Loose Change Costly

Saturday, June 1, 2013 - 11:17

The key to initiating change in your business is to ensure management is committed to the cause. By Leon Gettler

Change management sounds like a great idea - after all, in life and business, change is inevitable. Why shouldn't companies decide to change and then work towards achieving that objective?

However, for various reasons, many change management programs end in failure. Dr Malcolm Johnson, general manager of Professional Development & Research at AIM Queensland and Northern Territory, says change management programs often fail because organisations do not sufficiently involve employees.

He cites one government department he examined where most senior managers had virtually no commitment to the change which had been mandated from above. Change management efforts there were a disaster.

"We were stunned by how the individuals and aspirations were not aligned to what the organisation was trying to deliver," Johnson says.

"The things that were important to those individuals were fun and enjoyment, socialisation and financial security. It had nothing to do with the mission of the organisation. That particular group of managers were not at all engaged with what the organisation was trying to deliver."

Johnson says this happens too often. "You see evidence where it works really well but you see too much evidence where it hasn't worked," he says. "When it doesn't work, even those who were engaged at the start become disengaged. It's the survivor syndrome."

He also warns against change programs that undermine the organisation's core values, which can lead to employee resistance.

"If the change initiatives are coming from senior management, there has to be a real communication of the circumstances the organisation is facing – why the change is necessary and why the proposed change is appropriate – and then acknowledging them as individuals," he says.

One of the world's most eminent management thinkers, John Kotter, has found 70 per cent of all major change programs in organisations fail because managers are not prepared to do what it takes to see the process through.

In his book Leading Change, Kotter says: "Over the past decade, I have watched more than 100 companies try to remake themselves ... Their efforts have gone under many banners: total quality management, re-engineering, right- sizing, restructuring, cultural change and turnaround.

"A few of these corporate change efforts have been very successful. A few have been utter failures. Most fall somewhere in between."

Kotter says managers need to create a guiding coalition to lead the change effort as a team. They have to remove obstacles to change, or change systems that undermine the vision. They need to encourage risk-taking and non- traditional ideas, activities and actions. They should focus on short-term wins and recognise achievements.

Charmine Hartel, a professor of organisational behaviour at the University of Queensland Business School, says employees will welcome change if it is properly managed.

"It's often said that people don't like change and that's simply not true," Hartel says. "The evidence is very clear that as long as people can see something in change for themselves and they feel they can cope with it, they are more than happy to do it. But they certainly don't want to be pushed through a change process that they don't feel they can handle. That's where you'll get some pushback."

Hartel says poorly handled change management programs leave people disengaged and cynical.

"I have seen it so many times," she says. "The business is not performing well, so what do you do? You spill a bunch of people out and you get some new ones, but you're going to have to do the same change later. If you're not taking care of your current people, it's not their problem, it's your problem of not being able to motivate and engage these folks. You will create the same problem a few years down the track."

This is why many change managers often have to deal with veterans who say they have seen it all before.

"If you managed well in the first place, then the only kind of change would involve moving the organisation to a higher plane and people would be part of that," Hartel says. "You align the values of the organisation with people's values so they say, ‘Being in this organisation is also helping me get some of the things that I want out of life'."

She says to create a more engaged workforce, one more likely to embrace change, managers should lead by example, give lots of coaching and development, provide high-quality feedback and foster collaboration and respect.

Otherwise there can be no effective change.