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Old Habits Die Hard

Richard E. Kristensen

[Synopsis: Sustainably successful organizational change is an all-too-rare phenomenon. While change is inevitable for corporate vitality, people exhibit differing reactions to change. Over twenty-five years of consulting experience has convinced the author that change can and must be managed in order for the outcomes to be positive for the organization. Change needs to be managed along a number of dimensions which are predictable, and by understanding how organizations and individuals react to change, managers and leaders can provide appropriate leadership to help manage change effectively.]

Year after year America's business leaders are introduced to an endless series of new and powerful sounding managerial concepts. By faithfully implementing these concepts, they are assured that their organizations will capture lost marketshare, restore former levels of profitability, ensure customer loyalty and leave their competitors far behind. As Ross Perot has been known to say, it's that simple.

Or is it?

Over the last several decades, corporate leadership has invested considerable time, energy and capital in implementing one or more of these attractive, seemingly "quick fix" solutions. Many an executive has eagerly hopped on the band wagon in search of promised answers. On their way to what they hoped would be the promised land of profits, business leaders trekked through the Valley of Acronyms in search of the perfect solution.

It was not that long ago that industrial engineering work management techniques were replaced by the principle of Management By Objectives (MBO). Then Quality Circles proliferated and corporate leaders were encouraged to embrace the notion of Management By Walking Around (MBWA). More recently, countless organizations committed themselves to Total Quality Management (TQM), Six Sigma, Just-In-Time (JIT) Management, Cycle Time Reduction, or any one of a number of similar programs. Today we regularly read about downsizing, restructuring, outsourcing, insourcing, the Inverted Organization, the Horizontal Organization, the Boundariless Organization, the Values-Driven Organization, the Virtual Corporation or business process reengineering.

These leading edge managerial concepts share several attributes. They all aim to achieve and sustain an optimal level of competitive and financial performance, efficiency, effectiveness and corporate vitality. Each offers seemingly powerful and compelling answers to the problems of running today's increasingly complex business organizations. Finally, each concept requires the addition of one final ingredient ... zealous and passionate leadership devotion.

Much as we might wish, successful management of today's corporation is neither simple nor unidimensional. The sophistication and complexity of the marketplace continues to increase ... competition is keener ... stakes are higher ... resources are limited ... and change is rapid and continuous. Business leaders face constant changes in the wishes of their customers, the actions of their competitors, the patience of their investors and the needs of their employees. Neat and instant answers often don't deliver the results implicit in their alluring descriptions.

Why Change Programs Fail

In practice, organizational excellence has more to do with capturing the energy and commitment of employees than with implementing some guru's appealing answers. The corporate landscape is, after all, littered with companies that have tried and failed at implementing each of the current leading edge managerial theories. Why then have so many fallen short of expectations?

The straightforward answer is because "old habits die hard."

Much has been written recently concerning the disappointing results of many corporate ventures into TQM, business process reengineering, downsizing, delayering or similar campaigns aimed at achieving organizational rebirth and renewal. A recent Wall Street Journal article cited numerous cases where financial results fell far short of expectations after large-scale layoffs. While many of these efforts were well conceived, actively sponsored and widely implemented, they failed to gain acceptance and ownership by employees.

It should be recognized that within many of today's organizations employees are feeling less secure, less loyal and are eager for a new style of involved leadership. Because virtually any type of organizational change requires people to act and behave differently, employees will either resist or willingly "own" the proposed changes. Therein lies the problem: in today's volatile business environment, enlightened organizations recognize that unless they continually improve and adapt, they face potential extinction. And yet, while change is inescapable, many organizations do not effectively manage change.

At its most basic level the issue isn't whether organizations will change, but whether organizations will change by design or default, by choice or by chance. Effective change must not only cause improvement, it must also motivate the organization to meet and accept future challenges with enthusiasm. Therefore, change must be viewed as a process - not an event or a program. When viewed this way, how the process is conducted is just as important as the results it produces.

To successfully turn leadership's vision into reality, change must be managed in three dimensions: the rational, the political and the emotional. The rational dimension describes for the organization the change that is anticipated. This is generally stated in positive terms and identifies what the post-change organization will look like. The political dimension concerns itself with the consequences of the anticipated change: either the avoidance or prevention of some inevitable adversity or, conversely, the intended benefits to the organization and its individual members for going along with the change. It is, in general terms, the business case to support the need for a change that has been rationally described by the organization's leadership. The third - and critical - emotional dimension involves individuals' personal feelings and governs how they will behave in reaction to the anticipated change. It concerns people's anxieties and their perceptions of threat or positive personal outcome. The emotions generated provide the energy that will be directed at either resisting or aiding the desired change.

