Thought Leaders
Driving Change That Works
A highly successful international firm that prided itself on a strong commitment to its employees began trimming its staff at the first signs of the downturn. One senior manager convened a meeting to discuss, at length, their strategy if cash went to zero. The organization extended its payout to vendors while requiring quicker payments from its customers. They implemented changes driven by fear, which resulted in spreading high levels of anxiety among workers. This approach cost them a high price in terms of reputation, staff, and potentially the bottom line.
At the same time, another company worth several billion dollars went directly to its employees in a series of meetings. They explained the state of the economy and how it was affecting their business. Then they posed a direct question: how can each employee help the firm to prevent layoffs? This company did not cut staff, and did adopt employee-created cost-saving measures that helped it to ride out the crisis. Today its financial health is at least as good as before the downturn.
Words fade quickly. What really matters is how you plan to support your change initiatives. What are you doing, rather than saying, to ensure success?
–Greg Shea, Adjunct Professor of Management; Faculty Associate, Center for Leadership and Change Management; Faculty member, Leading Organizational Change
Creating the Need for Change
"The second company, whether they were aware of it or not, followed precisely the principles of organizational change," notes Greg Shea, who teaches in Leading Organizational Change and is the co-author of Your Job Survival Guide: A Manual for Thriving in Change. "First, by addressing their employees directly, explaining the gravity of the situation, they created 'Felt Need.' That is, they helped them understand that changes had to take place. They then motivated those employees to embrace the idea of change, and to help devise and quickly implement change initiatives. Without that critical first step, creating a sense of need, change initiatives are set up to fail."
Felt Need, Shea explains, can take two forms. The first is a "Pull" sense — the need is based on the hope that change will enable a positive outcome. The second, based on fear, is a "Push" sense. The change it represents is a move away from something. "The so-called Burning Platform is a perfect example of fear-based change," says Shea. "You're motivating people with the survival instinct. The problem is that the motivation is short-lived. Fear is difficult to maintain; humans aren't hard-wired to remain in that state for long. If your building is on fire, people will move quickly. But once they get out on the street, how do you keep them engaged? Their impulse is to disperse."
But the Pull sense has its own limitations. "Motivation through hope is harder to get going. People are typically slow to believe. You've got to work to get them to believe in the need to pursue change. But once you accomplish that, they get excited, and that excitement produces energy that in turn sustains the change initiative," Shea notes.
Designing Support Systems
Felt Need, however, is just the first step. Any successful change takes place because it has a system to support it. "Let's say you want a more collaborative workplace. You can try to inspire change, communicating the need for better collaboration and the outcome you hope to achieve. But to make it happen you've got to structure it. You've got to train and reward your staff, and distribute information in a way that fosters collaboration. It's those systems that drive the change."
Shea, Wharton adjunct professor of management, finds that many participants in Leading Organizational Change are drawn to the "Inspiration" model. "They believe change comes only through great communication. They come into the program thinking, ‘If you can't get your message across, you won't get anyone to buy into the initiative,'" says Shea.
"I've reviewed hundreds of case studies. There are some really effective communicators of change, and then there are skillful designers of the systems that support the change. If I had to chose, I'd take the latter every time. If you're serious about succeeding, you've got to lead and manage change, not try to inspire it. Words fade quickly. What really matters is how you plan to support your change initiatives. What are you doing, rather than saying, to ensure success?
"In Leading Organizational Change, we present the research and best practices, but then the participants get right into working on their own challenges. It's a hands-on program about creating specific action plans for moving forward." When only an estimated 10 to 30 percent of companies successfully implement their strategic initiatives, Shea stresses that it is these action plans, and the knowledge of how to create and implement them, that provide the greatest value. "Our participants leave Wharton as more powerful change agents who can lead future strategic plans from design and implementation through to successful conclusion."
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