Mining being central to Western Australia’s economy, it
has been years of the state and its people riding a wave of prosperity.
However, slow down of the mining boom since 2012 is bringing about some
significant changes in the industrial landscape of the country.
Although mining will continue to be central to our
economy for years to come, a shift in focus is essential for the country’s
continued economic growth with Industry having to reposition itself for
prosperity. This calls for organisations
taking a fresh and proactive look at their current operations in view of a
desired future state. However, with statistics reporting high volumes of change
processes failing to deliver the desired outcomes, the change journey is
anything but an easy recipe one can follow to achieve the perfect result. Many
change initiatives fail not because of a fault with the change model or
techniques, but because of change managers not understanding the ‘why’ behind those
models.
The challenge ahead
Charles Darwin made the fitting comment: “It isn’t the strongest of the species that survive, nor the most intelligent, but the ones who are most responsive to change.”
In recent interviews, the international leadership guru, Dr John Kotter, made the disturbing remark that the marginal rate of change was increasing – and would continue to do so for the foreseeable future. The result is that many organisations simply cannot keep up with the speed of change. We are indeed experiencing what the futurist, Alvin Toffler, in 1970, referred to as a state of ‘future shock.’
The challenge is to move with the times – continually. Meeting with industry leaders on a weekly basis, in contrast to 2012 and 2013, I am witnessing a reserved optimism emerging towards the future. However, we are not out of the woods yet; there are challenges lying ahead. The continued growth and prosperity of your organisation in this climate requires a culture that keeps moving all the time and depends on the alignment of the feedback processes and behaviours to what is happening in your external environment. Even more important, it is not just about keeping up with what is changing around you – it is also about doing it faster than your competition.
An issue with most change management models is that they describe the change process in the format of a set of steps based on the result of extensive research and the experiences of change management experts from years of trial and error in the field. Having had the opportunity of being involved in a variety of incremental and stepwise change initiatives during the past 20+ years – both as an employee and a consultant, what I’ve come to learn is that there is no silver bullet for managing change. No two organisations are the same – duplicating change techniques from one organisation to the next is bound to deliver different results. In today’s market we have the luxury of having a wide plethora of change recipes at our fingertips. However, failing to have some understanding of the basic guiding principles of effective change management, we don’t really know what we are dealing with let alone the reason for its importance.
Getting down to the basics
A considerable issue with most existing change management models in use today is that their underlying lessons and principles are not discussed. This leaves organisational leaders and change managers getting to know the ‘how’ of change management, but not the ‘why’ thereof. Hence, we focus on the steps of the recipe trying to make them work in a specific situation without really understanding the underlying research and the psychological principles behind it.
No wonder CEOs report up to
75% of their organisational change efforts do not yield the promised results.
In many instances, and despite the best of intentions, there are many examples
where change initiatives resulted in exactly the opposite what organisational
leadership had hoped to achieve – a state of employee disbelief, distrust and
disengagement. Dr Peter M. Senge in his book, “The Fifth Discipline: The Art
and Practice of the Learning Organisation,” states that, “This failure to
sustain significant change recurs again and again, despite substantial
resources committed to the change effort; many of which are bankrolled by top management,
talented and committed people driving the change, and high stakes. Executives
feeling an urgent need for change are right; however, organisations that fail
to sustain significant change end up facing crises. By then, their options are
greatly reduced and even after heroic efforts they often decline.”
What is needed is for
organisational leaders and change managers to understand the ‘why’ of change
management. Once you have a better understanding of the underlying principles
that drive change management processes (the ‘why’), it will make you better at
“rolling with the punches” and doing the ‘how.’
Rolling with the
punches
The difference between
knowing the ‘how’ instead of the ‘why’ of change management can be likened to what
distinguishes a cook from a cordon bleu chef: the difference lies in the
fundamental understanding of why things are done. In most cases, and given the
perfect circumstances, the cook following a step-by-step recipe should produce the
same predictable result every time. However, differing circumstances (e.g.
changes in temperature, humidity and elevation) can affect the outcome
dramatically. Even small changes in the amount of certain ingredients can
result in a great recipe becoming a complete disaster. Rarely knowing why the
recipe has worked, the cook also fails to understand why it has failed. In
contrast, the cordon bleu chef has a perfect understanding of what is occurring
and knows the reason behind each element of the recipe. As a result, he has the
ability to adjust with the changes to create the outcome he wants. Knowing the
chemistry of what is occurring, he also knows which flavours complement each
other and can tell what is missing by simply tasting the result and having the
skills to adjust to still produce an excellent dish.
In similar fashion, following
a step-by-step recipe for change management will prove insufficient for driving
business results. Instead of being a “cook” blindly following the recipe, you
should be a “cordon bleu chef” carefully crafting an appropriate change
strategy and approach that meets the specific needs of the situation. You
should continually assess the change environment and be able to make the
necessary changes to match the evolving situations – one of the most
unpredictable variables of which is the people element of change. Understanding
the foundational elements (the ‘why’) that underlie the change management
process will ultimately determine the success of a change initiative. To
achieve the best outcome, understanding the psychology of change and key
guiding principles is vital. This will enable you to use a variety of change
management models and tools and to adjust your approach to match the size and
nature of the required change.
The psychology of
change – understanding the guiding principles of effective change management
The psychology of change
management explains the way people think and why they act they way they do.
