areas to focus on and become the basis for strategic objectives and actions.

Wesfarmers, a very successful Australian organization, uses the idea of strategic elephants to define and manage many of their major initiatives.

Capacity for change refers to the resources and skills necessary to implement the change adequately. This includes adequate training and having time to do what is required. Managers need to adequately plan and to budget for the implementation of the change.

Often the cost of resources and training is allowed for, but not the time needed to transfer over to the new way of working. Employees who participate in quality circles often complain their managers don’t give them allocated time for participation in these activities. They lose interest because this new initiative is piled on top of their existing work. Lack of adequate resources, time or skill leads to anxiety and frustration.

Actionable steps and targets give employees specific steps to progress the change and tangible outcomes to work toward. Sometimes actionable steps are referred to as milestones. Many organizations want change to occur but don’t have specific steps and times that they want various stages to occur.

It is especially important to have actionable first steps which provide the opportunity to start on the change immediately. This element s sometimes called ‘encouraging small wins’ and allows people to feel a positive sense of achievement in the beginning of the program. They are then willing to invest more time and energy.

Many change programs fail because management announce a change, such as total quality management, send people off to training programs, and then months to go by before people are required to do things differently. Without actionable first steps, milestone actions and targets along the way, employees make haphazard efforts and false starts.

Model the way refers to the leaders of the organisation putting into practice the values and behaviour that reflect the vision. A senior manager’s actions must be consistent with her or his words or employees will become cynical and distrustful. Managers need to operate with integrity and sincerityso that employees see the actions of their managers as examples of what is expected of them.

If customer service is part of the vision of the organisation, managers have to be responsive, positive and willing to make an extra effort themselves to their internal and external customers if they expect employees to act that way also.

It is vital that the CEO is committed and involved with the change. If the CEO leaves it to others to carry out the change or does not give his or her personal support and time for the change, other activities are given higher priority. Sometimes the CEO may model the way but the members of the senior executive team aren’t don’t support it or walk the talk. It is vital for the CEO to manage the executive team to be committed to the change and to deal with those senior managers who superficially support the change.

The sixth element that is necessary is the reinforcement of the change. This can take the form of reward or recognition from management. Reinforcement can also occur by transferring or demoting employees who continue to resist the change. This can also involve solidifying the change by changing in procedures and processes so that change becomes a regular part of the operation.

Change can be reinforced by memos, newsletters, or posters that provide positive messages or examples of successful change. Reinforcing the change is necessary or employees will revert their old behaviour if a key manager leaves the organisation or pressure to change is removed.

It is also necessary for the organizational systems to be aligned so that the procedures and processes encourage rather than inhibit progress toward the vision and strategic goals. If the systems are aligned then changes can be carried out in line with the procedures and get adequate resources. The reward and recognition systems, the performance management, promotion criteria, communication, customer service and accounting procedures must operate to help achieve and enhance the strategic goals and change management actions.

The last element for successful change is to thoroughly evaluate and improve the change program after it has been underway for a time. Many change programs are not evaluated at all or are evaluated in ways that are sloppy or superficial. As a result, programs are continued or abandoned based on personal feelings, changes in the budget or interest in a new idea that captures the attention of the senior managers. One of the best ways to evaluate a change program is to use a level of outcomes model recommended by Kirkpatrick.

This includes:

Satisaction – This is usually done by questionnaire and assesses participant’s attitudes toward various aspects of the change program. This can include communication, job satisfaction, teamwork, etc.

Learning – This level focuses on what knowledge is acquired and what is learned. This may include reasons for the change, information about processes such as quality tools, or vision statements.

Behaviour – This measures the extent to which behaviour has actually changed in the workplace. This should relate directly to on-the-job performance by individuals and teams that the change program aimed to modify. 360 feedback reports, information on injuries and performance reviews are usually used for this purpose.

Results – This category deals with the achievement of organisational goals. Is the team or organisation more profitable, have lower turnover, greater job satisfaction, fewer accidents or better efficiency in the way it works?

After a change program has been going 12 to 18 months, it is very common for managers, owners and employees to ask “Has this Empowerment Program really improved anything around here?”.  Many organisations have no accurate answer to this question and have invested their time, money and human resources on a change without really knowing if it produced tangible results. Establishing before and after measures is a way to prove the value of the change program.

Cultural Change Catalysts

A Leadership Change Team is a key and vital aspect for successful change. This involves one or more leaders, people with substantial influence in the organization being personally committed to make the changes happen in what ever way they can.

A leadership change team can sometimes include the CEO or a very senior person in the organization who can bring about a major change by their sheer personal influence or position. This can happen where the leader has such presence, vision and communication skills they can influence others to work for them.

William Bratton, who was the Police Commissioner of New York City and then Los Angeles brought significant change these cities which reduced crime and boosted the moral of the police service by his extraordinary commitment to making substantial changes in all aspects of the organisation. The senior managers of the organization play a critical role in making the change effective.

The leadership change team can compromise the executive of the organization with each senior manager responsible for a particular aspect of change (eg resources, cultural change, etc.) or a special change team can be formed which recruits ‘change’ champions, informal and formal leaders throughout the organization, who operate as a planning team, catalyst and reviewer of the change program.

A senior member of the organization, ideally the CEO, should be a member of this group to ensure the change team has influence at the senior levels of the organization. Some training is often needed for this team in project management, how to build an effective team, facilitation and organizational development.

A large number of change programs have failed or stagnated because there were no champions for the change or the CEO or senior executive team was not fully involved or committed to the change process. This leads to frustration and superficial adoption of the change because people are only going through the motions.

Positive Mindshift and Driving Values are the psychological and emotional atmosphere that supports the change program. Many change programs often encounter resistance because staff have a negative mindset and attitude toward the changes. Shifting people’s negativity are essential so that the culture of the organisation supports rather than inhibits the change.

Shifting people to a positive mindset means helping staff become aware of their mental self talk and learn to drop negative thoughts and attitudes. They replace negative self talk with positive self talk or no self talk. If staff can approach the change with a positive rather than a negative attitude their will be a much greater change that the change will succeed.

Some organizations develop a set of values that staff are to asked to live by in when they interact with other staff and their customers. Often these values are espoused but not lived. If organizational change is to take hold these values have to genuinely underpin the type of change that is being carried out and are considered driving values.

For example, if the organization is trying to introduce new services and products, the driving value might be innovation. Organisations such as Woodside and the ANZ bank conducted staff workshops in which they taught staff to look at their attitudes and outlook and provided them with tools and techniques to work more effectively and satisfyingly.

The Advanced Management Program closely examines the most effective strategies to implement effective change in organisations and deepens the understanding of the above points.  To learn how you can use this model to bring about successful change in your organisation, enroll in the 2012 Advanced Management Program.

Ron Cacioppe

Ron Cacioppe is the Managing Director of Integral Development and holds a BSc, an MBA and a PhD. He has taught in the Graduate School of Management at Macquarie University, Curtin University and the University of Western Australia.

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