ADDRESS THE REALITY THAT CHANGE SUCKS
Change sucks.
When people insist that change is good, I tell them that I’m fine, but if they wish to change, go ahead.
Similarly, when organizations talk hyperbolically about all the benefits that will accrue when they change their structure, culture, software, and so on, I don’t doubt their sincerity but I question their perception. Organizational change can be brutal. People lose jobs and friends. They have to adapt to new ways of working. They must adjust to new leaders and styles of leadership. Many times, they feel that the company has changed for the worse—that the organization and culture they once loved no longer exist.
More succinctly, let me repeat: change sucks. It takes us to places unknown and requires us to learn new things. In the process of learning we often fail, embarrass ourselves, and suffer discomfort as we leave familiar routines and beliefs behind.
Dealing with change, then, is emotional. Too often organizations approach change from a spreadsheet perspective. The numbers say cut staff, the cuts are quickly made, and people who have been with companies for years find themselves suddenly out of work. Organizations may believe they’re handling downsizing as humanely as possible, but in reality, it is often done impersonally with little regard for feelings—the feelings of those being let go and the friends of the departed who remain.
Change is necessary and can be enormously beneficial, but it should be undertaken with the story in mind. This is the only way to mitigate change’s harsh realities.
Leaders tend to be myopic about the numbers, especially when those numbers go up or down in major ways or when a significant pattern is detected. They analyze them every way possible and then create a change strategy that addresses numerical priorities.
But there are stories associated with these numbers that also must be addressed. Some of the stories are related to what I’ve already alluded to—the effect a given change will have on people. Other stories are related to interpreting what the data suggests. People possess a combination of deep knowledge and broad experience that helps them talk about the data in illuminating ways. They can relate stories about similar data-based trends in the past, about how a given leader failed or succeeded to address problems and opportunities. These stories create a context that is crucial in helping management make the right decisions.
Thus, as we contemplate change, we need to obtain the story behind the spreadsheet.
Money, Influence, and Fame
Changing by numbers is like painting by numbers. You’ll end up with something that looks good on paper but doesn’t deliver on its promise. Contrary to what some organizations believe, change is about more than percentages: downsizing by 15 percent, moving 25 percent of the workforce onto teams, growing by 18 percent, transferring 12 percent of human functions to machines.
Organizations often embark on change strategies with target percentages in mind, but they fail to achieve lasting and impactful results unless the people issues are integrated into the planning. These issues are diverse and multifaceted, but before getting to them, let me share a story about why organizations may recognize the need to change, may create programs to facilitate this change, may talk a lot about the need to change, but they don’t achieve their goals.
By 2005, the effect of digital on the newspaper business was clear. Craigslist, Google, and many other sites were siphoning away advertising revenue, making the traditional model untenable sooner rather than later. Three years earlier, at a newspaper industry convention, I forecasted this likelihood and suggested a number of initiatives, including investing in technology, purchasing digital start-ups, rethinking their business model, and putting their best minds to solving for the future versus milking the cash cows of the past. Years later a senior executive at the Chicago Tribune, who had been at the convention, told me he wished they had listened.
In 2010, I spoke with a major magazine publisher, telling them they were no longer in the print business where they made money from advertising but in the multimedia business where they had to make money from advertising, commerce, subscriptions, and services. Seven years later after seeing revenues halved, the closing of many magazines, and their loss of relevance, the company began to reinvent with positive effect. Imagine how much more successful they would have been if they had moved early. Why didn’t they change when the evidence was so clear that they had to transform themselves?1
Because change is hard. You can’t change an organization just by talking about why change is necessary and providing a blueprint for that change. You have to integrate people’s desire for money, influence, and power into the mix, and you have to incentivize them in ways that are aligned with future change goals rather than goals from the past.
Data Can Be Strong, but the Will Is Weak
It is key to recognize that everyone looks at change through the lens of what it means for them. How do they fit in, what role do they serve, and do they agree with the change?
