16
The Human Element
Getting People Ready, Willing, and Able to Change
A Fit for Growth transformation asks a lot from all the employees in the company—from the CEO down to the most junior front-line employee. Once it's all said and done, many employees will have learned new processes and IT systems, and will be working with a new set of colleagues. Some will have stepped into altogether new roles, while others may have relocated to new offices. For almost all, there will be new expectations for performance, new measures, and new ways of working in a more cost-conscious organization.
But all the elegant plans to transform the organization will come to naught if the employees do not get on board with the transformation. Its ultimate success will hinge on how successfully employees adapt new ways of working. For that to happen, employees need to understand why such a big change is necessary in the first place, agree that this change is best for the company and for them personally, and be inspired by what the future promises.
“Change management” is an all too familiar concept for executives and managers. Indeed, large-scale initiatives such as Fit for Growth transformations do require thoughtful change management to help bring the employees along the transformation journey—to educate them on the what and the why of the change, train them on new processes and systems, and motivate them to sign up for the future. The basic change-management building blocks include leadership alignment, change impact assessment, stakeholder engagement, employee communications, training, and measurement and tracking.
These basic building blocks of change management are absolutely necessary during a Fit for Growth transformation, but they are not sufficient to ensure that change is adopted. For large-scale change to succeed, the leadership team needs to work with and within their company's culture to motivate and mobilize the employees. Yet some executives assume that a rational explanation of the need for change, backed up by facts, catchy slogans, and well-crafted memos will be enough to convince employees—that if leaders simply make the case clearly and strongly enough, people will be motivated to act in the organization's best interest. These same leaders also tend to focus only on the rational and formal aspects of the organization—like governance, process, and structure—that are familiar and easy to see. But they forget about the emotional and informal aspects of the organization, which play an essential role in how people behave. These emotional and informal aspects are embedded in the company's culture—the self-sustaining patterns of behaviors, thoughts, feelings, and beliefs that determine “how we do things around here.”
Those on the front lines have to embrace the change, and to get them on board and keep them on board, you have to enlist your organization's culture and leverage what works within your culture. The Fit for Growth journey will require employees to change not only what they do but how they behave on a day-to-day basis. That is a considerable ask, and it will go unanswered unless you are able to put your culture to work.
Leveraging the culture throughout the transformation—in making the case for change, building alignment among leaders, communicating the plan to the broader organization, and driving acceptance and enthusiasm—can accelerate the transformation, deepen its impact, and increase the likelihood that the changes will succeed and be sustained. A recent PwC Strategy& survey of more than 2,200 executives and managers about change management programs 1 showed that the number of informal elements brought to bear throughout the transformation significantly increases the transformation's success and sustainability. Respondents who leveraged the existing culture throughout the transformation were more than twice as likely to deliver sustainable change as those who didn't.
Thus, the Fit for Growth transformation approach emphasizes culture-led and behavior-based change. A company's culture holds within it a tremendous source of emotional energy, which can either hinder or catalyze large-scale change. The transformation needs to build on the company's existing organizational and cultural strengths. Mind you, it's not about changing the culture—a company's culture is its basic personality, and changing it takes several years, even decades, far beyond the time horizon of the transformation. Instead, it's about harnessing the positive aspects (which every culture does have) and emotional forces in the existing culture to motivate and mobilize people around the task at hand—the business of transforming the company for the good of all.
Elements of a Culture-Led Change Management Program
The work of change management is ultimately about helping employees adapt to new ways of working. Employees make the transition from the current state to the future state in four stages, in which they move from becoming ready for change to becoming willing , able , and committed to the transformation. In the first stage, to become ready, employees first need to be aware of the change coming their way and understand it. In the second phase, to become willing to change, they need to be motivated. The case for change and the future state of the company must be broadly compelling to them, and individual employees must be inspired by the future-state vision and be able to see themselves as part of it. While sticks—like threats of job loss or career derailment—can “motivate” people, carrots—the promise of a better future for themselves, their colleagues, the company, and their communities—are more likely to truly energize them to adapt the change.
