17 years ago, John Kotter wrote a definitive work in
the field of change management, called "Leading Change", which I
found inspirational. Since then, thousands of books and journal articles
have been written about change, but research shows that only 30% of change
programs succeed.
Not long ago, McKinseys surveyed 3200 executives
around the world and found that statistic is still valid. So why is that so? Back in 2009, a McKinseys article I read explored that very topic, called “The Irrational
side of Change Management”, http://www.mckinsey.com/insights/organization/the_irrational_side_of_change_management and so I thought I might revisit their thinking with a focus on a recent change initiative I did at Parramatta City Council, to reflect on why it was one of the successful ones.
There are five basic conditions you have to get right
to achieve change.
1. A compelling story2. Engagement in the change
3. Role modeling
4. Reinforcing mechanisms
5. Capability building
You need a compelling story that is well communicated to all employees and followed up with
ongoing dialogue and involvement. A typical story is the burning platform one -
we need to change to survive, to be financially viable, or we need to grow and meet changed
customer needs.
Even though this is a compelling story. It often fails
to have the impact that change leaders expect because they didn't hit the 5
major motivations of staff (thinking wrongly that one thing motivates everyone
equally). The five are:
- impact on society, building the community, leaving
legacy
- impact on customer, superior service, changing needs
- impact on organization, financial, sustainable
- impact on working team, great place to work, care,
teamwork
- impact on me personally, my development, job
security, pay, more attractive jobs
At Parramatta, I used a multi-pronged objective that was embodied in our future pathways map, out ten
strategic priorities, our ten guiding principles, which all hit every one of these
five impacts. That's why our staff got the story and were individually inspired by One or another part of it. Our engagement score soared from 30% to 69% with the objective that "we are going to make this a financially sustainable business, a great place to work, a learning organisation that values its people and that has the capability to build the future city of Parramatta we aspire to".
2. Engagement in the Change
Human nature is that we are far more committed to the
outcome, by a factor of five to one, if we are involved in the decision making,
a sense of ownership of the answer. At Parramatta we did just that. Our service review was done by us,
cross functional teams provided peer review, we got to write our own destiny
and hence we owned the results. And it has
to be a constructionist based approach to change, not just a deficit based
one. By that I mean humans are more
willing to take risks if there is an upside, imagining what might be, rather
than just cutting back on what was. Again, that's just what we did in the
service review.
3. Role Modelling
They must see the CEO and everyone behaving in a new
way. So at Parramatta we used the guiding principle awards, the focus on KPI's to drive new behavior
and 360 degree feedback and the performance and development plan system to keep
us honest about whether we are acting that way.
Change then happens like wildfire through an
organization, one spark leading to another, using the role models of one part to help drive another.
4. Reinforcing Mechanisms
We need reinforcing feedback systems, processes and incentives aligned with the new behaviors, to cement the changed behaviours. And these feedback mechanisms need to be carefully crafted to take into account
that people don't always behave rationally or in their own best interests.
For example, linking change to pay is actually the least effective
reinforcing mechanism. The reason for this is that for human beings
satisfaction equals perception minus expectation, reality has nothing to do
with it. So it's about exceeding their expectations, doing it fairly and with a
proper process, showing a far brighter future and lowering the risks of change. The best feedback is information, freely given and equally applied.
At Parramatta the service review was about improving process,
giving people the technology and the systems and the tools to do a better job,
make it easier to change because the systems supported a new way of thinking.
5. Capability Building
It's a mistake to think that everyone automatically has all the skills required to
make the desired changes. You need to understand the strengths, weaknesses and personalities of key staff and tailor your messages
and your training to each type of need. Build leadership capacity, give them
the tools for change and make sure they understand how to use them. In my view, you can't successfully implement change without a leadership development program.
You need to understand that giving a person a hammer
doesn't make him a carpenter but with the right tools and the training to use
it, incredible achievements can be built.
So at Parramatta we
understood the five factors of successful change, and we were indeed one of the 30% of successful change programs. They are now powering ahead in their transformational future pathways journey, delivering the vision: a sustainable
organisation, a great place to work, and one that can deliver the future city
they aspire to.
Rob Lang