In 1999, Leo Burnett’s Jack Klues began the effort to create Starcom, a separate media operation from the main ad agency. This move represented a radical change, but one that was critical since media tools and technologies were becoming increasingly complex and required a significant development investment—an investment that wouldn’t have been possible if the media operations remained an integral and profitable part of the parent company.
Later, Jack recognized the need to create more change—a new division of Starcom that focused on internet media planning and buying. As a cofounder of Giant Step, the digital arm of Leo Burnett, Jack asked me to help launch this digital group, called Starcom IP. To implement this change, Jack and his management team incorporated the following people-centric principles:
1. Starcom IP would report directly to the global CEO and not to Starcom management, even though initially it consisted of only two people to Starcom’s five hundred.
2. The leadership of Starcom IP would be on the board of Starcom to help influence the overall company and also be aligned with Starcom’s overall goals.
3. The best talent hired for Starcom would be given an option to work for Starcom IP.
4. Both Starcom and Starcom IP were given financial goals, but they were different goals. Starcom focused on growth and profitability while Starcom IP focused on generating clients and credibility. Both management groups were incentivized to help each other through revenue recognition and benefits.
Starcom IP was quickly and sustainably profitable, and it grew quickly. Why? Because the needs of the new company’s people were addressed right from the start. Its leaders were given a great deal of independence as well as power (board membership), provided with talent and not just financial resources, and encouraged to build credibility and depth of expertise first and make money second. Everyone at Starcom IP felt their concerns were addressed and their goals clear and appropriate. With everyone aligned, the company was able to change its approach to media quickly and effectively.
RENETTA MCCANN
Never Forget Your Roots When You Get Wings
When a company has soul, it’s not just big-hearted but big picture. It refuses to be myopic about delivering short-term results, recognizing that sometimes the short term isn’t as important as long-term objectives. A soulful company also encourages its leaders to sacrifice—to pass on plum projects when they believe another team can do the project better.
Over the years at Burnett, the evolving culture encouraged leaders to find a balance between short-term and long-term goals, to view other teams and functions as collaborative rather than competitive. Here’s an example of one leader who exemplified these soulful attributes.
In the mid ’80s I would take the Number 6 “Jeffrey” Bus from the Leo Burnett building downtown to my home in Chicago’s Hyde Park neighborhood.
Renetta McCann often waited at my stop and rode the bus to work with me. She was a couple of years my senior at Burnett, but we were both in the lower echelons of the company and we commiserated and complained about senior management. We vowed that if we ever occupied leadership positions, we would not become political but keep the good of the company and the people who got the work done paramount.
By 1999 Renetta McCann was the CEO of Starcom in the United States. Starcom was one of the two biggest media and buying companies, placing billions of dollars, and Renetta was one of the most powerful African American women in the nation.
As mentioned, I had been invited by Jack Klues, who was the global CEO of Starcom and Renetta’s boss, to help him launch a digital media buying-and-planning unit called Starcom IP. Renetta would run all the nondigital revenue, which was in the hundreds of millions of dollars, and I would run all the digital revenue, which at the time of our launch was barely above zero.
Within three years and despite the dot-com implosion, Starcom IP grew to over one hundred employees and multiple millions of dollars of revenue at a healthy profit margin. In addition to the amazing team of Tim Harris, Jeff Marshall, Christian Kugel, Chandra Panley, and other early Starcom IP leadership, the driving reason for our success was Renetta McCann.
Though I did not report to her—I ran a separate profit and loss statement, and was aligned with the cool digital future while she worked on the meat and potatoes of mainline media—Renetta moved heaven and earth for Starcom IP to succeed.
She allowed me to poach some of her best talent (after getting her okay), provided me with client leads, and supported us and our different pricing structure with them. Most important, she let me operate a variant culture where the employees at Starcom IP were given better technology and wages that benchmarked against the outside world for digital talent. She recognized that Starcom IP was not competing with Starcom but with Modem Media, Avenue A, and Digitas for talent and credibility. She also recognized that she and I were aligned on how well Starcom would thrive in the future, and in time Starcom IP could be folded back into Starcom.