Most organizations do a reasonably good job of dealing with the rational and political dimensions of change, but either fail to take into account or mismanage the emotional reaction to change. This is the area of greatest vulnerability in the change process and the one that is least well managed by most organizations.

In many businesses, long standing practices are almost always deeply embedded within the organization, especially those practices that are perceived to have contributed to past success. Resistance to change, therefore, is both natural and predictable. It is all too easy to extol the virtues and importance of change; and all too difficult to manage, encourage and support the practice of the new behaviors necessary to implement the desired change.

Managing Organizational Change

When viewed as a process, change follows a predictable pattern and the reaction to change can be, therefore, predicted and managed. Senior management needs to provide appropriate leadership, resources and communication (i.e., sponsorship) to help the organization get through the initial doldrums of change. Resolve is required to overcome the pessimism and doubt that cause most organizations to abandon change when they meet initial emotional resistance. Unfortunately, change management skills and techniques are generally not resident in the architects and implementers of organizational change.

In a very real sense, successful change management must be aimed at an organization's culture - that system of beliefs that governs how corporate values are translated into day-to- day organization behaviors. One must pay particular attention to those cultural norms that relate to trust, commitment, accountability, cooperation, loyalty, communication, responsiveness, flexibility, initiative and innovation.

The power of an organization's culture to thwart needed change cannot be overemphasized. Individuals at every level either behave in conformance to its norms or are punished by the prevailing organizational culture. Acknowledged failures in the implementation of Total Quality Management, business process reengineering and other performance improvement strategies have at their root cause the inability to convert the organization's culture/behavioral environment.

To a significant degree, the values and norms of an organization's culture are responses to the behaviors of its decisionmakers. This means that culture can be utilized consciously to support an organization's strategy. Decisionmakers have an impact not only by the decisions they make, but also: by the kinds of people they are; by the kinds of actions they take, as well as those they avoid taking; by what they require, encourage, discourage or forbid; and by what they ignore. The force of these fundamental management decisions is determined by the organization's perception of whether these are understood, whether they make sense, whether they'll work, and whether they are fair.

An organization's ultimate success or failure is often a direct result of its shared values and behaviors. What may have once been cherished and rewarded as appropriate behavior may have to be replaced by new and totally different action. The key for any organization, therefore, is to achieve higher levels of performance by improving its behavioral environment. An organization's behaviors can be said to be self defeating when its employees, individually or in combination, intentionally or otherwise, frustrate and work against the achievement of needed improvements. A corollary of this view holds that for an organization to improve its performance in any way, individual and collective behaviors must change. And, the most successful organizations are those which can change rapidly, smoothly and continuously.

Orientations to Change

Planned organizational change always starts at the top. The organization's leadership provides character, pace and direction to the organization ... and controls access to resources, rewards and recognition. To successfully introduce change, one must work with the entire system: all the elements that shape the perceptions, beliefs and reflexes of those who must carry out the strategy of the organization. Neither hand wringing nor delegation will accomplish this; only the organization's leaders can do it. An executive who understands the stages people go through in the change process is better able to lead the organization through this transition period.

The exhibit below identifies four possible orientations or reactions to the change process. Recognizing where employees are with regard to any particular planned change enables managers to determine the appropriate strategy to use i n getting those individuals to embrace the desired change.

Change Orientation Map

We all recognize the individuals who are in quadrant A (Can/Will). These are the people who are willing to and capable of making the desired change - and clearly the easiest to deal with. The mere announcement of the desired change, with appropriate rational and political impact, galvanizes these people into action. They are the natural leaders. They are the people who embrace and voluntarily lead the change process. Unfortunately, these people occur too rarely in most organizations. For any given change, they ordinarily represent less than ten percent of the total organizational population.

The next easiest group of individuals to deal with are those whose response to the proposed change puts them in quadrant B. These are people who are willing, but who are not yet capable of making the change. They recognize the need for change, want to adapt their behaviors accordingly, but lack the skills and tools to do so. These capabilities can be provided through training and improved management processes. When their deficiencies in capability are resolved, these people join the eager and ready group in quadrant A: together, they provide a powerful and compelling force within the organization for the implementation of desired changes.

