It's not a big secret that most people are averse to change, since it's more comfortable to retain the status quo — even if it's not working. This creates a significant challenge for today's executive and family business leaders, especially those with the vision to make transformational changes; having great new ideas is one thing, but understanding how to get buy-in from those who must implement them is another.
Starbucks CEO Howard Schultz is considered a visionary leader, and he recently announced a radical change to the way the company operates. This year, following the example of fashion brands that have haute couture and mass-market lines, Starbucks will start opening luxury Reserve stores where customers can get a more rarefied and expensive assortment of coffee. It's an interesting concept, but like anything else that's new, the employees who will roll it out must embrace the change, or it's likely to have a quick and painful death.
Transformational change has been defined as a shift in the business culture of an organization resulting from a change in the underlying strategy and processes that the organization has used in the past. The Starbucks example is certainly transformational, but who's to say what might fall under that heading at other companies? For your business, monumental change could be anything from using a new software program or dealing with a total rebrand to dealing with minor or major organizational restructuring.
According to the world renown consulting firm McKinsey and Co., the ability to drive transformational change — such as moving from good to great performance, cutting costs, or turning around a crisis — is a key source of competitive advantage. Yet the firm points out that despite the 25,000 books published on the topic, one in three change programs fail.
Therefore, to ensure the successful outcome of your change initiative, it is imperative as a leader that you assess and invest in your organization's most important resource: human capital.
Strategies for implementing change
Psychologists have identified three basic fundamental human needs that impact an individual's reaction to change in his or her environment. They are: a need for control, a need for inclusion and a need for openness. While the level of need for these factors is different for everyone, there is always some element of each of these in an individual's reaction to change. If a change program does not address these issues, it is likely that you will encounter a negative reaction from your employees, ranging from ambivalence to outright opposition.
Finally, when rolling out a comprehensive organizational change program, it is important to identify and incorporate the necessary elements to ensure a successful outcome. Research in the field of the psychology of change management suggests four basic conditions have to be met before employees will positively embrace change in their behavior. They are:
A compelling story: Employees must see the point of change. Decisions are often made in the C-Suite based on facts that are not readily available to the rest of the work force you expect to implement these changes. When appropriate, you need to be as transparent as possible to ensure your employees are engaged and committed to the change process.
Role modeling: Employees must also see colleagues they admire modeling the desired behavior. Early on, you want to engage key employees who can have positive influence on the rest of the team.
Reinforcement systems: Organizational structures, systems, processes and incentives must be in tune with the change.
Skills required for change: You must consider the training that will be needed to ensure employees have the skill to do what is required of them as a result of the change.
Also imperative to leading employees through change — especially transformational change — is creating an engaged work culture that is open to new ideas. There are three keys to doing that: confirm, assess and communicate. It's critical not to make assumptions, to manage expectations and to break down complex behavior.
Since change is so hard, it's definitely important to involve those who are going to be affected by it in the process of determining how it will be implemented. Executive leaders should present a few options and give employees the opportunity to provide feedback and suggestions, really listening to what they have to say. There's no question this discussion will be worthwhile, FOR employees are five times more likely to embrace change if they're involved in the process of making decisions about it.
Denise P. Federer, Ph.D. is founder and principal of Federer Performance Management Group. She has 27 years of experience working with key executives, business leaders and Fortune 500 companies as a behavioral psychologist, consultant, coach and trainer. Contact her at: [email protected]