In the third stage, to adapt to the change, employees need the requisite knowledge, skills, and competencies. They will need to be educated on the new processes and IT systems, and be equipped to demonstrate the new expected behaviors. In the fourth and final stage, to become committed to the transformation, employees must fully embrace the change and demonstrate the new ways of working. They are incentivized and recognized for demonstrating the new behaviors.
To help employees traverse the path of becoming ready, willing, able, and—ultimately—committed to change, the transformation team must employ the following change management elements.
Align Leaders
Leaders must own the transformation and thoughtfully steer the organization through it, providing the right levels of inspiration, action, and pacing. Change will be very difficult if people in formal positions of power talk or act in ways that do not visibly and actively support the transformation; being neutral won't cut it. In times of change, employees naturally look to their mentors and direct supervisors for honest information about “what this means” to the team and to them personally—as well as for motivation to “get on board.” So an effective transformation effort will anticipate this need and prepare leaders at all levels to manage through their own personal change journey so they can authentically demonstrate their commitment and “walk the talk” as the transformation plan is developed and executed.
Communicate Changes
Change communications are typically aimed at creating awareness and understanding through a wide variety of methods, such as formal executive communications (memos, e-mails, and videos), conference calls, town-hall presentations, staff meeting discussions, one-on-one meetings, employee newsletters, FAQs, conference calls, and many others. During a major transformation, however, the changes are so sweeping, and such large shifts in behavior are required, that communications need to drive acceptance and adoption as well. Leaders can make communications more effective by leveraging the culture. Transformation leaders should therefore plan from the start to make communication programs people focused and encourage participation and a two-way dialogue. They should use formal methods such as official memos from the CEO, a transformation intranet site, or town halls with open question and answer sessions, and informal methods such as informal conversations with mentors and peer coaching. Last, it is important to measure on an ongoing basis how well the messages being communicated are actually being interpreted, and, if necessary, to clarify and adjust the messages to make them more relatable to the organization.
Engage Stakeholders
There is no silver bullet for getting all your employees thinking and feeling the “right” way. Because the employee population is not uniform, each person will interpret and react to what is happening differently, depending on their role, function, location, age, previous experience, and myriad other factors. Change affects each employee segment differently, so a stakeholder engagement plan is needed to educate and motivate each employee segment. In addition, personalized impact assessments and engagement plans need to be developed for executives, so their issues are addressed directly, they can be true champions of the transformation, and they can bring along employees who look up to them.
Train Employees
Getting your employees to believe in the objective of the change is only part of the journey. Helping them learn how to change, what to do, and not be paralyzed by uncertainty requires targeted training and patience. In order to change, employees will need extensive training in new skills and capabilities, processes, and systems. Such extensive training often requires not a one-time day-long session, but rather a hands-on immersion experience in which managers lead by example on the job. A skillful combination of the training delivered in formal sessions, combined with informal peer guidance and direct manager coaching, is invaluable for helping employees learn from mentors and peers.
Drive New Behaviors
Change becomes sustainable when culture enables the transformation, rather than hindering it. As discussed, however, culture cannot change swiftly and on demand to perfectly align with the aims of your transformation program. The key is to focus instead on a critical few behaviors—behaviors that some people demonstrate regularly now; that would make the transformation smoother, speedier, and more successful; and that would lead to tangible business results if everyone adopted them. The focus is on behaviors because the culture—what people feel, think, and believe—is reflected in and shaped by daily behaviors. The focus is on a few critical behaviors because changing behaviors is difficult, and trying to change more than a handful at the same time is an impossible task. When everyone in the organization focuses on these critical few behaviors, they are able to act their way into a new way of thinking, while seeing rapid, tangible results.