Organisational leaders can make it easier on themselves and their organisations
if, before embarking on complex organisational
improvement programs, they determine the extent of the change required
to achieve desired business outcomes. The
change management gurus, McKinsey and Company identify three levels of change,
the simplest, most straightforward where changes are made without changing the
way people work, e.g. divesting noncore assets to focus on core assets. On the
next more complex level employees may
have to adjust or adopt new practices in line with their existing
mindsets to reach a new target. For example, an already “lean” organisation
might encourage its employees to identify new ways for reducing waste or
improving production. The third and deepest level of change involves the
culture of an organisation. In this instance, the only way the organisation can
become more competitive is by changing its culture fundamentally, e.g. from
being reactive to proactive, hierarchical to collegial, or introspective to
eternally focused. In effect, cultural change entails changing the mindsets of
large numbers of people, which necessitates an understanding of change psychology.People will alter their mindsets only if they see the point of the change and agree with it. Additionally, the surrounding structures (e.g. reward and recognition systems) must align with the new behaviour. It is equally important that people must have the skills and abilities to do what is required and also must see people they respect modelling the new behaviour actively. Each of these conditions is achieved independently, yet together they add up to a way of changing people’s behaviour in organisations by changing their attitudes about what can and should happen at work.
Believing in the purpose
In essence, people will
strive for a mental state of harmony, i.e. where their beliefs are consistent
with their actions. However, a state of cognitive dissonance arises when our
beliefs are inconsistent with our actions, which will cause us to rectify the
matter by changing either our actions or our beliefs.
In organisational terms this
means that people will be content to change their behaviour to serve the
purpose of a change initiative – if they believe in it. If they don’t alter
their behaviour, it will indeed result in them suffering a mental state of
cognitive dissonance. To feel comfortable and enthusiastic about a change
initiative, people have to understand the role of their actions in achieving
the desired change outcomes and have the conviction that it is worthwhile for
them to play a part. Only informing them that they will have to behave
differently will not cut it. It is therefore important for organisational
leadership and change managers to take time to think through the “change story”
– what makes it worth undertaking – and to explain the story to everyone
involved in making the change happen, so that their contribution makes sense to
them as individuals.
Reinforcement systems
BF Skinner’s research on
operant conditioning and positive reinforcement during the late 1920s and 1930s
has led organisational designers to broadly agree that reporting structures,
management and operational processes and measurement procedures – setting
targets, measuring performance, and granting financial and non-financial
rewards – must be consistent with the behaviour people are expected to embrace.
When an organisation’s goals for new behaviour are not reinforced, employees
are less likely to adopt it consistently. For example, if employees are
expected to perform a certain task, but performance against that task does not feature
in their performance score cards, they are less likely to be bothered.
We also need to keep in mind
that having the structures and processes in place that initially reinforced new
behaviour patters, these are not a guarantee that it will endure. To enable
sustained higher performance, it is essential for these behaviour patterns to
be supported by changes that complement the other three conditions for changing
people’s mindsets.
Skills and abilities required for change
Many change programs fail as a result of management
exhorting them to behave differently, without teaching them what that means in
their individual situation. For example, employees may be urged to become more
customer-focused. However, if little attention was given to customer focus in
the past, employees will experience difficulty in the interpretation of this value
and not know what a successful outcome would look like.
Equipping adults with the skills and abilities they
need in order to make the required behaviour changes can pose a challenge. The
adult learning specialist, David Kolb, proved that adults have difficulty to
learn by merely listening to instructions; it is essential that they are given
time to absorb the new information, use it experimentally, and integrate it
with their existing knowledge systems. In practice, this means that trying to
disseminate everything there is to know on a new subject in one session is
bound to be a futile exercise. It is
much better to break down the teaching into bite-sized chunks and provide time
inbetween for employees to reflect, experiment and apply the new principles.
Large-scale change happens only in steps.
It has also been proven that adult learners assimilate
material more thoroughly if they have to describe to others how they will apply
what they have learnt to their own circumstances. Part of the reason is that we
use different areas of the brain for learning and teaching. Be sure to build in
this component of the learning experience into your program.
Consistent role models
Clinical studies confirm that consistent role models
are as important in changing the behaviour of adults as the three preceding
conditions combined. This is because people in organisations tend to model
their behaviour on “significant others”: those they see in positions of
influence. Within a single organisation,
people on different functional levels choose different role models. To change
behaviour consistently throughout an organisation, it isn’t enoug to ensure
that senior executives are in line with the new ways of working; role models at
every level must “walk the talk.” It is essential that role models’ underlying
values informing their behaviour have to be consistent. For example, a company
that encourages entrepreneurial thinking across the organisation, one middle
manager might try to coach junior employees how to identify new ventures, while
another might leave this up to them. Both, however, would be acting in line
with the entrepreneurial principal. In contrast, the manager who demands a
comprehensive business case to justify each $50 expenditure would not be. Where
entrepreneurial thinking has not been an organisational value previously and is
newly developed, this will require of both managers to act roughly in the same
manner to encourage their subordinates to put on their thinking cap.
Apart from individual role models, behaviour in
organisations is also deeply impacted by the groups people identify with. Role
modelling by individuals must therefore be confirmed by the significant groups
that surround them if it is to have a sustained influence. Hence, it is equally
important that change must be meaningful to key groups at each level of the
organisation.
In summary
In preparation for the next
economic wave, it is essential for organisations to reposition themselves by
taking a fresh and proactive look at their current operations in view of a
desired future state. Readying themselves for continued economic growth, it is
important for organisational leadership and change managers to get down to
basics and obtain a better understanding of the ‘why’ of change management – understanding
the ‘why’ makes you better at the ‘how’ and enables the careful crafting and
implementation of an appropriate strategy and approach that meets the specific
needs of the situation.
Attaining sustainable change
also requires an understanding of the
psychology of change, which in essence, involves people and their mindsets,
attitudes, and skill sets.
Our next discussion will be
on ensuring effective communications during organisational change to achieve
the impact we desire.
Until next time!
HEIN ROTH
Director
ROTH ASSOCIATES
info@rothassociates.com.au
www.rothassociates.com.au
