Truly transformational change takes more than adjustments to soft factors like your corporate culture or leadership style.
Anyone who’s tried to quit smoking or stick to a weight-loss regimen knows that true change is hard to implement and even harder to maintain. Habits, routines and attitudes ossify and anchor themselves deeper into the psyche each time they’re repeated. Altering such long-standing programming is difficult on a personal level, so what does it take to effect lasting change within an organization composed of many individuals with disparate, even conflicting interests?
A memo or a short meeting is fine if you want your employees to use a new color scheme in their pitch decks or tell them to avoid certain funds when building client portfolios. Such small changes require little to no buy-in or follow-up. However, as the desired changes and the potential impact on your organization grow, so too does the difficulty in implementing them in a meaningful, lasting way. Truly transformational change takes more than adjustments to soft factors like your corporate culture or leadership style. You’re going to have to address the hard elements first.
Change Is Hard
In the 2005 piece, “The Hard Side of Change Management,” Harold Sirkin, Perry Keenan and Alan Jackson cite studies showing that two out of three transformation initiatives fail, which they largely chalk up to a lack of focus on hard factors relating to the initiatives.
Sirkin et al. describe the characteristics of the hard factors of change management as measurable in direct or indirect ways, easy for companies to communicate their importance, and capable of being influenced quickly. The four most critical factors can be summed up by the acronym DICE, or:
- Duration: The time between reviews of the initiative’s progress toward predetermined milestones
- Integrity: How much companies can rely on teams to complete change projects successfully
- Commitment: The visible backing of influential executives and the enthusiasm of the people who will be affected by the change
- Effort: How much additional work will be required from staff involved in the initiative
According to Sirkin et al., the overall duration of the change initiative is less important than the time between reviews of the initiative’s progress. The longer a project runs without review and/or oversight, the greater the risk of problems arising. Mandating frequent reviews gives executive stakeholders more opportunities to identify potential issues. No more than eight weeks should pass between reviews for simple initiatives, while more complex projects may necessitate bi-weekly evaluations to ensure they stay on track.
Evaluating change initiatives should be driven primarily by a set of concrete milestones on set schedules. That said, rather than drafting plans that describe day-to-day activities in granular detail, milestones should describe where you want the project to go by a certain point in time, not dictate precisely how to get there.
People ultimately determine whether a change initiative succeeds or fails. The project’s sponsors must assemble a team of capable employees with the right mix of skills and knowledge, particularly if the project is complex and/or will have significant impact on the business.
Begin by writing a list of desired criteria for potential team members, soliciting help from HR, fellow executives and managers across the firm. Selecting the right team members isn’t enough, though. It’s equally critical to establish clear roles, responsibilities and time commitments for all members and stay in regular contact for the duration of the project.
Sirkin et al. argue that continuous visible commitment to change initiatives is essential to their success, a sentiment echoed by McKinsey research. Achieving any kind of large-scale change requires more than a company-wide announcement or meeting. Enthusiasm for change begins at the top of the ladder, and ground-level personnel will look to executives for cues as to whether the initiative will stick.
Getting buy-in from stakeholders before undertaking a project is important, but that initial excitement doesn’t last forever. Maintaining enthusiasm for a project means talking it up in meetings, at the water cooler, at happy hours and so on.
There are three paths forward for any new initiative. You can either pull employees away from their existing duties, make them work more hours or hire new people to complete the project. Pulling employees away from their duties can disrupt workflows. Hiring new people costs money and may delay the project’s kickoff until they can be trained. Otherwise, the remaining option is to give your already busy employees more to do.
Sirkin et al. suggest that no employee’s workload should increase by more than 10% as a result of the initiative. Any more and you risk causing burnout, fostering resentment and forcing employees to choose between devoting their best efforts to the project or their job. A solution, albeit an imperfect one, is to negotiate with the employees’ managers to shift some of their workload to other members of their team. Whatever the case, it’s important to take your employees’ existing workloads into account before enlisting them in a change initiative, as failing to do so could harm the project and cost you employees.
Change Is Hard But Not Impossible
Effecting transformational change is hard. There are as many models for change management as there are companies, but some of the same principles show up in almost all of them. Milestone-based planning with regular reviews, careful selection of team members and leaders, demonstrating continuous executive buy-in whenever possible, and making sure to not overload your employees are all easier said than done, but will do wonders for any change initiative.
The original article in WealthManagement.com appears here.