Managing Change

As the Red Queen told Alice, “My dear, here we must run as fast as we can, just to stay in place. And if you wish to go anywhere you must run twice as fast as that.” This is often true with most companies, they must grow or the competition will leave them behind. In order to grow faster they must also make changes in their processes. The key to effectively managing change is to create a culture that is willing to embrace change as the new norm. To be effective, you must ensure the whole organization understands that the status quo will no longer be acceptable. The first step in creating a change-management culture is to get everyone’s head wrapped around some very basic definitions:

Organization and coordination of the activities of an enterprise in accordance with certain policies in order to achieve clearly defined objectives

To cause to be different

Change Management
A structured approach to transitioning individuals, teams, and organizations from a current state to a desired future state

Change Agent
A person effective at change management

All managers must accept these concepts and integrate them into their daily vocabulary. You should add change management as a deliverable into their job descriptions and measure them against it during annual performance reviews. Their goals each year must include at least one significant improvement that pushes their teams to a higher level of performance. The managers who are uncomfortable with change will often self-select and move on.

For effective change to take place the employees and/or the organization must

• feel uncomfortable in the current state;
• possess the ability to see an improved new state;
• be willing to make the change; and
• be capable of making the change.

Creating a culture of continuous improvement requires following a number of process steps:
1. Gap analysis
This is a candid, fact-based discussion regarding the current performance of the individual or business unit versus the required level in the future. Sometimes a very difficult decision must be made as to whether the performance improvement needs to happen urgently or not. The timing should be based on available data regarding market issues, customer satisfaction, profitability, safety concerns, and the like. For example, if this is a safety concern, a very urgent path must be taken even if it costs more money. For a skill-set deficiency, it may desirable to retrain current employees and reach the goal along a less urgent but still aggressive timeline. However, if the deficiency may lead to loss of revenue, profit, or customers, the fast path may be correct even if it requires replacing underperforming employees.

This is obviously very situational and requires an honest evaluation of the size of the gap and the priority for closing it. A successful gap analysis will help employees to see the possibility of a better future state and to feel uncomfortable in the current one. This future state must be clearly articulated to the team. This allows team members to provide feedback on your analysis. If you have missed a key premise, it may be necessary to adjust your target level or list of needed actions. A consensus opinion is far superior to cramming one down team members’ throats. However, there are some situations where settling for the consensus opinion would not meet the needed business goals. In this case, educating team members on competitive best practices usually did the trick. Some staff may see this as a threat to their positions or long-held beliefs and practices. This must be dealt with in an open and candid manner.

2. Staff evaluation
Now that the staff has a clear understanding of the future state and the changes needed to close the gap, you must evaluate them for their willingness to change. Are they truly committed to changing or just giving lip service to the ideas? Will they embrace the change or undermine the process through pocket vetoes or other passive resistant behavior? Will they be able to make the change? Even if they embrace the idea of change, they may not have the necessary skill set or ability to grow as needed. This may be the time to make the tough call and either reassign people to positions where they can be successful or remove them from the organization.

3. Personal development plans
After confirming the staff has both the willingness and the ability to change, focused development plans should be mutually agreed upon. Additional skills training may be needed in new software applications, business processes, or management techniques. This is the perfect opportunity to demonstrate that making changes for the company will result in growth and development for individuals as well. It may even turn out that with the acquisition of new skill sets, increases in salary are appropriate.

4. Coaching
Even when they have a professed willingness and demonstrated ability to change, some individuals may need coaching to get to the new level of performance. Weekly one-on-one meetings and periodic reviews of key performance measures are excellent methods to track progress and make course corrections. Sometimes the future state must be reviewed and clarified to maintain the employee’s motivation.

5. Performance improvement plans
If individuals are not progressing up the learning curve at an acceptable rate and your coaching is not working, it may be necessary to document this in a written performance improvement plan. This is the best way to communicate your concerns about the difference between expected and actual behavior. Often employees may not realize you are serious until they face the prospect of written warnings being placed in their personnel files. This should not be delivered as a punitive action but rather as a path for them to follow to be successful. This may cause them to reevaluate their belief in the improvement goal or assess if they are on the appropriate career track.

6. Top grade if necessary
As a last resort, and only after a failed performance improvement plan, it may be necessary to replace an employee.

The goal throughout this process is to get the staff to embrace the idea of change. If realistic goals that can be compared to industry norms or competitive offerings are set, the team will not view your actions as arbitrary. You must be forthright, approachable, and focused on the process. The staff may not agree with the direction you are taking them, but at least they will see it as a fair and transparent process.

The better you are able to articulate the future state, the easier it will be for the staff to get behind you. It is best to start with some small changes in order to train the staff and allow for coaching along the learning curve. Once a change model is in place, you will often find that employees will push even harder than you would because they will see many more opportunities.

Any organization planning to deliver unique, world-class, or industry-leading results must be able to adapt easily to evolving market demands, technology changes, and business rules. These often require functions to reassess their roles and make the necessary changes. Just when a manager has his or her processes running smoothly, additions or deletions are required. Staying focused on the process and knowing how to agree to disagree are vital elements for success. To really accelerate change you must embrace conflict resolution and become proficient at leading your teams through the required steps to reach workable compromises.

About the Author

William Mince

William Mince is an experienced public company executive who has successfully grown organizations through organic development of new product lines and acquisition of both public and private entities. He has been on the due diligence and integration team for over twenty-five acquisitions. He is a results driven leader with significant operational and margin improving successes.