Management Excellence by Art Petty

There is a fascinating article on Change Management in a recent issue (Issue 2/2009) of the McKinsey Quarterly (subscription required) by Carolyn Aiken and Scott Keller, entitled: “The Irrational Side of Change Management.” 

And while much has been written over the years on this important and vexing topic, the authors offer some insights and ideas that they describe as counter-intuitive, but potentially helpful in improving your odds of success with these initiatives.  This article alone was for me worth the hefty annual subscription price.

On a depressing, but not surprising note, the article cites a 2008 study of over 3,000 executives that found that 1 in 3 change-management initiatives fail. These low success rates have been well documented by Kotter as well as other researchers in the field of change management.

Art’s Observations on the Failure Rate: We all know that most change management initiatives fail miserably.  Recall your own reaction to the latest program or makeover handed down from on high.  The majority are met with emotions ranging from curiosity to outright cynicism.  On the other hand, think of the rare initiative that stuck.  Why did this one work?  My unscientific guess is that the leaders worked hard to create an environment ripe for change. 

The authors cite the 4 basic conditions necessary for change according to the theories around the psychology of change management:

1. A compelling story-employees must see the point and agree
2. Role modeling-employees must see management and other colleagues behaving in the new way.
3. Reinforcing mechanisms-systems, processes and incentives must be in line with the new behavior
4. Capability building-employees must have the skills required to make desired changes

Their thoughts on how these 4 conditions are applied: “The prescription is right, but rational managers who attempt to put the four conditions in place by applying common sense typically misdirect time and energy, create messages that miss the mark, and experience frustrating and unintended consequences from their efforts to influence change.”

The authors go on to share nine insights into application of the 4 conditions that explain why change initiatives might fail and how to improve the odds. My focus in this post is on two of the insights related to the “compelling story” condition for change. 

First: “What motivates you doesn’t motivate most of your employees.” 

While we tend to focus on telling stories about what has changed and why we have to change in kind, or what we want to accomplish, research shows that people respond best to stories that address five forms of impact:

• Impact on society
• Impact on the customer
• Impact on the company
• Impact on the working team (environment)
• Impact on “me”

The money quote here: “This finding has profound implications for leaders. What the leader cares about (and typically bases at least 80 percent of his or her message to others on) does not tap into roughly 80 percent of the workforce’s primary motivators for putting extra energy into the change program. Change leaders need to be able to tell a change story that covers all five things that motivate employees.”

Second: “You’re better off letting them write their own story.”

We as executives and leaders go to great lengths to tell our change stories.  We call special meetings, conduct town halls, run webinars, write blog posts and often walk away feeling like we’ve done our job.  We’ve spoken, the message is clear and everyone must agree or we’ll single them out as resistors. 

The authors suggest that while the stories about the need to change (told in ways that address the five forms of impact) have to get out there, we would be better off listening more and telling less. 

“This reveals something about human nature: when we choose for ourselves, we are far more committed to the outcome (almost by a factor of five to one). Conventional approaches to change management underestimate this impact. The rational thinker sees it as a waste of time to let others discover for themselves what he or she already knows—why not just tell them and be done with it? Unfortunately this approach steals from others the energy needed to drive change that comes through a sense of ownership of the answer.”

 Art’s Observations:  While there is much more to the article than I am highlighting here, just the lessons from the first two points alone are worth the price of admission.  My robust translation of these points includes:

• Leaders, you’re going to have to recognize that just because you say that we need to change doesn’t make it so.  Frankly, there are a lot of reasons why people will distrust or ignore your calls for change.  If you don’t carry leadership credibility (beyond the title), you are likely spewing hot air.

• I love linking the 5 Impact points to the story-telling process on why change is needed.  Several of these are very personal and as the authors highlight, those things that we choose and value for ourselves are much more powerful than those given to us. 

• Last and not least, the idea of setting the stage and then shutting up and letting people ferret out for themselves why change is needed and what it means is something you can put in place today.  Quit talking, start listening and if you do have to talk, mind your Questions to Comments ratio.

The Bottom-Line for Now:

Like so many things in leading and managing, there are no silver bullets for success. A lot of really smart people try and drive change and fail.  Those that succeed seem to have intuited that change is intensely personal and that their role is to create an environment where the need for change can be processed and where individuals can take control of defining the terms of change.  While it seems that just when the leader thinks that he/she should be hands on, is precisely the time when he/she should step back and let go. 

More soon on this compelling topic.