You only have to read the newspaper or watch the news on TV to learn about the economic turmoil we are currently facing due to the subprime mortgage debacle and resulting stock market. This is a cause for concern for many organizations regarding their business plans for 2008 and beyond. These external economic forces can drive companies to implement change strategies to adapt to new economic realities.
But for those of us living through the tough economic times of the 1980s and 1990s, we are reminded that at some point the economy will recover and companies had better not make changes that will prevent their businesses from recovering when the economy recovers. Business owners and managers must carefully learn the lessons of the past and avoid the pitfalls of poorly planned change initiatives.
The bottom line is that they need to implement change strategies that are based on proven approaches. Research from Harvard University and other institutions has identified eight critical steps in planning and executing change to minimize pain and maximize gain. These are:
1. Develop a sense of urgency for change.
Usually nothing happens in life until we identify some level of urgency or need. Need is the catalyst for change. For example, we don’t start exercising or dieting until we have a sense of urgency that our clothes don’t fit. It is the same way in organizations; Owners and managers must communicate a sense of urgency to employees by explaining the external forces affecting the organization.
2. Build a guiding coalition.
Business owners and managers cannot make changes alone. They need to engage the key players in their organization who will support and add credibility to the change. If these key players are not committed to moving the change initiative forward, they may be the people who could block the change from happening.
3. Create a vision for the future.
It may seem strange to have this as the third step; however, it is necessary to create a shared vision for the future among the organization’s senior team. Organizations should set specific goals for change based on the pain they are feeling right now.
4. Communicate the vision.
As Conrad Hilton said of the hotel industry, there are only three key rules for success: location, location, location. In the case of change management it is a bit different. The three fundamental rules are: communication, communication, communication. Three critical points that require communication and are necessary for employees to accept the change are:
A. The change is going to happen and it is necessary
B. How the change will affect the organization
C. And how the change will affect employees’ jobs specifically
Without this knowledge, employees will make up their own stories to fill the void, and these will often be more negative than reality dictates. These negative stories will have a negative effect on morale, motivation, and productivity.
5. Activate action.
Senior managers need to outline the vision and goals for the change, but they also need to empower people to implement the change, which is aligned with the big picture, at the local level. They need to provide the tools and empowerment for employees to pick up the imitation and implement the necessary changes.
6. Create short-term wins.
Change is hard work, and therefore managers need to recognize the effort that employees put in to make change happen. This involves showing appreciation and lifting people’s spirits by celebrating short-term victories. This creates a positive momentum that will encourage people to persevere in the change process.
7. Don’t give up
This is important! Many change initiatives fail due to a lack of visibility from top management to support the change. Managers must be held accountable for the results they achieve by making change happen. Research tells us that most change initiatives fail because top managers do not visibly and consistently support the change and keep up the pressure.
8. Make it stick
A change that is achieved must be embedded in the DNA of the organization. This is done by top managers who enforce the change and embed it into the organization’s processes and culture. Going back to the weight loss example, just like when we lose twenty pounds, we must maintain our lifestyle change to prevent it from coming back. Organizations need to maintain the new, healthier lifestyle with constant focus by managers to ensure that backsliding does not occur.
It all sounds relatively simple, however, in reality, it is much more difficult than it seems. It requires willpower, determination and focus on the part of managers and leaders to overcome the resistance it inevitably incurs. Change must be driven. Owners and managers should expect significant resistance from 10 to 20% of employees. It may be better not to focus on the heavy resistor group, but rather to focus on the 10-20% at the other end of the scale who can easily accept the changes being proposed. They must use the people who accept the change to influence others in the organization so that the change is necessary and, in the long run, will be beneficial.
Many organizations use outside change consultants to help guide them through the process. Just as many people attend weight watchers or hire personal trainers to help them achieve their fitness and weight loss change goals, organizations too can greatly benefit from the advice and encouragement of change consultants.