Leading Organizational Change

I spent most of my career in management, leading teams in fast-paced, ever-changing companies.  I have a lot of experience with organizational change. I led teams through reorganizations.  I have also been reorganized.  

Change is often necessary.  Today’s business environment is disruptive.  Enterprises must adapt.  However, the vast majority of change efforts fail to meet their objectives.  According to McKinsey, only 23% of reorganizations are successful..  

Many factors can contribute to a successful change effort.  John Kotter, the Harvard Business School professor, is one of the foremost experts on organizational change, and had developed an 8-Step Process for Leading Change.   

In this article, I share some of the tactical, soft skills lessons that I have learned: 

Understand the Employee Culture

Stan Slapdoes amazing work on diagnosing and understanding employee culture.  Each organization has its own unique culture which is a living embodiment of the collective experience of the employees.   

Unlike the logical, data driven world of management, culture is fed on collective perceptions.  Employee culture interprets events through the lens of its shared, historic experience.  Often, cultures distort and amplify these events.  It is akin to the childhood game of “telephone” or “whisper down the lane.”

The culture favors the self-preservation of its members.  In most enterprises, change usually represents a threat.  Consequently, the employees are usually wary.  

Management culture is different from employee culture.  Senior management often perceives change differently.  Executives, initiating the change often see opportunity.  They expect personal benefit—greater responsibility and visibility.   

Employee and management culture exist in their parallel universes.  Most managers are unaware of this gulf.  They do not understand why employees are skeptical and do not enthusiastically embrace the change the way they do.  

I worked with a company that went through successive reorganizations.  The company conducted regular employee surveys and discovered a large perception gap between the employees, middle-management, and the executives. The results were so dissonant that the executives dismissed the findings.  Consequently, many of the change efforts failed to achieve their stated goals.  

If you are in the position of leading an organizational change—at any level—know your employees and their culture.  Understand them.  The success of your reorganization depends on how they react and respond.  

Consider engaging the employees in the process.  In “Under the Hood,” Stan Slap recounts how Progressive Insurance successfully recast a planned layoff to a voluntary severance program.  There may be reasons why employees cannot be consulted before the change is announced. But including them in the design of the new future state is valuable.  They are the ones that understand “how the sausage is made,” and to make things better. 

Be Empathetic

Empathy is the ability to understand someone else’s feelings based on theirframe of reference. Understanding the other person’s frame of reference is often hard.  It takes effort to listen without arguing (even quietly) or judging.  

Regardless of the outcomes, change is always disruptive.  The disruptions fall along a broad continuum from minor to significant.  

Change several levels up the employees’ chain of command may have a minor impact on the employees. They will want to know and connect with their new leader.  Good leaders will make it a priority to meet and establish relationships with their new teams. 

As change gets closer to the employee, the impact becomes larger.  Having a new manager or joining a new or different team represents significant change. Managers create the primary bond between employee and the organization.  Management changes require the reestablishment of this relationships and building new trust. 

Having a new manager resets nearly all aspects of an employee’s work life.  Things as mundane as arrival and departure times, chit-chat topics, etc. are different.  Substantive changes such as work expectations, management styles, and organizational goals and objectives may be significant.  

Layoffs and significant realignments can be extremely disruptive.  In the case of lay-offs the remaining employees wonder if they will be next.  I have seen people pack their boxes in anticipation of the next wave.  This is not the sign of a healthy environment.

Major reorganizations often result in breakdowns in critical business processes.  In one reorganization, a complex system was established to ensure that work was transitioned from one group to the next. Despite these well laid plans important functions stopped being performed.   Departmental financial reporting was “deprioritized” and no one knew if they were on-budget for over 6-months.

As organizations go through these changes, leaders need to know and understand the impact.  They should listen to the employees.  They should empower employees to be active partners and actors in the change.  

Be Honest

Credibility and trust takes a long time to establish.  According to a survey by Robert Half Management Resources, 75% of employees found that integrity is the most important trait for business leaders..  

Employees know when their leaders are being disingenuous or not being forthright. When leaders are not transparent, they lose credibility that can never be fully regained.