Change Is Hard, People Are Soft
By saying people are “soft,” I don’t mean weak or fragile; they are vulnerable and anxious, and they can’t be treated like metallic cogs in the machine. When the organization announces that their group is being spun off and restructured, or that they’re going to be asked to move halfway across the country, or that they will need to learn how to work within a matrix rather than a pyramid, they are understandably concerned.
People won’t support and further change unless they perceive how they and their skills fit. Financial incentives aren’t sufficient to motivate people to become deeply involved in making a change happen. Instead, organizations need to mirror their organizational goals with individual ones. The growth, relevance, and transformation they seek for the company should be reflected in similar programs for individuals.
Employees need to see how the change strategy helps them grow, not just the organization.
They need to understand how their skills and knowledge will be more relevant to the company, just as the company hopes to be more relevant to its customers.
They need to recognize how they may transform themselves through learning and training, just as the company hopes to transform its practices and place in its industry.
These needs are especially compelling given that many employees experience negative financial outcomes as the company embarks on change. Many companies reduce bonuses and freeze raises (to conserve funds required for a costly change) while the workload remains the same or increases. Organizations may also ask their people to move into situations where opportunities for advancement and higher salaries are less likely in the short term.
As I noted at the start of the chapter, change sucks.
To offset this negative, organizations have to tell a better story than the one the spreadsheet dictates. They must focus on people’s concerns using the following three approaches:2
STRAIGHT TALK. Be truthful about the challenges ahead and the pain that will be faced in the short term. Truth includes admitting the pain might have been avoided if the company had acted faster or was more prescient about the changes. Truth also includes recognizing that success is not a given and enumerating the risks and pitfalls ahead. While organizations are often reluctant to be anything but hyperbolic and grandiose in their description of the change effort, most employees are savvy about the odds of succeeding. If management fails to be honest, they will respond cynically at best and with little effort or enthusiasm at worst.
ONE STANDARD. When change is being wrestled with, the entire team or organization must be treated with one standard. If there is to be a cutback of benefits, everyone must suffer the cut or, at minimum, the more senior folks should bear the brunt of it. Organizations that preach belt-tightening and increased workloads to make it through transformational times but ask the rank and file to sacrifice are asking for trouble.
GUARANTEED FUTURE BENEFITS OF SOME TYPE. People need hope and a powerful reason to navigate the change. They must envision a future benefit that they will gain regardless of the outcome of the transformation journey. I recognize that it’s difficult to make a specific financial promise—for example, you’ll make 25 percent more in five years if the change is successful. But organizations can make other promises in the following areas:
• A pioneering credential. Companies are looking for people who have gone through the leading edge of change; they want to recruit people who have been there, done that. By being part of a transformational effort, they have a marketable experience to put on their résumés.
• Growth and skills. Being part of organizational change means learning and growth—employees can’t survive without both. They will acquire new skills and learn how to adapt to a new environment, becoming more agile, innovative, and effective. All this makes them more marketable.
Obviously, companies must tailor these benefits to specific circumstances—the value can range from learning how to manipulate a new piece of software to the chance to work on cross-cultural teams or gain cross-cultural experience in India, China, or another emerging power. When people can see legitimate benefits to a change program, they believe there’s something in it for them, not just for the company or its management.3
Coaching Slow and Fast
Theoretically, coaching is all about people. But some coaches go about their business with organizational objectives spotlighted and individual requirements subordinated. They fail to recognize that there are different types of change and that they affect people differently. Instead, they focus on assessment: Can this individual contributor make the transition to a team culture? Or they coach them like propagandists, trying to convince people that a change initiative will be wonderful for everyone. Or they coach everyone the same way, failing to account for individual concerns, strengths, and goals.
It shouldn’t be surprising, therefore, to hear the conclusions of authors John L. Bennett and Mary Wayne Bush in Coaching for Change: “Research indicates that approximately 70 percent of all organizational change initiatives fail . . . including mergers and acquisitions, introductions of new technologies, and changes in business processes. This statistic emphasizes the need to leverage any and all organizational resources to make change work. . . . Change coaching is an ideal way to ensure that change is supported at the individual and group levels for the benefit of the entire organization.”4
While other types of coaching exist, transformational coaching is the most challenging since it isn’t just about getting people to do things differently but to think and be different as well. To motivate people to embrace a new way of thinking and being doesn’t happen with a cookie-cutter approach or in a single coaching session.
