It seems that any discussion on organisational change takes one of two lines: either ‘change or die’; or ‘change is likely to fail’.
Statistics like 50 percent to 70 percent of planned organisational changes efforts fail (Centre for Creative Leadership, 2015) or “two-thirds of organisational changes have a negative impact on employee engagement”. (CEB, 2015) don’t help. Nor do the headlines, blogs, seminar and book titles that yell ‘change or become irrelevant’.
What is a leader to do?
Michelle Gibbings (FIML), author and principal consultant of Change Meridian, talked to Insight Edge about leading successful change programs with some of Australia’s most iconic brands, including Coles, National Australia Bank, The Smith Family and Me Bank.
When organisational change occurs, there’s a lot at stake. Not least for the leader: “Organisations talk about it being okay to fail, but in reality, senior executives know that if they have a big failure on their watch it will impact on their leadership brand. If you are trying something you’ve never done before how do you still create a cushion so failing is a soft fail not a hard fail that causes a lot of damage to people around and a lot of wasted money?” asks Michelle.
The challenge is to recognise the risks, anticipate the problems and create change with a complete understanding of its impact: organisational, structural and human
We should also adjust our expectations. Change isn’t lineal. It doesn’t follow a Gantt chart or a flow diagram. It will take unexpected turns, have false starts and failures. It can also ignite a new level of commitment with employees who stay the course and see the results.
Theory versus reality
Change management theory abounds. And it is helpful, says Michelle: “it gives ideas. Where people fall done is where they apply it with no context. They expect change to unroll step-by-step. Theory makes change look sequential and a series of things to get through to an ultimate outcome. It doesn’t work like that. Change is more iterative. There’ll be steps forwards. There’ll be steps backwards. There’ll be things that go wrong.”
Start with the leader
“Leaders need to understand what is going on for themselves personally before they can work with people to manage change.” McKinsey research (published in April 2012) backs Michelle Gibbings up, suggesting that half of all efforts to transform organisational performance fail because senior managers don’t act as role models for change.
Michelle looks at leadership and change through a ‘capability lens’, understanding what is going on with senior leadership team at a personal level and understanding what the skills gap might be. “Leaders are different. Their needs are different and their capabilities are different.
Her experience also supports recent findings by CEB (2015) that a lack of relevant experience of the executive team is a key factor in poorly managed organisatonal change: 60 percent of managers say they’re unfamiliar with the types of changes they’re undergoing. The research also found that poorly managed change can cause people to withdraw from work or to work longer and harder, but with diminishing productivity and lower morale.
So much about leadership is about the right communication at the right time, and understanding the context of the people you are communicating to. It is about knowing what communications need to be structured, what can be delivered in large groups versus small groups. It is also about anticipating reactions people have with change.
Organisations don’t change. People do. Leaders may understand the importance of communication, but the ability to communicate with empathy may be overlooked. Leadership communications need to reflect how the team think and feel and how they might respond to changes required.
Remember the context, Michelle suggests: “staff in large organisations are often dealing with multiple changes, sometimes in the same week. And often with change people feel all of a sudden they have no power, no control.” Whatever is going on for the team in their working lives and in their personal lives will create a context in which the message of change is received and how well it is heard.
The McKinsey report, ‘Developing better change leaders’, found that companies who identify cultural issues and embedded ways of thinking at the start of their change initiative are four times more likely to succeed in organisational-change efforts than companies that don’t.
Each organisation is different, says Michelle, “There is no cookie cutter that will work for all. You must tailor everything being done to suit the culture of your organisation.
A culture that accepts failure: when everything is new, there will be times when things do not go as planned. A culture that accepts that trial may mean error, supports a change initiative.
An agile culture: the bigger the bureaucracy the harder it is for change to happen. Agility means deconstructing the bureaucracy. Many large organisations try, but it’s a constant effort.
Neuroscience – the study of the brain and its impact on behaviour and cognitive functions.– has revealed patterns in response to certain stimuli. Findings suggest that there is a range of responses that can be expected when a person faces change they are uncomfortable with.
One tool is SCARF. SCARF has been developed by David Rock who founded the NeuroLeadership Institute to create scientifically informed resources for better business leadership.
SCARF stands for Status, Certainty, Autonomy, Relatedness and Fairness, the five domains of human social experience. According to David Rock, these five domains activate either the ‘primary reward’ or ‘primary threat’ circuitry of the brain. A perceived threat to one’s status activates similar brain networks to a threat to one’s life. A perceived increase in fairness activates the same reward circuitry as receiving a monetary reward.
“These studies give evidence and tactics to help people better cope and give teams tools and ideas, on how to self-regulate and how to manage change,” believes Michelle Gibbings.
Leaders and managers who find it difficult to anticipate the negative impact change has on their policies, procedures, technology and personnel are unable to grasp how their operations and behaviours should adjust.
Massive organisational change might take years before outcomes are evident. But there is pressure to see quick results. Michelle recommends chunking large change programs into manageable projects. “It’s easier to see results, technically easier to manage and easier for individuals to cope with.”
Don’t give up!
“Don’t give up,” is Michelle’s message to those struggling through change. “Change is fantastic. Change happens. Make it work for you. The more you understand how you as a leader are reacting to change the better you’ll be able to lead. If you want to grow your leadership career, you have to be able to manage change.”
If you would like to hear more of Michelle Gibbings’ insights about leading change at large organisations, listen to her on the first episode of our monthly Insight Edge Podcast:
Michelle Gibbings (FIML) is the author of “Step Up: How to build your influence at work”. She is founder and principal consultant at Change Meridian.