Kirsi Kaikonnen - Professional Development Team Lead, TP3
As you know, we live in a constantly changing world in which organisations must keep up with trends to stay competitive and employees need to stay ahead of the game to show their value. As the popular saying goes, "It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change."
Change management is a growing phenomenon that practically every organisation is working on. Global change management companies Prosci and LaMarsh predict that organisations will focus even more on building change management capabilities in the future as they realise its importance as a core competency. This drives leaders for greater recognition and commitment to change management.
Employees, on the other hand, are regularly asked to adapt to new processes, use new tools, move to new roles and acquire new skills. Some are hungry for change and innovation while others prefer routine and stillness. Change, however, is part of life. This was recognised as far back as the ancient Greeks, when philosopher Heraclitus noted, “The only thing that is constant is change.”
Creating a Plan
Change management is a critical aspect of an organisation’s success when it goes through an extensive transformation like an acquisition or a structural makeover. But even small deviations with a process or tools may require change management. And whether the organisation undergoes a small or an extensive transformation, some employees will be excited and embrace that change while others will be confused, anxious and hesitant. Hence, any organisation that undergoes change should carefully plan how to manage the transition.
When creating a plan for change, a stakeholder from each department should be involved in order to receive input from all business areas. The change process will affect everyone in the organisation but in different ways, and thus a representative from each department should be consulted. Managers should talk to their individual teams and enable everyone to give feedback on the proposed changes.
The Change Curve
The Change Curve, which is based on Elisabeth Kubler-Ross’s model, shows how change is usually perceived. The first stage may be shock and denial as people try to understand what is happening. Then, as they learn about the change and realise that it’s actually happening and why, they enter stage two of the Change Curve, often feeling angry and resistant.
In order to move people to stage three of the Change Curve, where employees accept the change and feel safe and comfortable with the transformation, employees’ fears need to be tamed. Nothing achieves this more than a frank and thorough explanation of the effects of the change. As a result, people will be more curious in stage three of the Curve, and will start to look at the positives rather than the negatives of the change.
For example, a while back I was working on a project when suddenly our team leader and a few team members were made redundant. I felt insecure and disappointed about what happened, and didn’t want to accept the change because we had worked well as a team and become close. However, once I understood why the changes had been made, and as a new member was appointed to the team and we were given new tools to work with, I started accepting the change. It wasn’t long before we saw progress with the project as a direct result of the new tools and the new team member, and I came full circle and appreciated the transformation.
If the transformation is successful, employees will enter stage four of the Change Curve. This is where they not only embrace the change but also look for new ways of working within the new boundaries. In my example, it’s here in stage four that I started inventing new ways of utilising the tools and working more efficiently with the team members.
Key Drivers for managing change
Communication is essential because employees will want to know facts about the change process, what led to the current situation and what is expected of them. Information flow throughout the process is critical to keep everyone up to date, prepared for the future and with less anxiety about any unknowns.
Communication is especially important in the first and second stage of the Change Curve in order to move the employees along the Curve to stage three and four. The more informed the employees are of the transitions through all the stages, the more likely they’re going to accept them and, ultimately, embrace the changes.
A great example of this is British Airways, which went through an extensive restructure in 1981. In order to make the transformation as smooth as possible, the change process was made totally transparent with clear communication. Before any changes were actually made, employees were informed about why the restructure was necessary. Then, throughout the entire change process, communication was regular and honest so that everyone was aware of the upcoming changes and their impact. Today, British Airways is a textbook example of successful change management.
Without flow of information, uncertainty will step in and rumours will start to circulate. The result? Chaos and stress. As Harvard professor Daniel Gilbert explains, “An uncertain future leaves us stranded in an unhappy present with nothing but to wait” because “people feel worse when something bad might occur than when something bad will occur.“
As an example, lack of communication led to major issues when the Bank of America acquired wealth management firm Merrill Lynch in 2009. Due to absence of communication before the acquisition and during the change process, uncertainty among employees was widespread and a number of highly qualified and skilled employees left the company. Even worse, lawsuits were also filed because Bank of America’s shareholders were not informed before the acquisition was approved of Merrill Lynch’s billion-dollar losses. It’s safe to say a number of factors contributed to all these difficulties, but it is certain that the lack of transparency and communication from the Bank’s leaders led to major levels of distrust that ultimately undermined the merger for everyone involved.
Leadership, it goes without saying, is another key driver that can make or break a change program.
To begin with, if the change initiatives aren’t seen to come from senior managers, employees often won’t want to get on board. For that reason the senior management team needs to be completely engaged, driving the change and paving the way for their employees. After all, that’s what leadership is all about.
If we look at Virgin, for example, its success is largely credited to Sir Richard Branson who has built several billion-dollar businesses. Due to his belief, drive and leadership, Virgin has become a strong brand that is successful in the airline, music, financial services, wellness and mobile industries. This fact alone is quite an endorsement of Branson’s leadership skills.
One of the cornerstones of his leadership was apparent when Virgin Media was born in March 2006 from the merger of NTL and Telewest and rebranded in 2007 as Virgin Media. At the time Branson advised the new company’s executives to encourage employees to “think like entrepreneurs” and, importantly, to give them responsibility for their parts in the change process. He believed, as he does to this day, in empowering his employees, leading by example and creating a fun and collaborative culture.
Poor leadership, on the other hand, can lead to an organisation’s abject failure.
Kodak, for example, was a market leader in film and photography for much of its history since being founded in 1888. Today, however, it only has a fraction of the global market share it had in, say, the 1970s. Why? Kodak’s management team failed to recognise digital photography as a threat. As a result of the decline in sales of photographic film and its leadership’s slowness in transitioning to digital photography, Kodak missed the wave of the next big innovation, filing for bankruptcy in 2012. Although it emerged from bankruptcy a year later, it had by then sold many of its many patents and lost its market leader position.
Change is constant, unavoidable and inevitable, but it can be managed with foresight, careful planning and different variables such as thorough communication and effective leadership. The change process may be rocky but as Irish writer George Bernard Shaw wrote, “Progress is impossible without change, and those who cannot change their minds cannot change anything.”
In fact, not only do organisations need to change but they need to change fast. Mark Sanburn, a leadership expert and author confirms “Your success in life isn’t based on your ability to simply change. It is based on your ability to change faster than your competition, customers and business.”
Our change management expertise brings to life business transformation and organisational change for people at all levels of your organisation. To speak to a change expert today, call 1300 658 388 or email info@TP3.com.au.
If you're interested in increasing your own capability to manage change, join our 3-hr seminar "Surviving and Thriving Through Change".
A CASE STUDY
We developed a change management implementation strategy for a State Government agency to support important improvements to the way roads are maintained across the state, saving over $100,000 in the first 12 months. To read the full story, please click here.