As we have discussed in earlier chapters, Fit for Growth transformations unfold over three phases, each with its own purpose and focus. In each phase there are distinct change management activities to plan and execute, from developing the case for change, understanding its impact on employees, crafting detailed engagement plans, to execution and making the change the new normal (see Figure 16.1 ). We will discuss the change management work during each phase in turn.
Phase 1: Diagnostic and Case for Change
To recap, Phase 1 of the transformation focuses on identifying the opportunity and defining the direction and focus areas for the Fit for Growth transformation. This is a time when a small, focused team is working closely with executive leaders to assess the organization and cost structure, set a target for the overall transformation, identify opportunities and quick wins, and develop the road map to achieve the goal. In parallel, the team lays the foundation for the culture-led change management effort by developing a case for change that the management team will stand behind and that will resonate with the average employee. The team also needs to assess the company culture in order to understand which aspects are strengths to be leveraged, and which are obstacles that could derail the transformation.
Develop the Case for Change
To capture the hearts and minds of your employees, you need to build a case for change that is both rationally and emotionally compelling. A good case for change outlines the rational explanation for the transformation, explaining the driver for the change (why are we doing this?) and its purpose (what are our goals?). It also sketches a picture of the future state (what will change and what will not change?), and makes the benefits tangible (what will this mean for employees, customers, and the company as a whole?). A better case for change, however, goes beyond the rational explanation to encompass emotional factors—it is aspirational and motivating as well as logical. In addition to discussing financial objectives (such as revenue growth and margin improvement), it appeals to shared sources of pride (such as service to customers, industry leadership, and company mission, values, or history), recognizes the company's strengths and accomplishments, and paints a vivid picture of a future that people want to be a part of.
At one U.S. health system, for example, profits were falling as new competitors entered its markets, and margins were pressured following the enactment of federal healthcare reform. To shore up the bottom line, the CEO initially cut costs across the board. This stemmed the profit declines to some extent, but also negatively affected investments in patient experience—which in turn caused an uproar within the organization. Recognizing that systemwide cost cutting was not a sustainable long-term solution, the CEO launched a Fit for Growth transformation. He defined the case for change around the two primary sources of employee pride: helping patients live better lives, and being an industry leader. He made the case for putting the health system on a solid footing, which would enable the system to continue serving its communities, reinvesting into the patient experience, and reclaiming its historical leadership position. These aspirations all connected emotionally with the employees, who were vested in the well-being of their patients and proud to be part of “the best health system” in their region.
Assess the Culture
In Phase 1, you baseline and diagnose the key qualities of the existing culture using a combination of interviews, focus groups, and surveys to identify the cultural traits that make the company tick. Understanding the emotional forces that drive the company will be helpful in evaluating the potential difficulty of realizing specific transformation opportunities. A company typically has four to six dominant cultural traits. These traits have both positive and negative implications. For example, a company with a strong entrepreneurial trait may be great at identifying and capturing market opportunities but may be challenged when driving cross-organizational enterprise initiatives from the top down, as entrepreneurial managers may bristle at their “freedom” being taken away. The team can develop aspirational cultural traits based on the current cultural traits, emphasizing strengths while mitigating challenges. For example, a company that is very purpose focused could tap into employees' emotional commitment to the mission (e.g., saving patients' lives for a health system) to connect the transformation goals to that overarching organizational purpose.
One multinational energy infrastructure company included a full-on cultural diagnostic for its transformation program during Phase 1. Leadership knew that marketplace dynamics meant the transformation would need to accomplish radical changes, but they also knew that the company had changed very little over its history, and worried employees would resist. One “aha!” moment came when the analysis revealed executives knew only half the picture about the company's culture. For example, before the diagnostic, leaders felt “we don't have a culture”—or that it was very fragmented and distinct across divisions, with no unifying traits or commonalities across. To the contrary, the diagnostic revealed that there were some common threads, sources of pride and root causes of the operating model dysfunction. The intensity or expression varied from group to group but the essence of culture traits were strongly similar, with useful insights on what people were proud of that could be leveraged to drive change.
