How to Manage and Benefit from Change

Debbie Zmorenski
Tags: business management, talent management

Great organizations are always changing. I don't mean change for the sake of change, but planned, structured, progressive change that enables organizations to grow, evolve, survive and thrive in any type of marketplace.

When discussing change, many questions arise, such as: "How can you leverage and manage change?" "How can you become a change agent who is constantly and proactively preparing for change?" "How can you create a culture where you are able to make change work to your advantage rather than allowing it to destroy you?"

The better question is, "Why change?" The answer is reflected in the statements below, adapted from Joseph Rost's Leadership for the Twenty-First Century:

Businesses today are experiencing more change than at any time in history, and the pace of change is accelerating. It has taken just 15 years for 25 percent of households to embrace personal computers, 13 years for cell phones, and astoundingly only seven years for the Internet. (Harris, 2002)

There are three types of businesses that implement change. The first is the one that is bottomed out. They suddenly realize that the competition has caught up or maybe even surpassed them and are scrambling to make change in their organization in order to get back on track. Unfortunately for these organizations, by then, it is usually too late. They have been blindsided by change, meaning that they were completely focused on the way they had always done business, allowing new and innovative ideas to catch them off-guard and unprepared to compete.

The second type of organization changes just enough to maintain the status quo. These are the companies that are doing OK. Business is pretty good. They say to themselves, "Why do we have to change? Change upsets employees, and change upsets the customers." Ultimately, they change only enough to maintain their current status. Eventually, they may find themselves in the position of the first organization, where competitors catch up or surpass them.

The third type of organization is the one that embraces and leverages change while creating a culture of change, whereby leaders are encouraged or expected to be change agents. They are continually evaluating their organizational structure and looking for ways to make beneficial organizational change. These organizations use change as a catalyst to drive them forward and to improve their business results.

Jack Welch, retired CEO of General Electric, said, "I am convinced that if the rate of change inside an organization is less than the rate of change outside, the end is in sight."

Even powerful organizations do not usually possess an innate skill for making change. It seems to be something that is learned over the long term, and it is a painful process for most.

Invariably, when we suggest to organizations that they become more effective at change, the reaction is defensive. Comments like, "You have to be kidding! We're great at change. We change all the time. We love change!" The truth is, most organizations are not good at change and are especially lacking in the ability to communicate change to employees in a positive way.

Embracing and leveraging change helps companies to maintain competitive advantage. Knowing and facing this fact is the first step in proactively utilizing change to the advantage of the organization. In order to proactively plan for change, ask yourself and your employees the following questions:

  1. What are the early warning signs in your industry that change is inevitable?
  2. What systems, structures and processes might you put in place to maintain competitive advantage over your competitors and avoid being blindsided?
  3. How can you understand the thinking of demographic groups not represented in your organization?
  4. If you were your own competitor, how could you catch up to or surpass your company?
  5. What customer requests seem the most outrageous and impossible? If you were to consider meeting these requests, what would you have to change to accomplish this task?
  6. What technologies have recently been announced that could threaten your business?

In order to anticipate and leverage change to the advantage of the organization, you must be aware of the external forces driving change. There are three major categories of external forces driving change: information technology, demography and customers.

Information Technology

The network of computers linked around the world has become a major driver of change in the environment. The world is shrinking, not only creating new and exciting business opportunities, but also creating tough competition. Organizations can now be global, delivering services and information to customers faster and more effectively than ever before. Suppliers are connected through technology, creating efficient systems for ordering, delivery, communication and processes such as just-in-time ordering.

So what does this mean to your business? In order to maintain competitive advantage, your company must accelerate its ability to learn in order to keep up with accelerating change driven by technology. At the same time, you must manage the decisions that are made around choosing and implementing technology that most benefits your organization.

Demography

Demographic differences in the behaviors of customers and employees are the catalyst for organizations learning to meet a broad spectrum of needs and wants for both categories.

Generally, employees are more educated and as a result expect more involvement and more interesting work. Add to this complication that the workforce today is more diverse, creating unique opportunities and challenges. The rules for motivating employees have changed, and cultural differences must be taken into account.

