Bleeding the Change

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Change management is notoriously difficult. One of the reasons may be because the organizations are making the same errors all over again and they do not learn from good or bad experiences. I have seen the same pitfalls across the biopharmaceutical sector to various extent. The new executives coming in, big ideas are flashed out, and then everybody is asked to implement what they were told. The results: poor or just plain bad. Even if the initial implementation phases go pretty successfully, the sustainability of the change is usually short-lived.


Change management may be done differently, and definitely, in the more efficient way. There is a lot of very insightful literature on the change management, and I will share some of the key learnings with you.

John P. Kotter insightful HBR articles on change management identify eight different acceleration steps the organization should take, that maximize the probability of long-term change adoption and overall transformational success:

Stage 1: Establishing the sense of urgency. This step is critical, and many organizational transformations fail because leadership underestimates that step. Without building that urgency, employees will be staying in their comfort zones. Leadership responsible for change management in a given organization has to communicate purpose (business crisis or opportunity), prominent enough for them to start taking risks and actions.

Stage 2: Build a Guiding Coalition (GC). Typically, the change within organizations has been done top-down. It is the least effective way. Only people from within the company can achieve the truly powerful and successful transformations. The GC should be formed from the volunteers and secret change agents identified within your organization (‘positive deviants’). The identification of change agents should start by finding people within the company, that already do things differently and better than everyone else, and allow them to be a driving force of the change. The GC should operate outside of established hierarchies, in the form of a loose network. The key to the success of this dual operating system is the ability of the senior management to accept that new dual operating model. They have to be comfortable with losing some of their power and control. If the top leadership is not buying-in, they can and most likely will, sabotage the whole endeavor. People will go far to protect their status and power. The success of Stage 2 depends on the guidance and strong leadership of the CEO or executive committee.

Stage 3: Create a vision and change initiatives. The vision has to be simple, possible to communicate in under 5 minutes statement and easy for people to understand. Vision should be created with inputs of employees, executive management and/or consultants. It gives GC the direction and ability to identify corresponding strategic initiatives to achieve that vision. GC is a guiding force in vision creation and remains in charge of it. The consultation with the executive committee is an important step that should be considered/implemented, anyhow, the inputs from them may be regarded as by GC on a case by case basis and do not need to be automatically accepted.

Stage 4: Communicate the vision and create relevant buy-in. Vision has to be communicated using every possible vehicle to ensure rapid and successful adoption. Passionate GC members should spread the enthusiasm within the organization and recruit volunteers. Contrary to this approach, the typical top-down communication would, most likely, result in cynical and discussions among employees and low adoption rates. This stage is also connected directly with Stage 1. It is all about motivation, enthusiasm, and teaching the desired behaviors. Without it, the transformation will lose its steam and will not reach all employees and levels within the organization.

So-called ’20/60/20 rule’ is a guiding principle here. When you pursue an organizational change, around 20% of people will immediately buy-in, 80% will need to be convinced, and the remaining 20% will never accept the changed status-quo.

As to last 20% mentioned above, before taking it further and letting them go, on a cultural mismatch basis, it is important to listen to their counter-arguments as they may raise essential points, which are worth considering. Sif those points are considered, some of the resistant workforces may transform into change supporters.

Stage 5: Empowerment of others to act on a vision and removal of barriers. To empower the GC and volunteers, they should be given a space to operate, encouraged to take risks and bring outside-of-the-box solutions to the table. If the organizations have any existing structures or hierarchies that are in the way of change, they should be removed. Same applies to senior managers who resist the change. Both factors can slow down or entirely cease the transformation progress if not taken care of imminently after identification.

Stage 6: Celebrate the short-term wins. It is important to note, communicate and reward the initial progress. The first short-term wins should be carefully planned and executed within 12-24 months. The employees behind those wins should be rewarded accordingly. Short-term gains are critical to maintaining the employee’s motivation during the transformation process. It also allows to further dismiss the skeptics and resistance to the change within the organization. Results always speak for themselves. Success breeds success.

Stage 7: Do not declare victory too soon. The lessons learned and short-term wins should be carefully used to change existing systems, structures or policies that may undercut the vision. To maintain the ongoing interest, the volunteers contributing to the most spectacular wins should be developed and promoted. They will be serving as change agents that re-invigorate the organization with the recruitment of new volunteers and the creation of new initiatives. Beware of calling it a complete success to early. Still, opposing forces can exist within the company, and use this premature declaration of victory to their advantage, ceasing or sabotaging the further improvements by returning to the previous singular, hierarchical operating model.

Stage 8: Embedding the change into the company culture. The final win comes only, when the new approaches are thoroughly institutionalized and absorbed by all the employees and become the part of their behaviors.
Those behaviors will be driving future company success. Thus, promoting the right people who are sharing the new values and norms, participate actively in change management is critical. Only employees who display the right attitudes and adopted approaches should be promoted within the organization. The leadership succession plans should be consistent with same.

When it comes to change management, transformation efforts, they require thorough preparation, patience, and resilience. The classical, hierarchical, top-down methods of managing transformations do not work, as they can not handle the challenges and complexities of the accelerated change. The only way to overcome it is to reverse the approach, let the volunteers o drive it, and do it outside of the typical hierarchy. That dual operating system allows to continuously assess the business and move on with higher speed, enthusiasm, and agility. It will enable the company to potentially outperform their competitors and deliver the unique value to the customer.

 

References:

1. Leading Change – Why Transformation Efforts Fail, Harvard Business Review, John P. Kotter, Jan 2007

2. Accelerate – How the Most Innovative Companies Capitalize on Today’s Rapid-Fire Strategic Challenges-and Still Make the Numbers, Harvard Business Review, John P. Kotter, Nov 2012

3.Your Company’s Secret Change Agents, Richard Tanner Pascale, and Jerry Sternin, Harvard Business Review, May 2005

4. Organizational Alignment, Performance, and Change in Professional Service Firms, Harvard Business School, John Gabarro, May 2010

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