In addition, the diagnostic revealed attitudes toward particular cultural themes by level. There was a big difference between leaders and front-line employees. Some things that leaders were proud of were seen as problems by the front line. Senior managers, for example, were proud of being entrepreneurial and willing to do “whatever it takes, at any cost” to meet their objective. But the front line viewed this kind of behavior as perpetuating silos and discouraging collaboration. This provided useful guidance on ways leaders would need to role model new behaviors.
Align Leadership
The transformation team and company leadership need to align on the transformation vision, objectives, and opportunities early in the process, so that they will be ready to drive the transformation throughout its duration, and will be motivating spokespersons and sponsors who will bring the broader organization with them. They must be unified, aligned, and committed to transforming the company. But that's rarely, if ever, easy. Some well-intentioned executives will find the change unnatural, no matter how hard they try. Some others will lack the capabilities, mindset, and willpower to execute the program. A few will resist if the change challenges their power and status.
Aligning the leadership will likely take the duration of the entire Phase 1, and then some. The CEO and the few other early zealots will have to bring along the rest of the executive team, while recognizing some may never make it through and need to part ways. Alignment is never achieved in one meeting or conversation; it needs to be built over time. The three of four formal steering committee meetings during Phase 1 are the first vehicle to establish alignment; reviewing the facts and debating options with peers will convince some of the executives. Yet those three or four meetings will not be sufficient for all; some others will need one-on-one, candid conversations with their trusted peers and the CEO. They need to air their concerns and be heard: “Will we break the company? Will this really be good for the employees? Do we really have the stomach to pull this off?” While the facts may be clear, these leaders need to come to terms with the implications on their own terms. This is where the CEO and the executive sponsors make a difference: understanding where each executive stands rationally and emotionally on the transformation, and “lobbying” them to convert them to zealots.
By the end of Phase 1, there is usually a public commitment to the change. For example, one CEO asked each of her reports directly in the final Phase 1 steering committee meeting two simple questions: “Do you believe in this change and will you move forward with me?” All but one said yes; the one outlier declared he did not agree with the direction and he could not do it. Shortly after the meeting, he voluntarily resigned and cleared the way for the change.
Phase 2: Detailed Design
The change management focus in Phase 2 turns to supporting the transformation's design teams as they design sustainable solutions and develop an integrated transformation plan. The change work in Phase 2 goes through a natural shift. Early on there is little information, so it's much more about continuing executive stakeholder engagement and leadership alignment, and guiding the design teams to consider and capture change implications. About halfway through, as the future state emerges and the changes are more defined, the focus shifts to understanding employee impact and developing the change plans: stakeholder engagement plan, communications strategy and plan, training plan, identification of critical few behaviors, and approach to measuring and tracking change adoption.
Prepare for the Change
The hard work of leadership alignment that began in Phase 1 continues into Phase 2. At this stage, the leadership should be largely aligned on the transformation themes. The focus at this point turns to bringing on any stragglers, and aligning on and testing the signaling behaviors the leaders are adopting to demonstrate their commitment to the transformation goals. The number of individuals involved with the transformation is still a small percentage of the workforce at this stage, but they are often the very people who are respected and can informally influence their peers as they demonstrate the critical few behaviors in their day-to-day work on the transformation team.
In addition to the executive leaders with formal authority, this is when authentic informal leaders (AILs) should be identified and brought into the transformation. These are people who may be at lower levels in the organization, possibly without formal management roles or authority, but are looked upon as role models and trusted sources by others. They already demonstrate the future state's cultural traits and critical few behaviors—they personify the positive elements of the company's culture. Since they are visible to others, they can play a quite powerful role in motivating those around them to understand and accept change and adopt new behaviors.
