Profiling the darker side of change management (Part 2)

At the end of last year, we saw the passing of Raymond Ackerman (the founder of Pick n Pay) who was a pillar of the South African business community. His passing came at a time when Pick n Pay was facing disruptive headwinds and an environment where consumer spending was under significant pressure. Ackerman was replaced by Sean Summers who introduced some key changes to his leadership team.

This is an indicator that change management will take centre stage in 2024. I began discussing the darker side of this in my previous editorial. In this article, we complete the discussion around the Harvard Business Review (HBR) article that profiles this.

Commitment

The HBR article points out that companies must boost the commitment of two different groups of people if they want change projects to take root: They must get visible backing from the most influential executives (what we call C1), who are not necessarily those with the top titles. And they must take into account the enthusiasm—or often, lack thereof—of the people who must deal with the new systems, processes, or ways of working (C2).

Top-level commitment is vital to engendering commitment from those at the coalface. If employees don’t see that the company’s leadership is backing a project, they’re unlikely to change. No amount of top-level support is too much. In 1999, when we were working with the CEO of a consumer products company, he told us that he was doing much more than necessary to display his support for a nettlesome project. When we talked to line managers, they said that the CEO had extended very little backing for the project. They felt that if he wanted the project to succeed, he would have to support it more visibly! A rule of thumb: When you feel that you are talking up a change initiative at least three times more than you need to, your managers will feel that you are backing the transformation.

The article adds that, sometimes, senior executives are reluctant to back initiatives. That’s understandable; they’re often bringing about changes that may negatively affect employees’ jobs and lives. However, if senior executives do not communicate the need for change, and what it means for employees, they endanger their projects’ success. In one financial services firm, top management’s commitment to a program that would improve cycle times, reduce errors, and slash costs was low because it entailed layoffs. Senior executives found it gut-wrenching to talk about layoffs in an organisation that had prided itself on being a place where good people could find lifetime employment. However, the CEO realised that he needed to tackle the thorny issues around the layoffs to get the project implemented on schedule. He tapped a senior company veteran to organise a series of speeches and meetings to provide consistent explanations for the layoffs, the timing, the consequences for job security, and so on. He also appointed a well-respected general manager to lead the change program. Those actions reassured employees that the organisation would tackle the layoffs in a professional and humane fashion.

Companies often underestimate the role that managers and staff play in transformation efforts. By communicating with them too late or inconsistently, senior executives end up alienating the people who are most affected by the changes. It’s surprising how often something senior executives believe is a good thing is seen by staff as a bad thing or a message that senior executives think is perfectly clear is misunderstood. That usually happens when senior executives articulate subtly different versions of critical messages. For instance, in one company that applied the DICE framework, scores for a project showed a low degree of staff commitment. It turned out that these employees had become confused, even distrustful, because one senior manager had said, “Layoffs will not occur,” while another had said, “They are not expected to occur.”

The article points out that organisations also underestimate their ability to build staff support. A simple effort to reach out to employees can turn them into champions of new ideas. For example, in the 1990s, a major American energy producer was unable to get the support of midlevel managers, supervisors, and workers for a productivity improvement program. After trying several times, the company’s senior executives decided to hold a series of one-on-one conversations with midlevel managers in a last-ditch effort to win them over. The conversations focused on the program’s objectives, its impact on employees, and why the organisation might not be able to survive without the changes. Partly because of the straight talk, the initiative gained some momentum. This allowed a project team to demonstrate a series of quick wins, which gave the initiative a new lease on life.

Effort

The HBR article adds that when companies launch transformation efforts, they frequently don’t realise, or know how to deal with the fact, that employees are already busy with their day-to-day responsibilities. According to staffing tables, people in many businesses work 80-plus-hour weeks. If, on top of existing responsibilities, line managers and staff have to deal with changes to their work or to the systems they use, they will resist.

Project teams must calculate how much work employees will have to do beyond their existing responsibilities to change over to new processes. Ideally, no one’s workload should increase more than 10%. Go beyond that, and the initiative will probably run into trouble. Resources will become overstretched and compromise either the change program or normal operations. Employee morale will fall, and conflict may arise between teams and line staff. To minimise the dangers, project managers should use a simple metric like the percentage increase in effort the employees who must cope with the new ways feel they must contribute. They should also check if the additional effort they have demanded comes on top of heavy workloads and if employees are likely to resist the project because it will demand more of their scarce time.

The article points out that companies must decide whether to take away some of the regular work of employees who will play key roles in the transformation project. Companies can start by ridding these employees of discretionary or nonessential responsibilities. In addition, firms should review all the other projects in the operating plan and assess which ones are critical for the change effort. At one company, the project steering committee delayed or restructured 120 out of 250 subprojects so that some line managers could focus on top-priority projects. Another way to relieve pressure is for the company to bring in temporary workers, like retired managers, to carry out routine activities or to outsource current processes until the changeover is complete. Handing off routine work or delaying projects is costly and time-consuming, so companies need to think through such issues before kicking off transformation efforts.

Creating the framework

The HBR article adds that, as we came to understand the four factors better, we created a framework that would help executives evaluate their transformation initiatives and shine a spotlight on interventions that would improve their chances of success. We developed a scoring system based on the variables that affect each factor. Executives can assign scores to the DICE factors and combine them to arrive at a project score.

As you can see, change management may turn out to be more complicated than some people think.