Complicating matters is the concept of “pace layers of change,” articulated years ago by Stewart Brand and Paul Saffo. Their thesis was that some things change at a different rate than others: fashion, commerce, and infrastructure change faster; governance, culture, and nature change slower. They suggested that each type of change has different traits, and that change works best when conversations are held about each type.5
I’m not going to cite all the various change theorists and contrast all the different approaches. Suffice it to say that change is complex, and that to make it work organizations and individuals must rewire their thinking and then twist themselves (behaviors, being) into shapes aligned with change.
To help your organization and people rewire and twist, here are three suggestions:
COMMUNICATE AND REPEAT. Why is the organization changing? Why is it critical that it change both for itself and its employees? Clarity and repetition are essential here, not because employees are dumb but because the issues can be complex and can evolve and need updating over time. The communication should be succinct, but it needs to occur regularly. Transformation is often a slow process, and people need to be reminded why change is occurring and why tweaks are being made to the original plan. Employees are all different, and while some might “get it” immediately, others need inspiration, motivation, and a variety of explanations to secure their buy-in.
REWARD BEHAVIOR, NOT JUST OUTCOMES. Remember, a key to transformation is rewiring. This means it’s not enough to achieve specific benchmarks through change—a temporary goal. Organizations can achieve outcomes via short-term moves such as cutting costs, downsizing, introducing new products, or acquiring other companies. But to change how people think and act within a long-term context, organizations must commit to rewarding behaviors that may not have a short-term impact but will dovetail with long-term transformational goals. For instance, rewarding contributions to a team rather than individual achievement. Or rewarding a willingness to take risks and fail rather than playing it safe and achieving management objectives.
DISCUSS THE COLON. Not the punctuation mark, but the body part. Given my previous metaphor (“turd on the table”), you may think I’m digestive system obsessed, but this is too good a related metaphor to pass up. The temptation is to focus on positive outcomes of transformation—the cost savings, the gain in market share, the increased speed of digital tools. In other words, the cool stuff that emerges from the change. But savvy transformers recognize that employees require a discussion of the unattractive process that eventually produces great outcomes. This discussion demonstrates that management understands and empathizes with the difficulties accompanying change. Discussing the colon means looking at the journey of transformation from start to finish, setting up signposts, and marking progress. Pardon the pun, but people are much more willing to go along with change when they’re reassured that things will work out in the end.
Don’ts: Common Spreadsheet Mistakes
When you’re operating with a spreadsheet-only mentality, you think in absolutes. Numbers are clear and unambiguous, and data is scientific. Therefore, from this perspective, it makes sense to see change as an either-or proposition. For instance, believing that there are only two ways to change an organization—either you change the people or you change the mindsets.
As a result of this perspective, some companies commit the error of believing that by downsizing 18 percent of the people who lack the right skills or attitude for the change and bringing in 18 percent new people who do, the change effort will be successful. Other companies believe that if they commit to changing mindsets—if they try to teach existing employees a new way of working—they will transform their people.
The story perspective holds that things aren’t that simple—ambiguities, uncertainties, and complexities are all part of the human experience. Change requires changing people’s mindsets in relation to many different factors—the change objective, the current skills and attitudes of employees, the obstacles to change, and so on.
Admittedly, the spreadsheet perspective is more attractive—it’s simpler and easier. That’s why companies make so many mistakes when it comes to change strategies. Here are three common ones to avoid:
Mistake 1: Giving up on existing talent and conducting massive layoffs
It’s not that everyone can or should make the transition, but that when too many people are downsized, and good talent is thrown out with the bad, organizations suffer. In fact, massive layoffs create an antichange environment.
First, it discourages risk-taking. When people see their jobs at risk—a common belief among the survivors of these layoffs—they are loath to take any chances that might cause them to be on the next layoff list.