Stakeholder Engagement
Early in Phase 2, you need to understand the key stakeholders and how they view the upcoming transformation. Many of these stakeholders will either directly execute the planned changes or be influential in how they are accepted broadly in the organization. Hence you need to understand who is affected and how, and determine what you need to do with them: who are the zealots, and who can be your allies? How can you get them to be ambassadors for change? On the other hand, who are the opposition leaders? What do they oppose and why? And how can their opposition be overcome?
Stakeholders are segmented by degree of influence (in the outcome) and level of change required (by the change program). The segmentation helps prioritize stakeholders to address the concerns of critical stakeholders first while highlighting allies to enlist in spreading the change (see Figure 16.2 ).
Once the initial segmentation is done, the team needs to develop a stakeholder engagement plan, in particular for those who face significant change but are not yet supportive. The plan typically documents the concerns of the stakeholder, how to address those concerns, and who should engage the stakeholder and how. Each engagement is documented with clear next steps until the stakeholder moves to the “supportive” category.
Employee Impact Assessment
As Phase 2 moves further along and the future state begins to solidify, how employees will be affected also emerges. You need to identify how various employee segments will be affected by the change, so they can tailor engagement, communications, training, and behavior change plans to help employees transition to the future state.
The impact assessment begins by segmenting employees into natural categories. Segmentation should be informed by the transformation changes, and is typically driven by roles, functions, business lines, and geographies—call center agents in U.S. offices, for example, or field sales reps, or finance managers and analysts focused on planning and analysis. Impact is defined as changes to roles and responsibilities, locations, processes, tools, skills and knowledge, behaviors, and performance. The impact assessment should be conducted by the transformation workstream teams that are designing the future state organization and processes, as they will be in the best position to articulate the impact (see Figure 16.3 ).
Once the nature and magnitude of the impact by employee segment is understood, the transformation team can move to develop targeted plans.
Communications and Engagement Plan
You develop the communications and engagement plan during Phase 2. The work initially focuses on developing a “core message platform,” which builds general awareness of the program, introduces the key concepts and reinforces key messages, articulates why change is needed, and instills a sense of urgency. It also includes external messaging to prepare responses for media inquiries and to communicate the cost savings targets to investor and internal communities. The message platform forms the single source from which the many more detailed communications that follow will be developed.
As Phase 2 progresses and employee impact is understood, detailed communications and employee engagement plans are developed. The engagement plan defines the actions and messages that will engage and mobilize each employee segment through the execution. It is informed by the employee impact analysis, and must be tailored to each employee segment, working with and leveraging the company's culture for maximum effect. It defines in detail the first few engagements with an employee segment: who engages, what are the key messages, what is communicated, what are the follow-ups.
There is a critical set of engagements during Phase 2 with the middle-management population. Middle managers are often the management team tasked with driving changes in the execution phase, and the quality of their leadership and their adoption of the change can make or break the transformation. This is a segment, however, that can be quite resistant to change: some of our clients refer to middle managers as the “calcified middle”—highlighting how stuck in their ways many of them can be. They are used to running their organizations and processes a certain way; they were promoted to their roles because they demonstrated the behaviors relevant in the current organization, and they expected that continuing to do what they have done would advance their careers in the future. Then along comes a change initiative, and they are told to forget much of what got them where they are, and instead to learn new ways of working.
In our experience, successful initiatives engage these middle managers during Phase 2—not after the fact. Early in the phase, detailed design workstreams engage these middle managers to understand how things work today and where the issues are, through one-on-one interviews or focus groups. As the work advances, the workstream leads engage the middle managers on jointly developing solutions or refining the workstream team's proposals. In this way, potential issues are addressed up front to ensure the design is robust. In addition, the middle managers see that their voices are being heard and that their contributions are valued.
Another aspect of engagement is selecting the transformation team, which becomes very important to the success of the program in Phase 2. Ideally, the workstream leaders are chosen because of their credibility in the organization, content expertise, and interpersonal skills. At this point, they leverage their credibility, knowledge, and skills to effectively engage the middle managers.
