In today’s volatile business world, organizations must change constantly so they can continue to exist. Disruption is dramatically accelerating, and the lifespan of large, successful companies is getting shorter.
According to a study of the S&P500 Index, in 1958 US corporations in the S&P500 remained in the index for an average of 61 years. By 1980 the average tenure of an S&P500 firm was 25 years, and by 2011 the average was just 18 years based on seven-year rolling averages. At that rate, 75% of the S&P500 will be replaced by 2027.
The need for an agile, change ready workforce has never been more critical to business success. Very few organizations consistently achieve the full potential of their strategic initiatives. In most cases, the real problem is not strategy, culture, structure or systems. The true issue is changing the behavior of people.
Organizations often miss the mark because they underestimate the difficulty of kicking old habits and developing a healthy new approach that will result in numerous new everyday actions. New skills, discipline, and strong personal relationships are needed to maintain the momentum.
Can you change when it really matters? When it matters most? If you said yes, you are likely wrong. Odds are you will not. That’s right. The scientifically studied odds are against you: nine to one. Alan Deutschman, the author of the provocative article Change or Die, shared that when people are confronted with the alternative of either changing or dying, many still will not change. "If you look at people after coronary-artery bypass grafting two years later, 90% of them have not changed their lifestyle… Even though they know they have a very bad disease and they know they should change their lifestyle, for whatever reason, they don’t." It’s the same for many organizations.
CEOs are typically the principal change agents for their organizations, and they are often as resistant to change as anyone--and just as prone to backsliding. If only 10% of the people threatened with death make the changes needed, how do we get people to change the way they do their job?
Aligning strategy and people is vital. Resistance is highest when the need for change is not effectively communicated and when the benefits are not understood by all.
Avoid these common mistakes and set up your organizational change efforts to produce and sustain your desired results:
1. Failure to align the rational and emotional elements when building a compelling case for change. Many leaders are skilled at making the rational need for change, but they often miss the appeal to people’s emotions.
Tapping into emotions are hugely powerful when driving organizational change.
• Find ways to help people see the problem or solution in a way that influences emotions.
• Provide details about what will change and what will not.
• Paint a vivid picture of what the change means for employees personally, not just why it benefits the business.
2. Not involving employees as stakeholders. Real change happens at the bottom of the organization. It doesn’t happen at the town hall meeting or through the Intranet. Many leaders believe cascading the message from the top down through the formal structure still works. Unfortunately, most change initiatives are forced on employees, not implemented with them or by them.
People need to make sense of a change before they will accept it.
• Encourage people to ask questions so they can completely understand why the organization needs to operate in a different way.
• Provide ways for people to make links between your business imperatives and the realities of the external environment.
• Create opportunities for two-way conversation at all levels of your organization. Engage change agents up, down and across your organization.
3. Underestimating the resources and effort needed to build and sustain an agile, change-ready organization. Organizational transformation is not an initiative, it’s constant. Pressure for immediate impact can cause leaders to set unrealistic time frames and neglect to consider the additional capacity required.
• Commit the necessary time, people and resources to build the new skills required to sustain desired behaviors. Focus less on management and more on leadership. Leadership exists at all levels of an organization.
• Consider both the impacts on other parts of your organization and the human element when assessing the scope of your change.
• Accelerate the pace of your organizational change by adding more capacity through reallocating people’s time, hiring more people, or outsourcing work to experienced external partners.
It’s clear that change is no longer an occasional disruption. The need for change is accelerating and nearly continuous. Can you change when it really matters? When it matters the most?
Effective change management is driven by strategy. Our eGuide, 5 Tips for Driving Better Strategy Execution, is a great place to start.