Most mergers fail to realise the value that they were expected to realise. Organisations of all types also consistently struggle to embed change and 60-70% of change efforts fail. Often change efforts are made in response to powerful external forces, well planned and allocated considerable internal focus and resources yet still don’t deliver.
Large mining houses in Australia have allocated significant resources to reduce the cost of production and increase productivity through the latest downturn. Some have managed to reduce expense, maintain or improve productivities and manage risk while others have struggled to make headway. As the NSW engineering construction market looks forward to a strong pipeline of transport related infrastructure work, the competitive landscape has changed too. New overseas and interstate entrants, unsolicited offers to government for major infrastructure solutions and new delivery models and leaders from public sector clients have forced competitors to think differently. These developments highlight the importance of a considered and disciplined approach to leading and managing change.
Identifying the need to change and thinking differently are important steps, but real change embeds when the organisation – including processes, structures and people – gets traction and moves in a new direction. Easier said than done.
The pace of technology evolution forces competitors in the IT sector to be responsive and capable of implementing change well and this sector offers some lessons on embedding change. Kodak identified digital photography capability but failed to bring it to market – leaving Sony to enjoy success from this breakthrough. Xerox preceded Apple in developing the personal computer but failed to embrace and embed the opportunity while Microsoft was outpaced by Apple on product innovation despite a dominant market position. At the beginning of this year Apple posted the biggest quarterly profit ever recorded by a public company.
So what’s the difference between Apple and other competitors? Longer lead times in product development at Microsoft suggest Apple has greater underpinning capacity to source, filter and develop innovation and a stronger core competence to manage change.
In this month’s Set the Standard feature editorial, STS Director Marcus Carroll, reflects on STS experience, research and the contributions of change authors – to offer some important considerations for major change efforts.
It is always important to consider change from the perspective of employees within the business or project. Employees often resist change as a result of localized or personal factors that are unrelated to organisational goals. Several top reasons that employees resist change include saving face, fear of the unknown, mistrust, loss of control and their personal predisposition towards change.
These factors can be associated with employee drives which are highly personal and unique and which often exist largely independent of the organisation they work with. While the source of these factors may be unrelated to the organisation, the behaviours they produce can have significant effect on the success of organisational initiatives. So how do leaders effectively manage these human factors which lead to change resisting behaviours in teams and individuals?
So how do leaders effectively manage these human factors which lead to change resisting behaviours in teams and individuals?
A good starting point is to consider the factors which cause or constrain motivation in people. The MARS model of individual behaviour and performance identifies a range of factors which impact on an individual’s behaviour and performance. MARS explores behaviour using four different factors: Motivation, Ability, Role Perception and Situational Factors.
A person’s motivation may be influenced by a myriad of factors independent of the organisation. This includes their personality, values, needs and experiences. While these are largely established before someone enters the workplace, it is important to consider motivation so that change efforts can best tap into common drives that exist in most of us.
Ability or competence of employees may also act as a restraining force to the change. An employee who does not have the correct level of ability (whether real or perceived) will struggle to support the direction of the change. Supporting and encouraging your employees to build their ability through training, development or familiarity will assist in reducing frustration and enabling individuals to contribute towards achieving your change goals.
Positive Role Perception requires individuals to understand the role they play in the team, the organisation, or even within the change initiative. It involves three considerations: specifics of the task, priority of the tasks and the behaviours and processes required to complete the task. Homer emphasised the importance of roles and rules to organisational performance over 2700 years ago and the advice rings true today. If an employee has poor Role Perception this can be another burden holding them back from progressing and bring further uncertainty introduced by change.
Situational Factors that may restrain change include culture and behavioural norms within the team and organisation, or in the broader context of the industry and country. They also include organisational processes, timeframes, resource allocation and working conditions. Businesses should ask “what messages and influence are these situational factors creating on employees regarding the change we seek?”
At an organisational level, STS recommend any business considering change adopt a contingency approach in implementing sustainable change, tailoring the approach based on the unique circumstances of each change effort. We are consistently asked to support organisations to achieve change in bottom line and/or safety performance. Some insights from our own experiences and literature on change suggest that most change efforts would do well to consider the following ideas:
(1) Understand and embrace resistance as a vital resource – Resistance often demonstrates interest and provides feedback to inform decisions. Resistance can present the opportunity to engage and open important communication channels. Anyone who has experienced a change effort scuttled by resistance despite no overt expression or concern is likely to appreciate that overt resistance can indicate genuine engagement and concern for the organisation and be a real opportunity to communicate and build commitment.