The communications plan is a subset of the overall employee engagement plan. It includes a granular list of communications to be delivered throughout the transformation. The plan should include, by employee segment: communication objectives, employee segment concerns, core messages, communication methods, and timing (see Figure 16.4 ).
For example, a retailer built a comprehensive engagement and communications plan to help employees transition to deliver a stronger customer experience. The retailer developed tailored plans for major employee segments in the stores: managers, assistant managers, and hourly employees. The engagement began with cascading conference calls with the leadership: from divisional presidents to regional VPs to district managers to store managers. First, the store managers verbally informed their employees of the high-level changes. Then, within several days, district managers delivered detailed communications to groups of store managers in “awareness presentations.” After the presentations, the district managers had one-on-one meetings with their store managers to discuss how the performance expectations and bonus plans would change to reinforce the desired customer experience. The store managers then disseminated the information to their employees in store meetings, leveraging talking points, hand-outs, and job aids. Several weeks later, store managers received more targeted communications and training on the changes to specific processes.
This plan was informed by—and leveraged—the retailer's culture. The overall messaging explained why the change was necessary to improve the customer experience—something many of the store employees felt strongly about. The cascading messaging respected the hierarchical nature of the company and allowed managers to connect with their direct reports in more informal settings. The more challenging conversations were handled one on one between a manager and the employee, again in complete alignment with the company's culture.
Training Plan
An important part of Phase 2 is to identify future training needs and develop the road map for an integrated training plan to support the new workforce skills, behaviors, and performance the transformation will require. Training will be needed to provide the employees with the knowledge and skills they need to perform their new jobs (e.g., around the new processes or how to use new systems), improve leadership or interpersonal skills, and adapt new behaviors.
The training plan should be developed top-down, reflecting the overall program needs, and bottom-up, reflecting the individual workstream needs. The top-down training needs are identified by the PMO and the change management team, and cover training that enables the overall program, such as critical behavior changes. The bottom-up training needs are identified by individual workstreams, as part of the stakeholder impact assessment. These needs tend to be more granular, both in the specific training need as well at the audience affected, such as training retail bank-branch associates to use a new customer relationship management application.
The learning and development organization should gather all these requests and develop a comprehensive training road map at the end of Phase 2 and early in Phase 3. The training plan needs to be coordinated with the overall execution road map and communications and employee engagement plan.
The retailer we mentioned earlier developed and executed a three-year learning and development agenda to enable store employees to deliver a better customer experience. In the first year, the training agenda was designed to educate employees on a core set of customer experience behaviors and process changes in the stores, such as how to help a customer who seems to be searching for a product. In addition, the managers received leadership and performance management training so they were better equipped to coach and guide their employees. In the second year, the training targeted store managers and focused on sustainability of the transformation. The managers enhanced their skills in developing their teams and learned about driving customer behaviors. The third and final year delivered additional training on customer experience behaviors that were not being adapted in the stores and needed reinforcement.
Culture Impacts and Critical Behaviors
During Phase 2, the transformation goals developed in Phase 1 need to be filtered against the insights gained from the cultural assessment. Transformation opportunities that sound great on paper, for example, may be tremendously difficult to implement due to emotional sources of resistance—they may be viewed as counter to the culture and values of the people in the organization. While this does not mean that an opportunity should not be pursued, you should use culture as a lens through which to evaluate opportunities. For example, in an entrepreneurial company where individual managers have significant power, creating shared services and consolidating resources away from local managers will likely run counter to the culture and will be an uphill battle. If the improvement opportunity is significant enough, the executive team can still choose to pursue it, but with eyes wide open for the potential cultural challenges to be addressed. Understanding the culture allows smart decision making in the near term and can avoid setbacks as the transformation moves into the implementation phase.
