Why manage change?

Why manage change?

Whether you are an executive, supervisor, coach, consultant, project team leader or manager of any type where your job is to manage people, you likely have experienced resistance to change from employees. However, you may not recognize the role that you can play in preventing that resistance and leading change. Most managers do not make this connection until they have personally experienced failure in an important change project.
   
    “I should have communicated better.”

    “Next time I will involve more people.”

    “If the CEO had just been more public in his
    support.”

    “I was undermined by managers who felt threatened
     by this change and did not understand the vision.”

These common reflections by business leaders after an unsuccessful initiative have one common theme: each represents a failure to manage the people side of change. They are not alone. In a general study of companies implementing major business changes, 327 project leaders, consultants and managers answered the following question about their project overall:

        "If you had the chance to do it again,
        what would you do differently?"

The most common response was:

        "Utilize an effective and planned
        change management program."

Surprisingly, these study participants did not emphasize design or technology issues. They did not say they lacked vision or an understanding of the marketplace. The most common barrier to success was a lack of change management. They fell short when managing the people side of change and encountered:

    1. Managers who were unwilling to assign the needed
        resources to the project or would not allow their
        representative adequate time to participate

    2. Managers who filtered out important messages [the
        neutralizers] or started negative conversations
        about the change

    3. Employees who became distracted and lost interest
        in their current work responsibilities thereby
        impacting overall productivity and customers

    4. Valued employees who left the organization

    5. More people taking sick leave or not showing up for
        work

    6. Unforeseen obstacles to the change that seemingly
        appeared from nowhere

    7. A lack of funding for the change

In other words, things did not go exactly as planned. The unexpected happened. Not managing the people side of change impacted their success and introduced risk into their projects.
    Change management can not only mitigate these business risks, but in many cases avoid them entirely. Business leaders have the potential to not only manage resistance once it appears, but to prevent it in the first place. Unfortunately, many business leaders and project teams do not appreciate their role in managing the people side of change until after resistance impacts the success of their change.
    Two case studies show the potential consequences of not managing the people side of change. These case studies were selected because they highlight two common leadership mistakes: first, believing that change management is someone else’s job; second, ignoring the people side of change until major resistance stalls a project or causes the project to fail.


Case Study 1 - The Reluctant CEO

To reduce cost and improve customer service, a financial group wanted to consolidate its customer contact centers across several divisions. A consultant was hired to support the effort and to prepare implementation plans. The project no more than began when rumor spread through several departments that this organizational change was not good for the company.
    Supervisors and key managers in the existing customer care centers began resisting the change. In some cases they would not show up for design reviews or miss key decision-making meetings. Information requested by the consultant and the design team was withheld or half-complete. At breaks and around the coffee pot, employees complained about potential leadership changes. Both employees and managers were distracted from their day-to-day work and productivity suffered. Key managers were rumored to quit if the change was implemented.

    The consulting firm met with the CEO, repeatedly warning that this resistance would undermine his change and would ultimately begin to affect customers. The CEO, however, was reluctant to become personally involved. He viewed change management as the job of his project team and the consultant, and not the responsibility of the head of the company. After several months of difficulties and delays, the consultants finally declared the consolidation in jeopardy.
    With the project at a stand-still, the CEO requested an emergency briefing with his leadership team. To prepare for this status report, the consultants conducted interviews with key managers throughout each department. They quickly identified a manager in an existing customer care center who viewed his job at risk with the potential change. Arguments against the change initiated by this manager were spreading throughout the ranks. His supervisors were the same people who were presumably threatening to leave the organization.
    Even armed with this information, the CEO remained reluctant to take definitive action. The only recourse at this stage was reassignment or termination of this manager. Both options could have negative fall-out for the company and the affected manager. The CEO was faced with a stalled project and a potentially lose-lose decision for a long-tenured manager.

In this case, the CEO made two mistakes that are common in major changes. The first was to assume that change management was someone else’s responsibility. In a change management benchmarking study with 288 companies, the number one research finding related to an executive’s role in change is active and visible sponsorship at every phase of the project. The second mistake the CEO made was not managing resistance when it first surfaced. Resistance to change can spread like wildfire when not managed effectively. Waiting, in this case, only resulted in a more difficult situation later on.


Case Study 2 - Stripes and Tar

The president of a business association had facilities maintenance as part of his overall responsibilities. The association included multiple businesses that each had condominiums in a single large office complex. The president of the association decided that the parking lot needed resurfacing and new striping. He arranged for a local contractor to do the work.
    One day the construction company showed up at the office complex and started blocking off the parking lot. The contractor was getting his equipment ready and was trying to clear the lot of cars when disgruntled business owners confronted his workers. The business owners wanted to know what was happening, why it was happening and who authorized the work. Not happy with the uninformed answers from the contractor and the immediate demands to remove the cars from the lot, the business owners instructed the contractor to pack up his equipment and leave. Since the president was not on site to resolve conflicts, the contractor had no choice but to abandon the job.
    Even when the president finally intervened later in the day, enough business owners were upset about the unknown financial impact and the disruptive process that the contractor never returned to resurface the parking lot.