Second, it kills resistance. You want to have a certain level of opposition to the change—not outright rebellion or sabotage, but people who engage in debate and help correct the missteps.
Third, it harms relationships that are crucial for transformation. Inevitably, people start talking about the old guard (veterans) and new guard (recent hires) in the wake of downsizing. This creates tensions between both groups—tensions that hurt the teamwork crucial to most transformations.
Mistake 2: Condoning behavior of veteran managers who undermine change
Yes, some pushback on change is good. A difference exists, though, between initial pushback and ongoing sabotage. Organizations may allow senior people to be out of alignment with the change effort. They may insist that everyone participate on teams, but then they allow a highly productive manager to avoid teams and continue as an individual contributor. They may allow one or more people to remain as command-and-control leaders, even as the company is moving toward a more participatory, flatter structure. And they may permit some people to verbally mock the change effort, giving them a pass because they possess sufficient influence to cause trouble.
These individuals usually receive a pass because they’re producers—they contribute to the numbers that look good on spreadsheets. Allowing them to undermine change, however, creates misalignment. Other employees say, “They don’t have to transform. Why do we?”
Mistake 3: Underestimating the difficulty of change
Again, this mistake is made when you have a numbers focus. Change becomes just another program to implement with budgets and timelines and measured outcomes. But it’s difficult to measure whether a change initiative has won the hearts and minds of people or whether they possess the ability or motivation to put it into practice effectively. Remember, you’re asking people to twist into a new shape. A commitment to training is necessary—training that will facilitate understanding, accepting, and adapting their work to whatever change is necessary.
Talking about Tech in Human Terms
I would be remiss if I didn’t mention something about technological change. As a digital transformer, I’m all too familiar with the problems that can occur when organizations ask people to make significant digital shifts. It doesn’t matter whether the company is introducing new software or integrating AI into a process or rolling out a disruptive technology as part of a new business strategy. It requires more than teaching people how to use the new technological tools or convincing them that it will make their jobs easier.
In a moment, I’ll suggest three ways to facilitate managers’ and employees’ transitions to new technologies. First, though, I’d like to focus on the concept of connections and how organizations should think about this concept from both spreadsheet and story perspectives.
We are living in an increasingly digitally driven, screen- (and voice- and gesture-) mediated, algorithmic, AI-driven age where we interact with each other and stimuli across the internet via screens and devices. We leave a trail of data exhaust, which is refined and fed back to us to breathe in customized, relevant, and addictive stimuli. Our reactions create another virtual cycle of signals that build and buttress our profiles and bring new stimuli. These forces are changing industries and the nature of products, services, and experiences; they are changing what it is to be alive and human, and how we connect with each other personally and in the business world.
Connections, however, are twofold. First, the new digital world is connecting us in new ways to more people and more content as well as creating identity graphs that are a spiderweb of people, interests, and behaviors that we both spin and live within. We can connect to amazing hardware and software power by plugging into cloud-based computing and storage. All this is the digital, data-driven, and silicon side of connections.
But we are more than machine-stimulated people. We do not just compute using silicon chips or connect through Application Protocol Interfaces. We also feel, given our carbon realities. We feel and we dream and we are moved and we move others through storytelling. We connect through looks, glances, gestures, and unsaid words that are profoundly communicative but too nuanced for an algorithm or spreadsheet to compute.
When organizations forget this fact—and they forget it frequently—they roll out digital change that causes people to be anxious, fearful, cynical, angry, and rebellious. To avoid or counteract this response, here are two suggestions:
Face and create a conversation about the reality of the future.
Tomorrow is inevitable and cannot be stopped. We will live the rest of our lives there. We have entered what Klaus Schwab of the World Economic Forum calls the Fourth Industrial Revolution. At the Davos conference in 2016, he described it this way: “We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before.”6
This means that leaders can’t be in denial about AI, social media, and the like. It also means that employees can’t give lip service to the new digital protocols and assume that “this too shall pass,” resisting the changes openly or subtly.
We need honest, varied, and ongoing conversations about the reality of the future. This means companies have to do more than announce the changes. Leaders need to attend seminars and talk to industry consultants to understand the nuances of these changes and how to best implement them. Employees must talk to their managers and have access to online forums and other sources that explain the implications.