The third group - those individuals who, in relation to a particular change, inhabit box C - are every change leader's worst nightmare! These individuals are capable of making the desired change, but they are not willing to change. They are married to the status quo, "don't perceive a need to change" or are somehow threatened by the proposed change. Change to them means leaving the tried and true, and these are people who will act on their instincts by trying to stay on safe ground. No amount of exhortation, encouragement, training or propaganda will move these people to take the perceived risk embodied in the proposed change. These are the people who will stay on the sidelines and wait out the change process, hoping that "this too shall pass." They will test management's constancy of purpose and patience, while the more vocal of them will engage in intellectual debate about the relative merits of the desired changes.

The strategy called for here is to lead by example. Situations need to be created which cause these people to change their behaviors and try the new work practices ... and their attitudes will follow as they experience success with the new behaviors. The other force that managers can employ in dealing with resistant but capable people is social pressure: as these people see more and more of their peers accept and respond to change, they may weaken in their resolve to resist and wish to share the success produced by the desired changes. As the critical mass of any organization's population moves towards acceptance and capability (category A) a groundswell of momentum is created that will cause those who steadfastly resist to become more and more isolated from the mainstream of the organization.

Finally, there are those people who are not capable or willing to change and, therefore, appear in quadrant D of the exhibit. These individuals are the likely casualties of the change process. Fortunately, in most organizations, these people are also a significantly small minority.

The architects of any change process should anticipate that upwards of 80-to-90 percent of the organization will find themselves in boxes B or C when the change is announced. The objective of the change management plan is to continually increase the number of employees who are committed and capable (box A) by moving people from the other boxes through the use of appropriate techniques. Leaders should keep in mind that at any given time they may be working with people, including themselves, who are in different stages of the change process. Only by recognizing the behavioral characteristics of each stage in the process will leaders be able to sort out what employees expect and need to be successful in implementing desired organizational improvements.

Recognition of these normal behavioral responses to change, however, is only the beginning of solving the conundrum of implementing successful organizational change. Our practice experience has shown time and again that an organization must have a ready inventory of tools, techniques and expertise to address these predictable opportunities. Communication about the proposed change effort must be clear, frequent and consistent. Leaders must demonstrate solidarity and commitment by their behavior. And reward and recognition must reinforce those who risk abandoning the status quo in favor of innovative and creative change activity.

The time to develop appropriate actions is in the planning stage ... not in the heat of battle! Leaders who are successful in transforming their organizations, more often than not, have a well-thought-out methodology ... a sound blueprint of the change process they will employ. In other words, they know not only the "old habits" they wish to replace, and what new, more productive behaviors they desire, but also the steps that will be used to introduce, nurture and reinforce the new direction.

Linkage Between Attitudes and Results

Successful organization change efforts do not have to be as few and far between as current corporate experience would indicate. It is not enough to commit to a lofty purpose, noble cause or critically needed financial results ... organizations are a collection of individuals who must be inspired to take the risk of change. The key is in not only managing toward a goal, but in simultaneously encouraging and reinforcing changes to behavior.

Too often companies fail to recognize the linkage between results and behaviors. Well articulated and strongly sponsored efforts to implement new ways of doing business are ultimately dependent upon employee acceptance and ownership. Gone are the days when top management could impose needed change and expect immediate results. Virtually every major performance-oriented initiative requires high levels of teamwork, functional cooperation and employee involvement.

The linkage between organizational results and behavior is, in the view of this writer, absolute. Business history shines with examples of corporate leaders who inspired results and managed with a keen understanding of behavior. Herb Kelleher, the founder and former CEO of Southwest Airlines, the upstart that is successfully transforming the airline industry, was recently asked what he did to consistently achieve such results. "We hire good attitudes," responded Kelleher.

Whether it's L. L. Bean, Federal Express, Hewlett-Packard, Harley Davidson - or any number of other equally successful businesses - outstanding performance is based upon employee behaviors. Their enviable results are clearly and firmly linked to not only new business processes but also to the way employees act and respond. The best strategies, brightest ideas and most innovative products are only as good as the readiness of the organization to implement them.

Without question, today's business leaders are faced with extraordinary pressure to adapt and alter the way their organizations do business. This seemingly exponential rate of change requires corporate flexibility, responsiveness and agility. By adapting behaviors in addition to new technologies and work processes, organizations can expect to achieve concrete, measurable and sustainable results. This same approach can create a corporate climate of flexibility, adaptability and action.

"There can be no progress except in the individual and by the individual," Beaudelaire told us. His counsel is no less appropriate for today's organizational leaders.

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