Phase 2 is also when the transformation team identifies the critical few behaviors that will have the most impact on the change effort, by drawing from the aspirational cultural traits developed during Phase 1. For example, if the transformation requires the company to focus more on execution speed than getting to a “perfect” solution each time, critical behaviors should focus on making the right trade-offs between perfection and speed. How many critical behaviors should a company aim to adopt? Usually three is a good number; focusing on a few allows energy to be spent where it matters most.
These high-level behavioral themes, however, must be translated for specific functions or teams within the company, and by role and level. Critical behaviors can manifest in simple ways, such as requiring that memos be kept to one page or less, or stipulating that leaders from two separate functions be present whenever a key decision is made.
For example, at a consumer packaged goods company focused on better managing trade spending, the transformation team identified a critical behavior to be “collaborating to work through unfamiliar situations and iterate on solutions.” This was important for the company because the current practices of continually rehashing and escalating reasons for why an idea or approach would not work were resulting in significant rework time for whole teams. Eliminating this wasted time was a critical enabler to the success of the transformation. Leaders chose to signal this in two ways: first, by explicitly using part of every team meeting to collaborate on solutions to new trade-spending problems, and second, by actively and publicly making key decisions on those solutions within two weeks (rather than months) .
Phase 3: Execution
In Phase 3, as the execution gets underway, plans developed meticulously in Phase 2 are rolled out to the broader organization and put into action. This is where change management gets into high gear: communicating detailed changes to the organization at large, delivering training, driving behavior changes, tracking change adoption, and intervening where needed.
Leadership Engagement
Senior leaders need to be engaged and visible throughout the execution. But in many transformations, once the design is finished and the direction set, leaders re-focus on other priorities, making them invisible or absent to the average employee. Instead, their roles should expand to include responsibilities for communications, engagement, and role-modeling the critical few behaviors. Senior leaders should use the core messaging to deliver consistent messages in their own voice—to “talk the talk”—and make sure their next-level leaders can do the same at the appropriate time to engage the broader organization. Leaders should connect on a regular basis, at least monthly, to discuss employee feedback and the challenges they are facing.
Even more important than talking the talk is walking the talk by using role modeling. As part of the process of getting to acceptance and adoption, people usually look beyond the words they're hearing to the actions they're seeing from their leaders. This makes it critical that leaders at all levels behave consistently with the transformation goals and messaging.
Critical Few Behaviors
In Phase 3, the critical few behaviors identified in the earlier phases are translated into specific actions at different levels of the organization and for key groups of employees. Leadership demonstrates signaling behaviors that show commitment to the goals. Middle managers role-model the critical few behaviors that in turn encourage the front line to adopt them. For example, a critical behavior may involve having explicit conversations about trade-offs among quality, speed, and budget. Leadership can signal this behavior by defining principles behind acceptable trade-offs and emphasizing when to prioritize each consideration. Managers can role-model the behavior by sharing stories during team meetings of appropriate trade-offs and impact on results. The job of front-line managers and employees then is to proactively identify trade-offs and risks and initiate discussions around them.
You can facilitate the adoption of critical behaviors by incorporating the culture insights distilled in Phases 1 and 2 and using a combination of formal and informal communications to instill the new behaviors throughout the organization. For example, a North American energy company launched a transformation that defined a new way of doing business. Underlying these changes was an important culture shift: to push for a performance culture in which employees would hold one another accountable for performance. Leaders prioritized four enterprise-wide performance behaviors: to apply a “can-do” mindset to execution, to take an enterprise-wide perspective, to demonstrate active accountability, and to develop the company's people. Within each business unit, top leaders and small groups of authentic informal leaders came together to translate these four behaviors into local behaviors—for example, translating what “active accountability” would look like in the company's utilities business versus its generation business, or at different levels. The CEO introduced the behaviors in a firm-wide webcast, and each business-unit leader followed up with their teams, including a series of “critical conversations” with their direct reports. These behaviors were later embedded into the performance review system company-wide.
