Change and dealing with macro and micro economic disruption is the only constant in this VUCA (volatile, uncertain, complex, ambiguous) world - taking over a relevant, vibrant, and kicking reality, and, phasing it out the next moment. Thus, the need to adjust to this world is one of the prime business imperatives and concerns. This need arises when there is a crisis, a new technology is here to stay, new opportunities are on the horizon, during mergers and acquisitions, or, in reaction to external pressures viz. customers, changing government regulations, financial markets etc. It is mostly undertaken to improve financial and/or operational metrics, and, affects a significant part of the enterprise. As we are all aware, change is here to stay and cannot be ignored.
This truism takes a further and an even more complex paradoxical change within itself. The change is moving, its energy fuelled by ‘dynamic equilibrium.’ It is akin to riding a bicycle and juggling many balls at the same time. The era of solid colours of perceptive change is bygone, and, the only colours that are complex are the ones (often without a name and earlier existence) that are needed to be recognized and identified. Change acquires various forms, and, is the new normal in today’s business world, and, with disruption all around, it is going to be more frequent and continuous. Going forward, change is going to take various forms, and, shall be loaded with complexity and ambiguity. It is going to be challenging, combined with responsibility for businesses to navigate in such a quagmire. Groping in the dark would not give lasting results; handling it with full responsibility to achieve definite success should be the ultimate goal of businesses.
The current scenario is that only one-third of change initiatives clearly meet the goals set by the organisation, or, as determined by HR leaders. Half of all major enterprise changes are clear failures. 50% - clear failure, 34%- clear successes, 16% - mixed results (n = 305 organisations1). The data clearly indicates that managing transition effectively is a big task for the leaders and human resources. The expectations around positive change management is the new requisite, however, the above data still proves that organisations have not yet prepared themselves to emerge as winners. There is a need to pause and think, as failure in this arena is expensive, disruptive, and hard hitting, and, to devise a mechanism which leads to clear cut success.
Therefore, the onus on the CHRO to align with businesses for successful implementation of change is greater than ever before. With the focus shifting, the challenge before the CHRO to manage and steer the workforce through change would be mammoth. The well‑known models of change management viz. Kotter’s Eight-Step Process for Leading Change and Prosci’s ADKAR® model are too direct, top down, and, highly lengthy processes. Work today is multi-directional; with complex reporting lines and limited predictable markets, and, these models do not take into account the complexity involved in most changes, and, lack the sensitivity to deliver it. Change tactics are driven by the leadership team which is far away from the workforce, and, therefore do not appreciate the unique needs of people undergoing change.
In Quotes “Work today is multi-directional; with complex reporting lines and limited predictable markets, and, these models do not take into account the complexity involved in most changes, and, lack the sensitivity to deliver it.”
We need to look at a new approach to change management which is bottom-up than being thrust from the top. Employees need to be seen as co-pilots of change, rather than resources to be managed. The idea is to involve them and make complete use of their skill, expertise, uniqueness and experiences. If we closely look at the determining factors that lead to successful change management, they are mostly controllable, and, can be influenced by HR. So, besides handling HR, the objective of the CHRO should be complete and constant alignment to the business, so that stakeholder management for effective and fruitful change management is achievable.
We believe that some assumptions are sacrosanct and need to be followed for successful implementation.
1. Involve company personnel in planning and implementation
Engage employees in designing the change strategy right from scratch, from conceptualization of plans to implementation. This shall help to understand and bring to surface, the potential blocks to change adoption. Companies struggle to bring in the right people, who shall be instrumental in driving the change successfully. However, once identified, they should be involved at each stage of the project. It should be decentralized, and, middle managers should be equipped with sufficient inputs to make them empowered in shaping the change initiatives.
2. Make flexible change teams
Instead of having a dedicated change management team have flexible change teams. Their composition shall be need based, depending on each unique case; they shall be mobilized by HR on the basis of their unique mix of skills; and the composition of the change team shall vary with each new initiative making it a high-capacity team. This shall definitely increase the probability of success.
3. Make long term sustainable change capability
Leader-created implementation plans have limited or negative impact, as leaders cannot see how change really affects employees. Organisations should let employees own the implementation plans, which can improve the success rate of change by up to 11 percentage points. Employees are able to define the success metrics and details of implementation plans, while the organisation provides guidelines to ensure alignment with the overall change goal.