Ongoing dialogue will help leaders remove their heads from the sand; it will demonstrate that machine learning or blockchains aren’t going to go away and that their realities must be faced and embraced. This dialogue will help employees grasp that this isn’t like past change programs where management introduced something and then walked it back when it proved unsustainable. Once all the pros and cons of a given digital change are on the table, it’s much easier for everyone to talk about them and, eventually, accept them.
Go slowly and deal with the complexities.
When you create digital change, it rarely happens quickly or without glitches. This is true whether you’re installing a new software accounting system or if you’re automating a plant. Recognize that this is not merely a cosmetic realignment but a twist of body, mind, and heart into a new shape. This is tricky stuff, so don’t try to make it happen overnight or without dealing with all its permutations—from a lack of comprehension of how to use a new system to identifying and rectifying flaws in the tech design.
Taking Transformation Personally
Since the ’80s, I’ve witnessed the effect that transformation has on organizations—not just as a consultant to clients but as an employee. This inside perspective is useful, in that the human dimension of change becomes much more visible when you’re experiencing it directly as opposed to leading it or providing client advice.
In the mid ’80s I was a young Leo Burnett employee working on a now-defunct toothpaste called Gleem for our Procter & Gamble client. It had once been America’s biggest toothpaste brand, with nearly a quarter of the market, but had been reduced to a miniscule share by a new toothpaste called Crest launched by its parent company. The magic of Crest was one chemical and a badge. The chemical was sodium fluoride and the badge was from the American Dental Association, verifying that Crest was successful in preventing cavities. That chemical and that badge grew Crest to over a 40 percent share of all toothpaste.7
While our team worked to salvage Gleem’s share by repositioning it as a cosmetic brand due to superior teeth-whitening properties, I spent the majority of my time helping prepare to launch what was expected to be another major new toothpaste with the therapeutic benefit of helping prevent tartar buildup. It was going to be called Professional Care Pace.
During this time, a soap-dispensing company from Minnesota called Minnetonka Inc.—the company that had given the world the pump-dispensed Softsoap—decided to launch a pump-dispensed toothpaste called Check Up.8 We sneered as we worked on a real breakthrough versus some packaging trick. Check Up, though, was about convenience—even though it cost 20 percent more—and quickly made it to almost double digits in market share, much of it from Crest, which stood to lose its number one position.
At that time Procter & Gamble made a couple of bold decisions. First, they doubled down on the therapeutic positioning of Crest rather than packaging and second, they buttressed the brand by scuttling the launch of Pace and instead introducing the new antitartar breakthrough as an enhancement to Crest.
This was big business news, and Crest’s decision helped return it to a strong leadership position, but I was looking at all these changes from a ground-level perspective. I was not a happy camper. The responsibility of launching the brand was taken away from our agency and given to another one—all my work on the account was shipped to them. I had hoped that my participation in the successful launch would result in my promotion to an account executive, and that hope was dashed with the change of agencies.
I learned three lessons about change that have held true, and the last one is particularly relevant from a story-and-spreadsheet vantage point:
1. Technology can upend everything. Sodium fluoride made Crest and took a category that was built on the cosmetic benefit of fresh breath and white teeth into one about therapeutic benefits—all within a thousand days.
2. Change and competition often surprise by coming from outside the usual competitive set. Check Up came not from Colgate but from a soap company, and instead of cosmetic or therapeutic benefits they promised convenience.
3. Transformation has to be bold and is often painful. Procter & Gamble made the hard call to cancel the launch of a new brand in which they had invested millions and instead buttress their flagship. The agency and I ended up on the short side, losing out despite doing everything right and following the rules. Anger and cynicism were reflexive reactions to the situation, and to continue to be productive and work effectively with our client, we needed to get past those negative feelings and recognize why their decisions would benefit their company and, ultimately, their advertising agency.
