Change is in the air

We are constantly told to embrace innovation, to seek it out, to create it: it will be our salvation. We must innovate our products, our services, our processes and even our business models. It all amounts to a mountain of change, often of a very disruptive nature.

The ability to manage change effectively is increasingly important, yet here we are in the early 21st century and we are still pretty bad at managing change.

Some analysts put the failure rate of change projects at 70 per cent. But before we explore why we are still so bad at managing change, let us look at what change is.

The change we are referring to is any organisational, structural, behavioural, product or service change within an organisation. It is a very broad spectrum, ranging from fine tuning small things to restructuring an entire business.

Carmel McConnell, author of Change Activist: Make Big Things Happen Fast, is concerned that too much activity goes under the heading of change, so perhaps it is important also to say what change is not.

She says there is a difference between managing change in an organisation and having a growth strategy. ‘If the board wants to go from having no presence in Uruguay to having quite a lot of presence in Uruguay, that is a growth strategy. Do not manage it as a change implementation,’ says McConnell.

‘If you are moving from one office to another project, that is not change management: that is housekeeping. Change is when you are adding more value to the organisation and supporting the growth strategy.

‘So it has to be market-led. It has to have a purpose, linked to giving the company a unique selling proposition.’

Change management, as a distinct discipline, emerged in 1930s USA when Kurt Lewin began studying the behaviour of children. Lewin found when you bring kids together as a group and tell them what to do, they start arguing among themselves.

If you sit them down and say: these are the tasks, how should we do it in a more democratic way, they will co-operate and things move much easier. From these studies, Lewin developed the idea that behavioural change in groups needs to be a process with all-round participation.

In the 1940s, Lewin began working with organisations to develop an approach to managing change. From here developed Lewin’s famous three-step model of change: unfreeze, move, refreeze.

Bernard Burnes, professor of organisational change at Manchester Business School, says that although the model gets a lot of criticism, it does work very well.

And if you want people to change their behaviour, you have to find some way to unlearn the old behaviour. You also have to find a way to reinforce the new behaviour, else it will be lost.

‘It is about encouraging people to change their behaviour and for that behaviour to stick,’ says Burnes. ‘I would defy any chief executive or senior manager not to be able to give me examples where they have made changes in their organisations, the staff seem to have made changes in their work and six months later they come back and the staff are doing exactly what they did before the change.’

The problem is that change initiatives too often focus on the methodology, the technology and the processes. A few training courses are thrown in – and that is the people aspect of change dealt with.

It is not about machines
One of the most fundamental reasons that change fails – whether it is technology-driven or otherwise – is that the full extent of the change on people’s values and behaviour is not appreciated early enough and, therefore, is not catered for early enough, says John Mahoney, worldwide chief of research at analyst Gartner.

Machines do not mind change, it is people who have a problem with it. Psychologists know that humans prefer the habitual and the routine to the novel. Our lives run on rhythm and predictability. That is not to say we do not all want a bit of change now and then, but it is a question of control – who controls the change?

McConnell says that there is a direct correlation between how stressed you get at work and how much control you have over your work. ‘Most people are not going to feel overwhelmed or stressed by change if they feel they have a level of control and can choose how they are going to engage with the change programme,’ she says.

If people are dissatisfied with the way their organisation is running at present, that means there is a willingness to change, but the trick is to bring together the changes that you want with the dissatisfaction they bring. That way you move forward, but only if you involve staff in the discussion from an early stage.

McConnell says people will do a lot if they understand the purpose. ‘I hate to quote Nietzsche, but he said that if you have a big enough “why” you can get through any amount of “how”.’

But McConnell says the why is very rarely explained. ‘For example: “Why do we have to do this? Because the CIO says we have to do this. Yes, but why?” You have to have enough respect for your employees and other stakeholders to say this really is about making a bit more profit and this is what is in it for you,’ she says. ‘It might not be very much, but if you want to engage people, you have to be honest.’

Mark Shaw, a partner at consultant Deloitte, says it is crucial to recognise that technology is inanimate. ‘It is a big calculator at the end of the day. You can figure it right or you can figure it wrong. And if you figure it wrong, then you can put it right,’ he says.

‘It is quite binary, whereas the people aspect is not binary because there is a rational attachment and an emotional attachment. There are components that go wrong in every individual to a certain degree – and that is what makes business change and technology-enabled change transformation programmes so difficult.’

Shaw says that any big transformation programme is at heart not a technology-enablement programme, because there will be very capable technical people designing very capable processes. It is the way they are adopted, accepted and used by the user communities that determine their success. ‘The bigger a computer-based programme, the more emphasis I would put on it being a people-change programme,’ says Shaw.

And despite being over a decade old, change management associated with IT projects continues to be a challenge with more than half failing or delivering unsatisfactory results.

Michael Barrett of Judge Business School has studied the problem and concluded that, among other things, the scope and complexity of change projects has grown dramatically with larger information infrastructures now involving a number of stakeholders across organisations.

‘This requires new approaches, a new engagement model to conceptualise and manage new techno-change initiatives,’ he says.

Barrett says engagement and participation across multiple stakeholders is increasingly important for success, given the scope of today’s information infrastructures.

The first thing to do is examine and assess the problem and to do that you have to involve the people on the ground. Manchester Business School’s Burnes says the problem with being high up in the organisation is that you see the blurred landscape, rather than specific detail. ‘In change programmes you often need the broad picture and the detail,’ he says.

Know your stakeholders
Despite the fact that most senior managers will tell you they are soft and cuddly and believe in empowerment, the people at the top think that once they have made a decision everybody should fall in line.

‘You have to realise there are formal decision-makers and informal influenc ers, both of whom you need to win over,’ says Burnes. ‘In every office and every factory when there is an issue, there is a person with formal authority – but often, people are looked to for a lead. And these are the people you need to win over.’

Burnes says that in every organisation there are about five people that you need to win over if you are going to get agreement to make changes and there are five people who could block changes if they decide to stand up and be awkward – and they are usually not the same five people. A person in charge of a change programme, it is your job to know who those people are.

Gartner’s Mahoney says one of the most critical things is to recognise that there is no single person who on their own can make the change successful. ‘But there are many single people whose failure to engage will cause the change to fail,’ he says.

Deloitte’s Shaw believes that senior executives are the easiest to deal with when it comes to change because their decisions tend to be more rational, coming down to whether there is a good business case or not. The middle-management team, on the other hand, can have a very different perspective, taking a more specific view about what is happening to their area of the organisation.

‘You can also have various degrees of motivation,’ says Shaw. ‘You have the management team asking: “what are you doing to our empire” and staff can become very nervous if one of the outcomes of the contract transformation programme is headcount reduction or consolidation.

‘Understanding and identifying those stakeholder groups is absolutely critical and how each one of those groups understands, is involved or is just kept aware of what is going on is critical. Each group has a different agenda.’

How to succeed at change
So what is the key to successful change? Burnes says you are going to have to be quite fanatical. ‘You will find an obsessiveness in companies that are good at change,’ he says. ‘And the obsessiveness is not just in senior management, it filters all the way down. Japanese organisations are obsessive about culture, it permeates them.’

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