4. Reaching out with intuitive humane communication
A frank conversation with all the managers and their team shall go a long way towards establishing their allegiance to the change initiative. Typical top-down communication strategies aimed at conveying employees how to change by repeating change messages often, and, through various channels, does not enrol them in the bandwagon. There should be more interaction, dialogue, and, talks bearing personal relevance to gain their support and commitment for the execution of the project. There shall be some resistance to change from different quarters, and, it is imperative to identify those and convert them to change champions.
The Change Management Influence Map can be a handy tool to map people from different businesses and functions. A strategy can be devised to employ executives falling in different quadrants to positively impact change.
- “Opinion formers” can be deployed to create positive view about the change process, which shall engage others in the company.
- “Champions” are those stars who by their high influence capacity shall be able to guide and lead others who are fence sitters.
- “Resistors” have to be worked upon separately or through champions in order to bring them in the fold.
The Success Stories
Let us look at some of the examples where change management was planned and executed with finesse and achieved its objectives:
It is very difficult to assess the impact of change initiative on different teams and units. If one cannot foresee it, one cannot successfully steer it to successful implementation. Understanding that most change initiatives cover multiple parts of the organisation, Schneider developed project change charters as a way to look at the impact of change across multiple groups or business units.
The project change charter is a standard template that the organisation uses to document the likely impact of a new change project before the initiative begins. All project sponsors are required to fill out this document as part of their standard business case for a change. The information collected includes items such as the total amount of training required, whether there will be a pilot programme before full rollout, and, how the senior leadership will be involved.
A critical element of the charter is to assess the “impact on users,” and, check how the change will impact/ affect individual roles within the organisation. For each role affected by the change, the charter is designed to gather information on the degree of change proposed by the project across two dimensions:
- The degree of change, expressed in percentage vis – a – vis the user’s work processes affected and measured on a high, medium, and low scale
- The kind of change suggested for each role. The nature might be “work” (changes in work processes), “importance” (changes in responsibilities and ownership), “life” (changes in morale or performance), or in some cases, could be a combination of all the categories.
Having prior information, in such detail makes the change leaders confident and in control to direct the initiative to victory. This was the secret for successful change implementation at Schneider.
Culture Change At Aetna
Aetna Inc. is an American managed health care company, which sells traditional and consumer directed health care insurance plans and related services, such as medical, pharmaceutical, dental, behavioural health, long-term care, and disability plans. Aetna was struggling on many fronts, viz. customer issues, lawsuits, eroding rapport with physicians, mindless acquisitions in early 2000s, all of which was making the company lose around USD 1 million every day. All the issues can be ascribed to its culture, which had made its employees over committed, risk averse, thus encouraging averageness and doubtful of the outsiders. In 2000, John Rowe took over as the 4th MD of Aetna in 5 years, and, unlike his predecessors, visited his people and involved them in the process of planning the strategy design and execution, such as social visits, informal meeting, and impromptu telephonic discussions. All this led the team to identify Aetna’s biggest problem and also its strength. This gave insights to the MD to manage his approach around planning the company’s turnaround policy. And, he realized that instead of cost cutting, it would establish itself as a strong brand by serving and attracting patients and health care providers. This shall require massive reshuffling and in the process job security shall not be guaranteed.
The top management started working on small but effective behavioural changes without naming it and showcasing it as “cultural change.” They named it “New Aetna” which emphasized the importance and total commitment to customers by showing a quick response time. Also, the sense of pride was instilled in the Aetneans, a strength that was long lost, and, had a lasting impact on employees. In the coming years through surveys, observations and discussions, it was confirmed that employees of Aetna felt rejuvenated and fervent about the state of affairs. Very soon, the company regained its lost glory and was on its path to success, and soon, started generating revenue which was 5 x to the previous one with more than 5000 job pruning done and well accepted.
It takes years to change how people feel, behave and think, and, it is worth investing into because an old culture can suck companies into oblivion. Culture does give a competitive advantage and platform to the company on which its strategy can launch and flourish. In order to cascade and sustain change, 4 building blocks of culture change by McKinsey- role modelling, a compelling story, reinforcement systems and skill required for change- should be deployed.
We are always under the impression that change management happens or has to happen around big enterprise changes only. To drive positive sales behaviour for profitable results, to implement automation in HR department, to implement “code of conduct” policy, to do delayering of levels in the system; are all change management. Establishing targets, establishing systems around it, building processes, and implementing them should be a part of everyday management routine. Change should not be a disruptor, but a part and parcel of one’s job, and executives should plan in advance the change they shall manage in the coming month or quarter. Organisations should be change responsive, perfecting the change implementation cycle and remain prepared to take on the next challenge.
Is HR solely responsible for cultural change?
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