Three Critical Steps to Implementing Organizational Change
by
Larry Johnson, CSP
Change is never easy. Whether you are expanding your customer service efforts, initiating a new cost management system, launching a total re engineering effort, or adjusting to a merger, shifting from the old to the new is usually painful. Here are three ideas that might help that process:
- Clarify the reason for the change
In the 1996 presidential election, despite a Republican sweep of Congress two years before, Bob Dole lost by an overwhelming majority. Was it that the nation had suddenly become Democratic? Probably not. Was it that Dole ran a less-than-effective campaign? Maybe. Was it that the unemployment rate was at it’s lowest in 30 years and the economy had never been better? Absolutely.
Dole had the misfortune of running in a year when there was no compelling reason for change in the minds of the electorate.
Change puts people out of their comfort zones. They must learn new processes, establish new habits and develop new skills - which means that for a while they will be incompetent, inefficient, and awkward. Boy, that sure sounds like fun to me, doesn’t it to you? No wonder people resist change.
To overcome this resistance, people must have a compelling need to do so firmly established in their minds.
“But,” you may say, “I’ve told them the reason for the change.” Try this test: Select some employees at random, and ask them to give you, in their own words, the reason for the changes you want to make. If they can’t give you a reason for the change that would compel you to want to take the risk of changing, then it’s a fair bet that they do not feel compelled to change themselves.
- Keep people informed about all aspects of the change.
There is a cynical, Dilbert-like sign that pops up on office bulletin boards. It has a picture of a mushroom and a caption that reads, “They treat me like a mushroom here - they keep me in the dark. they feed me a lot of ‘mushroom food,’ and then they can me.” No one likes to be treated like a mushroom, and almost everyone likes to be “in the know.”
Unfortunately, it is conventional wisdom among many managers to only tell people what they absolutely are required to know to implement their little piece of the change. These managers reason that it’s not good to overwhelm people with too much information. Nonsense!
Nature abhors a vacuum. When there isn’t official information available, people will create their own rumors to fill the vacuum - and those rumors tend to be less accurate, more negative, and more distressing than any true information about the change that you’re keeping from them.
You might even want to start your own, true rumors by discussing various aspects of the change with your fellow managers or other OTD’s (organizational top dogs) while in earshot of line employees. Given human beings’ propensity for gossip, this “true gossip” will shoot through your organization faster than any official announcement, memo or e-mail.
- Measure and reward what you want to change.
In 1994, Boeing executive Gordon Bethune took the reins of Continental Airlines. At the time, Continental was a company in distress. Hated by it’s passengers, it’s unions, and it’s shareholders, the company was on the verge of bankruptcy. Bethune realized that to survive, Continental would have to start giving customers what they wanted, and what customers wanted was an airline that was reliable. In other words, an airline that would get you there on time, every time. Continental had one of the worst on-time arrival records in the industry.
On-time arrival became the mantra of the new Continental Airlines. Since arrival and departure times are already measured by the Department of Transportation, Bethune had only to reward improvement performance and he did that the old fashion way - with money. He promised every employee that they would be paid $65 for every month that their on-time performance was good enough to place them in the top five nationwide, according to Department of Transportation figures.
You may say that that’s an expensive proposition. Continental has 40,000 employees, which at $65 per head adds up to $2.6 million. But their research showed that the loss of customers due poor on-time performance was costing them $5 million per month. If spending $2.6 million could correct the problem, it would be a win/win for everyone.
And it worked. They announced the program in January, 1995. And by the end of the month, their on-time performance had risen from 61% to 71%. In February, it jumped to 80%, which placed them in fourth place nationally. Today, Continental regularly ranks at the top of the rating in on-time performance. This, along with other changes Bethune has instituted has turned Continental around from being one of the worst airlines in the industry to one of the best (Source: Fortune Magazine, 5/25/98).
Of course, you may not have the margins to pay every employee a bonus for making progress toward a desired change. But as we all know, money is not the only motivator. Recognition, days off, flex time, praise, desirable assignments, increased responsibility, and opportunities to have input into decisions are just a few ways to reward the changes you want.
Two important things are critical, however:
- You must measure progress toward the change outcomes you desire. There’s an old rubric that says, “What gets measured, gets done.” Bethune says, “What gets measured gets managed.”
- You must reward progress toward those outcomes, based on the measurements. People will strive to support your change efforts when they can see what’s in it for themselves. And make sure the links between their progress and the rewards are clear and easy to understand. (The $65 bonus for Continental employees was not included in the employees' regular paychecks where it might be overlooked. It was issued as separate check. Additionally, the taxes taken from this $65 were deducted from the regular paychecks so the bonus check was a simple, clear $65, period!).
So as you implement changes in your organization, ask yourself these three questions:
- "Could anyone in this organization tell me what we are trying to change and why?"
- "Could anyone in this organization describe the plan for the change and any changes to that plan?"
- "Could anyone in this organization explain the direct and indirect rewards he or she will receive for making progress toward the desired outcome of the change?"
If the answer to all three of these questions is “yes”, perhaps your change efforts will be rewarded with success. If, on the other hand, the answer to any of the questions is “no,” you’ve probably got some work to do.
Copyright Larry Johnson. All Rights Reserved.
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