Wharton@Work

February 2011 | Customized Learning, Senior Leadership

Managing Change Initiatives: How-tos for Greater Compliance

According to research by IBM, most CEOs consider themselves and their organizations largely ineffective at implementing change. The Making Change Work Study cites a failure rate of almost 60 percent, with just 61 percent of CEOs reporting that they managed change well in past projects.

The study also reveals that the percentage of CEOs who expect substantial change climbed to 83 percent. The gap between the need for change capability and actual capability has more than tripled since the last study, in 2006. But change initiative failure rates aren't just numbers. They represent lost opportunities, strained budgets, and a discouraged workforce.

"Many of these failures can be attributed to change strategies that remain stagnant," Wharton Professor of Management Sigal Barsade notes. "Even as executives realize they're not effective at implementing change, they continue to approach new initiatives with the same methods they used in the past. My research points to a different approach, one that can achieve the results so many organizations want and need — but as yet are unable to achieve."

Managing Employee Responses

Barsade describes a group of participants in Wharton's Leading Organizational Change program. "I ask them to imagine getting word that their division is being restructured, and then to describe their reactions. What I hear is that they first feel it — in their gut. This reaction is completely in line with my research, which clearly shows that change is an emotional process. Those leaders who understand this, and who develop techniques that address the very predictable emotional responses to change, will be much more successful in implementing change."

The predictable responses Barsade refers to when employees are dealing with change include denial, anger, resigned acceptance, and adaptation. "Leaders who expect these responses, and who know how to manage them at each stage, will be more successful. For instance, allowing employees to vent their anger helps them move more quickly through that stage. But you don't want to create a group venting situation, which creates emotional contagion in which one person's negativity is spread like a virus to other employees (see Barsade's Nano Tool in this newsletter for more information on emotional contagion). Meeting one-on-one allows the employee to vent while giving you the chance to create positive contagion."

Selling Change Right

"But it's also important to approach change correctly from the beginning," says Barsade. "You need to sell the reason for the change. And to do that effectively, you must create an emotional motivation to buy into it. Remember that a response to change is not just cognitive — the emotional response will either create acceptance or resistance."

In Leading Organizational Change, participants have the opportunity to create sales pitches for their change initiatives. A utility executive needed to build more electrical towers, and needed to convince the communities where the towers would be located that they should accept them. His "cognitive" sell, as he described it to the group, was simple: "more voltage will be good for your cities." But that was met with very strong resistance, and responses such as "not in our neighborhood."

Then he developed a pitch that appealed to emotion. He showed a child in bed with a teddy bear, bathed in soft light. The light went out, and the child was heard repeatedly calling for mommy in the dark. The executive then noted the need for light. It was the same sell presented in a markedly different way. "These pitches are harder to develop," says Barsade, "but their acceptance rate is much higher. Leaders whose change initiatives succeed don't necessarily have better ideas. What they're better at is selling them by moving people."

Using Emotional Contagion

Another way to increase your chances for leading change successfully is to find at least one person on your team who understands the need for the change. That person can spread enthusiasm about the change to others by speaking and acting positively. Model positive emotions yourself, too, so others will buy in.

Barsade stresses, "Executives need to take emotion seriously as a source of important information. Understand how people behave when feeling different things and learn techniques to best interact with them. You would never think of walking into a major presentation to ‘wing it' without the right numbers. And yet people do this with emotions. They encounter someone who's predictably angry, but aren't equipped with the knowledge of how to diffuse that anger. Spend some time learning about predictable responses, and learn how to manage them."