Informal Leaders
Your network of AILs is expanded and rolled out in Phase 3, to spread the critical few behaviors and catalyze a viral movement to accelerate adoption and acceptance. The transformation team members themselves are the quintessential “early adopter” type of AIL. They usually go through their own journey from basic awareness to commitment to the transformation effort, and along the way become enthusiastic supporters and adopters of the transformation principles and behaviors. When the execution phase begins, their personal journeys can be compelling stories and points of influence for their peers as the wider network of AILs throughout the firm are engaged. You can use many methods to identify AILs, including scouting potential candidates via regular project interactions and forums, crowdsourcing nominations (and then conducting interviews to validate), or leveraging organizational network-analysis data.
We have worked with AILs in a variety of ways: to provide insight about the culture and what behaviors are likely to lead to success, to spread messages virally, to help overcome cynicism about the change, and to enlist others to join the movement. They can serve as role models at all levels of the company, and the fact that they already display the desired behaviors serves to reduce resistance around change.
Delivering Communications
As execution begins, communications focus on helping people adopt new behaviors, showcasing wins and exemplars, creating a storyline that articulates and reinforces the key topics and messages, making strategic linkages to tangible transformation activities, and reinforcing the critical few behaviors. The dedicated engagement and communications mechanisms developed in Phase 2 are rolled out, and communications required by program workstreams are added to inform employees of specific changes and impacts. New mechanisms such as advisory councils—made up of people who represent stakeholders who are not part of the transformation team—can provide feedback on what people want to know and what they're are worried about, and how the messaging will be received. It is important to ensure that the communication is not a one-way lecture, but a two-way dialogue with both sides listening and asking questions.
Delivering Training
Communications are a great tool to educate people on what is happening, what is expected of them, and when it will happen. However, communications alone do not arm an employee with the skills they need to be successful in a new model. Training must be delivered in a timely manner as the organization, processes, and systems change to ensure a smooth transition to new ways of working. At this point, diligent impact assessment, engagement and planning, and training-plan development combine to pay dividends by addressing the most critical new skill needs that arise out of the transformation. The timing of training should be aligned with the timing of the changes themselves, often preceding the change. For example, employees need training to be able to transition to a new process with new workflows, or to new IT systems.
Many organizations have operations training and HR learning and development departments, which are leveraged in transformations to develop and deliver the training needed. Depending on the nature and magnitude of training, these departments may need to be supplemented by short-term external training services. Often, a “train the trainer” approach is followed, where the central training team trains the managers of departments, who then train their employees in a cascading approach. Beyond helping with scalability, this approach also reinforces the overall change message, by having managers own the change and lead their teams.
Measuring Change Adoption
You need to monitor behavior adoption and gauge the impact of behaviors and culture evolution so that the transformation team can assess and adapt—to find out what's working or not, adjust next steps to ensure the change sticks, and continue to lead the change until new behaviors are embedded. When organizations think about assessing traditional change management efforts, they often don't progress much beyond assessing awareness and understanding. Because transformations require fundamental shifts in behaviors—and therefore more emphasis on acceptance, adoption, and commitment—the approach to measurement needs to shift as well to include a broader suite of monitoring and tracking activities and tools, including monitoring and measurement of leadership activities, communications and engagement plans, effectiveness, and the overall success of the transformation. Thoughtful measurement of adoption will help the organization identify when certain communications need to be reinforced, when a critical assumption did not pan out as expected, or when additional training may be required.
Success of a Fit for Growth transformation hinges on how well employees adapt to new ways of working and change their behaviors. The changes called for are almost always large and will not be accepted by employees naturally; they will need a proactive, well-planned, and coherent change management approach to help them transition from the old to the new. Beyond simple communications and training, the change effort needs to embrace the organization's culture to be as effective as possible.
Large-scale change does not happen overnight, or even over months. The key is to stay focused on outcomes and on helping your organization—and to keep nudging in the right direction.