    In this case, the association president knew what needed to be done, took charge and moved ahead. The change was small, and in terms of maintenance, he was doing the right thing for the association. However, the president neglected to make the business owners aware that the lot needed resurfacing as part of normal maintenance. He did not communicate the financial benefit to the association and therefore the financial benefit to each business owner. Finally, the president did not inform the business owners about how and when the work would be done, and what the business owners needed to do to support the project. The result was resistance from the business owners, who, in this case, had sufficient authority to stop the work. The association president simply ignored the people side of the change and the project failed.
    Both complex and simple changes can fail. With many projects, the evidence of failure from not managing the people side of change is not as black and white as the absence of new blacktop with freshly painted white lines. Failure can come in many forms including project delays, loss of valued employees, significant declines in productivity and customer dissatisfaction.
    In Case Study 1, the CEO did not think that managing change was part of his job. It was not until a crisis emerged that the CEO became involved. Mid-level and senior managers can make this same mistake. They often look upward, thinking that change management is someone else’s responsibility. In Case Study 2, the association president viewed the change as small and simple, a change that he did not think required change management.

 
Why do many business leaders believe that managing the people side of change is not their job? At the onset of a new change, managers are typically focused on issues besides change management. Executives want the change to happen as soon as possible. Their focus is on results. They are aware of the business issues facing the organization and are accountable for financial performance. When a change is needed, they want action quickly. Their primary concerns are:

• What is the required investment?

• How will this change impact our financial
   performance?

• What is the return on this investment?

• When can the change be completed?

• How much improvement will be realized?

• How will this change impact our customers?

If the answers to these questions are favorable, then the directive to a project manager or project team is typically "let’s get it done." The executive’s focus is not on change management.
    The perspective of front-line employees (and in many cases their supervisors and managers within the organization) is very different. They generally do not have detailed insights into the business strategy and financial performance of the business, nor do they share the same accountabilities as business leaders. Many employees cannot connect what they do everyday with the performance of the company; therefore, it is difficult to convince them to change based only on company performance. Their focus is on the day-to-day job. Serving customers, processing orders, getting their work done – these are their primary areas of interest. When a change is made, their primary concerns are:

• What will this change mean to me?

• Will I have a job?

• Do I have the needed skills and knowledge to
    succeed in the new environment?

To complete the picture, consider the consultants or project team who encounter both of these different perspectives yet have the job to design and implement the change. They are accountable to the business leaders that authorized the change, yet must work with employees to implement the change successfully.
    Employees, the project team and executives have different priorities, different knowledge sets and different motivations. Change brings these different priorities, knowledge sets and motivations together in a potentially volatile mix. Employees feel threatened. Executives expect results. The project team is caught in the middle. The business enters a period in which the risk of productivity loss, customer dissatisfaction and employee turnover increases dramatically. It is at this critical juncture that change management plays a crucial role for business success.
    To survive in today’s marketplace, a business must constantly examine its performance, strategy, processes and systems to understand what changes need to be made. At the same time, an organization must also understand the implications of a new business change on its employees, given their culture, values, history and capacity for change. Employees ultimately perform the new day-to-day activities and make the new processes and systems come to life in the business. Change management is about managing people in a changing environment so that business changes are successful and the desired business results are realized.

The challenge for today’s leaders

These two views of change, the top-down executive’s view and the bottom-up employee’s view, create two distinct challenges for managing change. These two challenges can be referred to as organizational change management (from the manager’s perspective) and individual change management (from the employee’s perspective). Both are skills that today’s leaders need for success.
    Organizational change management is the perspective of business leadership from the top looking down into the organization. The focus is around broad change management practices and skills that will help the organization understand, accept and support the needed business change. The emphasis is on communications, training and the overall culture or value system of the organization.
    Individual change management is the management of change from the perspective of the employees. They are the ones who ultimately must implement the change. The focus for individual change management is around the tools and techniques to help employees through the transition. Managers and supervisors must provide the coaching required to help individuals understand their role and the decisions they make in the change process.
    Overall, change management is about helping people through change. It is the process, tools and techniques for proactively managing the people side of change in order to achieve the desired business results.

Getting up to speed

Change management is the application of many different ideas from the fields of engineering, business and psychology. As changes in organizations have become more frequent and a necessity for survival, the body of knowledge known as “change management” has also grown to encompass more skills and knowledge from each of these fields of study. While this may be a good trend overall, the result for many business leaders is growing confusion about what change management really is.
    The purpose of this book is to bring the meaning of change management into focus. Written for executives, managers and consultants, this book will provide you with a solid understanding of the principles and processes around managing change in today’s competitive environment. Case studies, examples and even a personal exercise will help bring the concepts to life.

Copyright 2003. Prosci. All rights reserved. Used with permission.

Change Management: the people side of change: a solid foundation in change management perspectives, theories, activities and practices - available now - email a Prosci analyst or call 970-203-9332 for more information.