Organizational Change Starts with Individual Employees

Change is inevitable, but many companies don’t handle it well. How organizations treat workers during a change initiative determines ​how successful the change—and the organization—will be, experts said in a recent webcast on “Leading People Through Change.”

Connie Hritz, senior vice president of research and development for Omega Performance Corp., and Nancy Moore, senior consultant, led the webcast participants through a presentation on why some change management practices are unsuccessful and how a company’s top leaders can make sure their managers are prepared to guide employees to accept change and put new practices into action.

A quick poll found that 70 percent of the webcast’s participants experienced more than four significant changes in their organizations at the divisional level in the past five years. As for Omega Performance, a business consulting company, it has stopped predicting how many changes companies can expect—change happens so frequently that it is inevitable, Hritz said.

While change might be inevitable, companies don’t necessarily expect to succeed at it. Hritz quoted an IBM report, The Future of Banking, which found that 61 percent of banks expected radical and continuous change in the banking industry during the next two years. However:

• 15 percent said they were very successful at managing change.
• 32 percent said they were successful.
• 33 percent said they had some success.
• 15 percent said they had little to no success.

Corporate Strategy Board research concurs, finding a 50 percent chance that change initiatives at Fortune 1000 businesses will fail.

“(Omega’s) research indicates that 70 percent (failure rate) is not uncommon,” Hritz added.

Why Businesses Fail at Change

Omega has found that unsuccessful change initiatives are marked by four traits:

Being too linear. Managers work the project plan from start to finish without making any adjustments.

“I correlate this to building a home,” Hritz said. “If it’s a new home, that’s not too hard. Your plan may work from blueprint to move-in.”

But if a homeowner is remodeling a home, that’s real change—he’s working with something that already exists, she said. He may find mold under the carpet or other costly surprises.

“You have to adapt to change within change,” Hritz said. “Be flexible enough not to work from beginning to end.”

Being too top-down. Executives relate their vision of what the end result of the change initiative should be, but don’t give direction or communication on how the managers should make the change happen.

Being too “big picture.” The organization’s leaders have a vision of the change but no idea of how that change will affect the individuals who work there. “You have to deal with the people; you must have their commitment to put through the change,” Hritz said.

Being too insular. Only 40 percent of organizations seek help with change initiatives, Hritz said. But businesses need objective help. In fact, Omega, which consults on change management, hires facilitators to help them through such initiatives.

How Businesses Can Change Successfully

Change initiative success starts with individuals, Hritz said. “Work first with individuals because they have to commit to the change in order for the team to commit to have movement in the organization,” she said. Harvard Business Review research shows that when a change initiative is introduced, only 15 percent of the workforce embraces it immediately. Sixty percent are uncertain and 25 percent are heavily resistant to change.

“That’s important, because (the resistant 25 percent) can sabotage what you’re trying to do. But if you put in place the right activities, they can be moved to commitment,” Hritz said.

Moore introduced a framework of activities companies can use to lead change and help individuals commit to the change. The work begins with assessment, she said.

There are six states of change readiness: indifference, rejection, doubt, neutrality, experimentation and commitment. Evaluate your workforce to find out where your employees stand. Then you’ll know where you need to do the most work.

Also, examine these 10 dimensions of change at your organization; depending on the strength of these traits and skills, they can either help or hinder change initiatives:

• Culture
• Coaching
• Direction
• Communication
• Accountability
• Resilience
• Skills and Knowledge
• Recognition
• Managing projects
• Involvement

Once companies have assessed their employees’ commitment and the strengths and weaknesses of their dimensions of change, it’s time to customize and implement the change.

Leaders must evaluate how they feel personally about the change, Moore said.

“If you’re going to lead others through change, you need to understand where you are at, how you feel, what’s happening and what you’re required to do,” she said.

Most importantly, be honest—or “authentic,” as Hritz says—about your feelings with your team.

Executive leaders need to be great communicators when they are leading their team through change, Hritz said. They should roll out a clear, universal, consistent message to everyone in the organization at the same time, even across multiple sites and locations. Managers should then meet with their teams and then again one on one with each team member.

While communicating that message, Hritz said, leaders should explain the change and why it is needed, be truthful about the benefits and challenges of the change, listen and respond to employees’ reactions and implications, and then ask and work for individuals’ commitment to the change.

Managers Must Be Good Coaches

A necessary key is making sure managers are equipped to coach their direct reports toward commitment, Hritz said. One-on-one conversations with each team member help each one analyze how the change will affect him or her (and his/her colleagues, customers and boss), determine his/her level of commitment and then help choose how he/she will act.

There’s a difference between coaching through change and coaching on how to sell something, Moore said. “Here the coach helps them process their reaction to what’s happening.

“There is a fair amount of emotion that goes along with this. It requires higher skills,” Hritz said.

When webcast participants were polled on which coaching skills they found most challenging, 42 percent said maintaining authenticity, 30 percent said creating dialogue and 28 percent said solving problems.

Hritz and Moore said the findings meshed with their experience helping companies through change initiatives. Their advice:

• To help maintain authenticity, managers must empathize with the employee, manage their own emotions and create realistic expectations.
• To create dialogue, the manager can try questioning the team member to encourage self-discovery, demonstrate listening by paraphrasing and provide specific examples to manage expectations.
• To solve problems that might crop up, link outcomes to specific behaviors, handle obstacles by asking instead of telling and maintain forward momentum.

Beth Mirza is senior editor for HR News. She can be reached at beth.mirza@shrm.org.