Interestingly, the same demographic challenges that apply to employees also apply to customers. Due to the diverse demographics of customers in the marketplace, it is increasingly difficult to figure out how to meet the broad spectrum of customers' needs and wants. Companies may find themselves trying to be all things to all people, which is an impossible task. Organizations may have to consider changes that will help them to identify and meet their core customers' needs.

Customers

Customers are more demanding and less tolerant of mistakes than ever before. They want exceptional service. They want employees to be courteous, knowledgeable and proactive in understanding their needs. Customers expect to be involved in decisions that affect them. They want to be asked about processes that impact them and their lives. They want more say and more control. These demands make them a driving force for change in industry.

An organization must change to meet customers' needs or fail. Without the customer, there is no business. Clients often ask, "How do I know what to change?" The answer is not a simple one. There are many factors to consider, but as far as the customer is concerned, the best way to know what to change is simply to ask them, and ask them frequently. "How are we doing? Are we meeting your needs? If not, what can we do better?"

To meet customers' needs and to operate in a fiscally responsible manner, companies must know for sure that they are changing the right things. If they do not, they will find themselves spending a great deal of time and money on ineffective change, or change for the sake of change.

Customer relationship management, commonly referred to as CRM, is one way to effectively manage customer-driven change. CRM involves integrating all customer information and making it available to all employees dealing with customers. CRM eliminates the guesswork and the need for psychic powers.

When pondering change for your organization, the important thing to remember is that change must happen for the right reasons and in the most effective way possible. A plan for change, based on real data and information from customers and employees, must consider the need for new technology and the ever-evolving demographics in the workplace and customer base.

As any organization that is trying to deal with change that is coming fast and furious from external and internal forces knows, it seems like an overwhelming task to compete and grow in an environment where change is a constant. To help manage and benefit from change, from a leader's perspective, here are three tactics for change management.

Tactic 1: Learn to anticipate the need for change. If an organization waits until circumstances force it to make change, it is too late. Anticipating change means constantly looking at the internal and external forces that are driving change. Once the factors that are driving change have been identified, it is easier to anticipate change.

Tactic 2: Communicate change to all employees up front and candidly. One of the most important steps in a successful change process is communication. Everyone in the organization must receive the communication. Leaders must be held accountable for ensuring that the communication flows in all directions, and especially to the front-line employees.

Employees must understand why the change is happening. In order to achieve buy-in, leaders must candidly and truthfully tell employees the reason(s) for change. One of the most common mistakes that leaders make is that they assume employees do not care or will not understand the factors driving change. These are excuses for avoiding a tough task. Seldom do employees accept the old dictatorial style of "Do it because I'm the boss" or "Trust me on this."

Like it or not, employees want to know, "What's in it for me?" This is not about monetary compensation. The benefit for the employee may be a better work environment, more involvement, more opportunities, or it may be as simple as everyone keeps their jobs. Also, statistics show that most employees want communication face to face from his or her leader. They do not want to hear about changes second-hand (i.e., the news media). Failure to communicate even the smallest change candidly and up front erodes trust and creates fear.

Tactic 3: Deal with the emotions of change. As leaders prepare to make changes in the organization, they must recognize that change is emotional and plan to deal with the emotions of employees, customers and vendors.

The plan should incorporate not only the methods to work through the emotions of change but also strategies for communicating the new processes and policies for getting work done. Leaders must ask themselves, "How might employees, customers and vendors react when they hear the change news?" Natural emotional reactions to change are anger, fear and frustration.

Leaders who respond with impatience or anger to the emotions of change are validating the employee's belief that the change is bad. The result may be an unhappy and less productive workforce, high turnover of skilled and knowledgeable employees, and possibly even formal complaints to employee relations or unions.

So what does all of this mean to you as a leader? It means that your job is to anticipate change and to figure out what it looks like from the business perspective. You must identify the internal and external forces driving change in your organization and, considering these forces, identify how to implement change effectively, leveraging change for success.

It is also means that it is your job to help employees accept change and to assist you in implementing change that will drive the organization forward. Ensure that part of your change plan includes a comprehensive communication process and that it addresses the emotional aspects of change. It is not always comfortable, but it is reality and something from which great leaders do not hide.