Change Management

What is change management?

All businesses must adapt to changing customer needs, technologies, market conditions, costs and competition to remain effective. Change management is the practice of managing the impact of these changes on your business’ people. 

Why do change programs fail?

According to McKinsey 70% of change management programs fail. The largest single factor is poor internal communication. Take Daimler’s failed ‘merger’ with Chrysler. What seemed like the ideal marriage of complimentary products and market presence failed. Why? Chrysler’s more relaxed management approach jarred with Daimler’s formal, numbers-driven ethos and whatever communications strategy was in place failed to bridge the gap. Consequently the companies shed shareholder value and split seven years later, in large part because Chrysler’s employees felt too disenfranchised by Daimler’s hierarchical style of decision-making.

Why does change management matter more now?

Rapid technological advances now prompt increasingly unpredictable change. To cite a less unpredictable case, the U.S. Postal service has shed 200,000 workers in 10 years as it struggles to match its competitors’ cost efficiency and diversify away from a product largely substituted by email. Its top-down communication culture and failure to listen to its people has prompted many experienced people to quit, leaving novices in charge of critical operations and thus exacerbating its decline.

Established businesses need to get better at change management, and fast because there will be a lot more of it in the years to come.

Seven lessons for successfully managing change

Here are seven things that we have learned while helping organizations save money and become more profitable:

1. Change management is first and foremost an organizational capability, not a set of tasks or action points. Its processes can change. The skills required to succeed do not. Foresight, planning, project management, analytical firepower, managing expectations, empathy, patience, perseverance, tactical flexibility and strategic mindset are the basic building blocks. These skills must be present throughout the organization to succeed.
2. Change management is hard because your people are likely to react in one of four ways and only one of these helps you to succeed:
   1. The critic – who opposes the change
   2. The victim – who panics
   3. The bystander – who ignores the change
   4. The navigator – who rises to the challenge.
      Part of the challenge is to turn critics, victims and bystanders into navigators. Biting back at your critics, belittling your victims and ignoring your bystanders makes it harder to embed the change. Over time, most dictatorships trend to discover this fact – to their cost. Instead you need to work out which of your critics’, victims’ and bystanders’ interests runs counter to your proposed change and address it.
3. Failure to get your people to change behaviour in support of a change initiative is the result of one or more of the following barriers:
   • They fear that it is too hard (train them)
   • They fear loss of control (show them)
   • They lack visibility of other people like them who are already doing it (connect them). Understand the barrier and you can segment your audience base more effectively and communicate accordingly. As a result it is usually best to survey behaviour change over personal preference. For example asking your employees if they prefer to receive information about the company on channel x, y or z will yield mixed results that you can not act upon. Asking employees what they did (or not and why) after receiving some information on channel x, y or z is more actionable. Act upon what you know and observe, not on your view of your employees’ perceptions.
4. Change itself has become a constant so the nature of buy-in needs must now adapt. The promise implicit in buy-in used to be that things would ‘go back to normal’ after the event. Buy-in now requires a growth mindset as change has become continuous. Acquiring it and keeping it under the promise of ‘go back to normal’ no longer works. Change communication needs to switch on your people’s desire to want to learn new things. Some might say that this even makes ‘change programs’ an anachronism. I would agree since projects imply a fixed end point, a ‘new normal’. That said, I have yet to experience a viable substitute.
5. Organizations need to articulate the risks of not changing to their people at the start of the process and throughout its life-cycle. If a good business plan can convince the decision-makers to go ahead its message must also be communicated clearly and often to anyone affected by the change. This is key to getting your critics and bystanders to become navigators.
6. Nobody likes other people making decisions that impact them without their prior consent. This is particularly true of large, global businesses where decisions made in one part of the world impact people in another. Think again of all those failed dictatorships. Complex change programs require the front line to take ownership and behave in new ways that support the overall goal. If you foist the change upon them and tell them what they need to do differently you will either create cognitive dissonance or worse still, active resistance. In my experience variances in power distance, uncertainty avoidance, individualism, masculinity or long- vs. short-term orientation matter less than the simple fact that people get upset if you do not consult them about changes that they perceive as impacting them.
7. Try to minimize the perceived uncertainty by leading with the things that will not change. This will help to allay your victims’ concerns as well as provide context.

About Change Management expert Wylie Rogers

Wylie Rogers has 20 years of experience in North America, Europe and Asia, having worked in politics, the media, business and management consulting.

Wylie was previously the head of public affairs for BASF in Asia Pacific, a US$ 10 billion business, overseeing 15 countries in the region while based in Hong Kong. He also headed ABB Group’s corporate communications team in Beijing, China, a US$ 2 billion business, and had roles ranging from spokesman to speechwriter and head of copy for the ABB Group in Zurich, Switzerland, a US$ 30 billion business. Before moving abroad, Wylie worked as a reporter and speechwriter in Canada.

Wylie attended INSEAD in France and Singapore for executive development and has a BA in English Literature with Honours. He did his post-graduate studies in journalism and has volunteered with the International Journalism Federation in Phnom Penh, Cambodia. As President of The Tantalus Group Wylie manages the global network of Tantalus management consultants.

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