More than once, I attended a meeting where executives informed employees that despite looming storm clouds, the company was not in trouble.  Of course, the storm hit, and the outcome was much worse than expected. Those leaders lost their credibility. 

Being honest and acting with integrity builds trust.  Without trust employees will not embrace or truly support the change effort.  David Mineo describes trust as “the glue that binds the leader to his/her followers and for organizational and leadership success."

Communicate Continuously 

On-going and continuous communication is one of the most critical tools when leading an organizational change.  Often leaders make the mistake of thinking that communicating the change is a one-time event.  

Organizational changes are complex.  Leaders need to communicate regularly about the change.  They should have a multi-tiered strategy that includes: large group meetings, smaller team meetings, and emails.    

Emails are good at broadly communicating basic facts.  Email will not motivate people.  They do not provide a forum for people to ask questions, air their concerns, and feel heard. 

Large group meetings allow the message to be heard by large groups at the same time.  Experienced speakers can use this medium to communicate the message and motivate the organization.  A poorly executed meeting can undermine the change.

Small group meetings can engender a dialogue between managers and their teams.  At this level, specific and personal questions can be addressed. Most employees will be primarily concerned about how the change affects them and their team.  

The message will need to be communicated many times because people are not good at hearing and retaining information.  Even under the best of circumstances, only 50% of a conversation is retained after 24 hours; and another 50% lost is lost over the next day.    Organizational changes are complicated, and we should not expect a higher comprehension and retention rate.  So, we need to be prepared to communicate continuously.

Be Patient and Establish Realistic Timelines

Change takes a long time.  Lou Gerstner thought it would take 5-years to turn IBM around, he admits that he underestimated.  As a leader, establish realistic timelines and expectations.  

Be patient.  Give the change the opportunity to work its way through the culture before executing successive waves.   When you are leading an organizational change, set clear goals and measurable outcomes.  

Recognize that teams and people are disrupted by the change.  It takes months for a team to move through the phases of the Tuckman Model.  Allow the team to reach the performing stage before injecting more change.

Once, I went through a spate of six reorganizations in a two-year period.  Some of the reorgs were handled better than others.  But, the net result was an organization that suffered from change fatigue.  A group that heartily embraced the first few changes became increasingly exhausted and disengaged.   

Leading and implementing organizational change is not easy.  Leaders should recognize that people are what generates value for the enterprise. Taking the organization through a major change initiative requires knowing how people will respond to the change and working with them to get to the other side.  

© 2018, Alan Zucker; Project Management Essentials, LLC

To learn more about our training and consulting services, or to subscribe to our Newsletter, visit our website: www.pmessentials.us.   

Sources:

DeSmet, A., Hennessy, S., & Toriello, M. (n.d.). Reorganization rules that work. Retrieved April 28, 2018, from https://www.mckinsey.com/business-functions/organization/our-insights/reorganization-rules-that-work

DiCarlo, L. (2013, June 06). How Lou Gerstner Got IBM To Dance. Retrieved April 28, 2018, from https://www.forbes.com/2002/11/11/cx_ld_1112gerstner.html#c6be58142574

Employee Culture. (n.d.). Retrieved April 28, 2018, from https://slapcompany.com/employee-culture/

Lee, D., & Hatesohl, D. (n.d.). Listening: Our Most Used Communications Skill. Retrieved April 28, 2018, from https://extension2.missouri.edu/cm150

Mineo, D. L. (2014). The Importance of Trust in Leadership. Research Management Review,20(1). Retrieved April 28, 2018, from https://files.eric.ed.gov/fulltext/EJ1038828.pdf

Robert Half. (2016, October 27). Which Leadership Trait Rises to the Top? Integrity. Retrieved April 28, 2018, from https://www.roberthalf.com/blog/salaries-and-skills/which-leadership-trait-rises-to-the-top-integrity

Slap, S. (2015). Under the hood fire up and fine-tune your employee culture. Retrieved March 14, 2017, from https://books.google.com/books

The 8-Step Process for Leading Change. (n.d.). Retrieved from https://www.kotterinc.com/8-steps-process-for-leading-change/

Tuckman's stages of group development. (2018, March 24). Retrieved April 28, 2018, from https://en.wikipedia.org/wiki/Tuckman's_stages_of_group_development

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