When the Publicis Groupe acquired Leo Burnett in 2002, I again felt the effects of transformation firsthand. While this transformative move was very positive—we became part of a major global, publicly traded company with the breadth and depth to compete with other global competitors in a time of change—two negative effects on the employees accompanied the change.
First, we had bosses in Paris and did not control our own destiny as we had before; we needed to adjust, and adjustment was challenging. Second, we had become part of a public company, subject to very different financial rules than we had followed as a private organization.
Many of the people at the Leo Burnett advertising agency never adjusted to the new reality. Some wondered why we had not been the buyer versus the seller. Others wanted to have their cake (the financial benefits that came with the acquisition) and eat it too (restoration of the status quo). I remember telling them that we were no longer the bosses and to stop pining for the past and adjust to the new reality. Even better, why not leverage the capabilities and opportunities of our new owner and combine them with our knowledge and expertise to better serve our clients and grow business? In time this attitude would have us influencing our new bosses and maybe even joining them in the boardroom.
Because of my other experiences—from Gleem to launching Burnett’s first online marketing group to launching Starcom IP to helping clients with digital transformation—I was well aware that change has a diverse and multidimensional impact. Major alterations to workplaces can create self-doubt in some employees, set up a dysfunctional dynamic (new employees versus veterans or the employees of an acquiring company versus the acquired), and require climbing a steep learning curve and increasing workloads. As important as it is to address spreadsheet items—to make sure synergies exist between merging companies or a reorganization produces percentage gains in productivity—the people going through these changes all have their own stories.
We seem to forget that while computers are silicon-based, digital computing things, humans are carbon-based, analog feeling things. To change effectively, people need not only facts but also meaning, emotions, dialogues, and inspiration. True change leadership incorporates, understands, and leverages the human reality.
Change can be implemented artificially, or it can be nurtured organically. The latter doesn’t mean redecorating the office or having touchy-feely bonding sessions or listening to the CEO give an inspirational speech about how change will be good for everyone. Instead, if you want to do one thing that will make change organic rather than artificial, I would prescribe incentives.
Incentives can address both the story and the spreadsheet. For spreadsheets, it helps measure what will be gained from the change. A range of incentives, for instance, can help people determine how much money they will make if they embrace the new systems. It can help organizations calculate the specific carrots they need to dangle to achieve goals (e.g., 95 percent adoption of a new work protocol).
From the story side, these incentives can have a huge, positive behavioral impact. A key learning from Steven Levitt’s Freakonomics was that the best way to predict behavior was to understand incentives.9 People will do what they are rewarded for, and if you want tomorrow but incentivize or measure yesterday, you’ll create cognitive dissonance. Far better to align incentives with your change goals. This is a natural, caring way to get people to adjust their work behaviors. If you want to change the culture from one of individual contributors to teams, provide powerful motivation for this type of change. This involves not just financial incentives but communication on how a team structure will provide greater receptivity to big ideas and increase the odds of greater growth, innovation, and profit—meaning bigger bonuses, salary increases, etc.
Don’t change your organization the heartless way—by getting rid of all the old employees who don’t fit and bringing in a slew of new ones. I’m not saying don’t bring in fresh talent. I am saying that you should heed this truth: the only way a company changes is by changing people’s mindsets or changing the people, and companies find it is easier to change the people. Yes, it’s easier, but it’s ultimately self-destructive. You’re bringing in the equivalent of mercenaries, and while they may be more in line with the change you’re shooting for, many of them will have little loyalty toward the company.
Organizations should give veterans—especially individuals who have been loyal to the company and performed well—the chance to transition. With the right incentives, most will make the transition with flying colors and be grateful for the opportunity, motivated to perform well, and likely to remain productive for the long term.
KEY TAKEAWAYS
• Change is very difficult for most people, and companies must acknowledge this and realize that unless they make a savvy, strategic effort to bring their people along, it will be almost impossible to enact change.
• Successful companies ensure they communicate why the change is necessary and is good for employees, and how they will find a place for themselves in the company’s future.
• Three tactics operationalize change: incentivizing the new behaviors; exiting people, regardless of level, who refuse to align and thus sabotage change; and staying the course with investment, despite the expected financial bumps in the road to change.