(2) Support the forces for change – Identify restraining and driving forces and look to maximise driving forces rather than just reducing restraining forces. In most settings there are forces and groups that support change that can be leveraged and it can often be easier to support and encourage those groups than try to turn those opposed around.
(3) Start small and build the momentum – pilot projects and the recognition and reward of groups that are already acting consistent with the change are useful methods to trial and reinforce the ability of employees at a safe scale. Toyata’s continuous improvement efforts using LEAN methodology used pilots to achieve results on a small scale before leveraging into the broader organisation. This approach was modelled by IT giant WiPro who successfully implemented LEAN in the services sector. Small scale and pilot projects give employees the opportunity to test their ability with minimum risk and maximum support and help change agents build momentum, achieve political wins and prove capability on a manageable scale.
(4) Get the participation and time balance right – Involvement of employees in steps in the change process will typically support greater ownership and acceptance of change. Greater involvement can mean longer time however and in some cases senior leaders must make decisions with little or no participation from employees. Businesses must always balance the speed of change and level of involvement and look for ways to get participation even when moving at pace.
(5) Build positive readiness and urgency for change – Make an effort to establish both a rational and emotional case for change and communicate this widely with employees. This taps into key drives that motivate. Information regarding external opportunities and threats can build urgency for change allowing for a ‘burning platform and build readiness for change . A compelling vision can energise employees and build emotional commitment towards a clearly defined future state and provide the focus for individual and team efforts to organize and plan. A current STS client set a sharp and aspirational vision a few years ago that employees embraced. They recently achieved that vision and are ready to re-set this vision to continue to engage the team towards higher performance. Clarity of future success can be expressed in many ways but always needs to be expressed clearly and consistently for those outside the senior leadership team.
(6) Embed change via instrumental practices – practical and sustained initiatives are important to locking in change. Decisions and actions to align organisational systems and structures to the new way of working further reinforce and embed change. While a transformational leader can create the vision and inspire employees, instrumental leadership that embeds changes in a practical way is important to sustaining progress.
(7) Align and engage key leaders – In our experience visible behavior in support of the change from leaders is the most important variable in success. Employees will take cues from leaders in times of change and employers should make a point of engaging formal and informal leaders at all levels. People will naturally test the commitment of the organisation when efforts are made to change. The power of consistent, visible leadership behaviour aligned to the change is considerable and sends a clear message about the commitment of the organisation to seeing the change effort through. Choosing key leaders who are respected and admired by employees inspires momentum and motivation towards the change.
I hope these insights resonate with you and inspire more ideas on achieving effective and sustained change. At STS we are passionate about understanding and achieving shifts in performance within organisations and always interested in dialogue and ideas. We invite you to share your insights or to make contact to discuss how to effectively lead the change initiatives within your business.
Post written by Marcus Carroll, Managing Director, STS Consulting Australia.
McShane, Olekalns and Travaglione (2014) Organisational Behaviour: Emerging Knowledge. Global Insights, McGraw Hill.
 McShane, Olekalns and Travaglione (2014) Organisational Behaviour: Emerging Knowledge. Global Insights, McGraw Hill.
 Kotter (2007) Leading Change: Why Transformation Efforts Fail, Harvard Business Review
 Senge and Goodman (1999) ‘Generating Profound Change’ The dance of change: the challenges of sustaining momentum in learning organisations, Nicholas Brealy, London and McShane, Olekalns and Travaglione (2014) Organisational Behaviour: Emerging Knowledge. Global Insights, McGraw Hill.
 Beer, Eisenstadt & Spector (1990) Why Change programs Don’t Produce Change, HBR and Kotter (2007) Leading Change: Why Transformation Efforts Fail, Harvard Business Review and Spillane and Joullie (2014) Heroic Drucker, Spinger Science and business Media
 Kotter (2007) Leading Change: Why Transformation Efforts Fail, Harvard Business Review
 Armenakis, Harris & Mossholder (1993) Creating Readiness for Organisational Change” Human Relations
 Kotter (2007) Leading Change: Why Transformation Efforts Fail, Harvard Business Review and Fuda (2008) Why Change Efforts Fail, Peter Fuda and the Alignment Partnership and Mankins and Steele (2005) Turning Great Strategy Into Great Performance, Harvard Business Review
 Kotter (2007) Leading Change: Why Transformation Efforts Fail, Harvard Business Review and Fuda (2008) Why Change Efforts Fail, Peter Fuda and the Alignment Partnership and Katzenbach and Harshak (2011) Stop Blaming Your Culture and Kanter (92001) On track to tomorrow: getting change rolling, Harvard Business School