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A Moving Method for Leading Change More Effectively
By Dan Cohen, Partner, Deloitte Consulting, LLP
Although the presence of change is constant, the pace, amount and complexity of it are not: These elements only continue to increase, with no sign of abating any time soon. In this environment, organizations that desire to keep a competitive edge not only need to change, but they also need to do it more efficiently and effectively.
Recent meetings with 5,100 business leaders around the world -- including many IT leaders and professionals -- emphasized that bringing about successful change remains the crucial challenge for organizations. Furthermore, these executives reported that successful change almost always takes up more of their time than they anticipated. In fact, a number of them indicated that during a major change effort, they spend upwards of 40 percent of their time focused on the initiative.
Despite the focus and attention given to change leadership, many projects still fail to meet the full expectations of a transformation. There are many valid theories about why this is so; however, we found the main reason to be surprising.
Our research, which was based on interviews with hundreds of executives in the midst of large-scale change, revealed that it is not the complexity of the technology, lack of buy-in from top management, high costs, or the failure to create shareholder value that derails new projects. Instead, the single biggest challenge in any transformation is simply getting people to change their behavior.
Furthermore, people change their behavior less because they are given analysis that shifts their thinking, than because they are shown a compelling truth that influences their feelings. Emotions then trigger action - impelling people to behave in often radically different and difficult ways that substantial change demands. This three-part process of seeing what the problems are; feeling an urgency to solve them; and being emotionally compelled to act lies at the heart of every successful change effort.
See-Feel-Change and the Eight-Step Model
To succeed in a transformation effort, business executives must get people to see and feel the need to change. They also must understand that most successful transformations follow a rolling eight-step process. These eight steps may be usefully grouped into three major phases:
Phase I: Creating a Climate for Change
- Creating a Climate for Change by building energy;
- Engaging and Enabling the Whole Organization by demonstrating leadership; and
- Implementing and Sustaining the Change by leadership tenacity.
The first phase in preparing the organization for change is to build the necessary energy and urgency to get the ball rolling. Energy and urgency are vitally important because effecting significant change is hard work that requires much more than the usual effort and commitment from employees. Without an environment filled with energy and excitement, the workforce will never embrace change, and lasting transformation will be harder, if not impossible, to achieve. The first three steps in our 8-step model are vitally important because they work collectively to create a climate for change within an organization.
Step 1. Increase urgency: Those who are most successful at significant change -- whether executives at the top or small work groups at the bottom -- begin by creating a sense of urgency among relevant people. Urgency tells people, "Let's move! We need to change things!" Without it, getting your change effort off the ground will be like pushing a boulder up a large hill.
Step 2. Pull together guiding teams: With urgency up, the more successful change leaders organize teams powerful enough to guide large-scale, organizational change. Every successful change initiative needs teams of influential, enthusiastic and focused leaders and dedicated professionals. It is also critical to have leadership teams in the field to drive and sustain the change.
Step 3. Create clear, challenging, achievable visions and sets of strategies: In the most effective instances of large-scale change, the guiding teams create a clear and practical direction for the transformation, where people are able to see the possibilities and to connect with them on an emotional level.
One of the most effective ways to carry out these steps, and therefore to create an appropriate climate for change, is to use compelling, eye-catching, dramatic situations to show people what the problems are and what the future may look like if these challenges are-or are not-addressed.
For example, a procurement manager within a very large enterprise knew there was a problem with the company's whole purchasing process. He had a hunch that a lot of money was being wasted and that more-efficient procurement of supplies could save the company a staggering amount, which he estimated to be about $25 million on an annual basis.
To check out his theory, he asked a summer intern to do a small study involving a single supply item: gloves. The project revealed that the organization was regularly purchasing 424 different types of gloves! The student collected the gloves, literally all 424 of them, putting each in a baggie with the price on it, which highlighted the enormous cost disparities existing among similar kinds. The gloves were sorted into stacks according to type and where they were used. The towering stacks were then placed on a boardroom table so that top leadership could see the consequences of the inefficient purchasing processes they were allowing to go on in the field.
Prior to this demonstration, top leadership did not grasp the magnitude of the problem nor of the opportunity. So nothing happened. But the visual image of 424 types of gloves shocked them out of their complacency and gave them a compelling reason to move. As the demonstration gained notoriety (it was turned into a traveling road show that went to every division) people throughout the organization began to say "we must act now," which of course they did, ultimately saving a great deal of money that could be used in much more sensible ways.
Similarly, an IT team at an energy company put on a play that demonstrated the effects of inefficient manual processes versus those of a proposed, real-time system. The play highlighted the frustration that occurred when "balls were dropped," such as when someone took a power generator out of the maintenance facility but forgot to record it, creating an unpleasant surprise a few days later for the next person who needed one but could not find one. In comparison, a real-time system would have circumvented this problem by sending an automatic purchase order to the supplier.
These types of displays work so well because they provided useful ideas that hit people at a deeper level than surface thinking. They evoke a visceral response that reduces emotions that block change (complacency, fear and anger) and enhance those that support it (urgency, optimism and faith). And, they do so in a manner that emphasizes core business issues, such as performance gaps, competitive challenges, market opportunities, etc. This intertwining of logic with emotion is at the heart of successful change. To be compelling, the case for change must portray:
- The situation: Facts and data about the organization's performance, the market situation, and the competitive position. The goal is to have people see the problem, solution or progress in a compelling, dramatic way.
- The problem: The probable negative outcome if nothing changes -- that is, what's at stake. The methods used must speak to people's emotions so that they can feel the problem.
- The benefits: The rewards and opportunities for change. People act on their emotions. Emotionally charged ideas change behavior and reinforce altered actions.