4 Tips for Managing Organizational Change

Launching
a major transformation effort is a common way for business leaders to
get ahead of the competition. But too many of these efforts fail; many
people tend to resist and may even seek to undermine them.
Transformations that do succeed have one thing in common: Change is
driven through empowerment, not mandated from the top.

My research shows that successful efforts not only identify potential
sources of resistance from the start but also make plans to overcome
any that may arise. And this is not done through bribery, coercion or
cajoling, but by enabling people to drive organizational change
themselves. Here’s how to do that.

START WITH A SMALL GROUP: Typically, leaders launch
transformative efforts with a large kickoff to build momentum and
communicate objectives clearly. This can be effective if a consensus
already exists around the initiative. Still, inertia may prove to be a
powerful force. A large campaign essentially presents an initiative as
inevitable, which can harden the opposition.

Most successful transformations begin instead with small groups that
are loosely connected by a shared purpose. They’re comprised of people
who are already enthusiastic about the initiative but are willing to
test assumptions and convince their peers of the change. This has to be
done on the ground without the involvement of leaders so that people
feel ownership over the effort. For example, when Wyeth Pharmaceuticals
set out to adopt lean manufacturing practices, it began with just a few
groups at a few factories. The effort soon spread to thousands of
employees across more than a dozen sites and cut costs by 25 percent.

IDENTIFY A KEYSTONE CHANGE: Every change effort
begins with some kind of grievance. For example, leaders may have costs
that need to be cut or disengaged employees to address. Wise managers
will use a grievance to create a vision that moves the organization
forward and creates a better future. This vision, however, is rarely
achievable all at once. Most significant problems have interconnected
root causes, so trying to solve them all in a single and ambitious
vision is more likely to devolve into a five-year march to failure.
That’s why it’s crucial to start with a “keystone change,” which
represents a clear and tangible goal, involves multiple stakeholders and
paves the way for bigger changes down the road.

That gap between aspiration and practical reality was the challenge
that Barry Libenson encountered when he arrived at Experian as chief
information officer in 2015. In his conversations with customers, it
became clear that what they most wanted from his company was access to
real-time data. Yet to deliver that, he would have to move the
technology from traditional infrastructure to the cloud, an initiative
that raised serious concerns about security and reliability. He began by
developing methods for accessing real-time data  for internal use rather than developing customer-facing features first.

“Once we developed some internal APIs, people could see that there
was vast potential and we gained some momentum,” Libenson told me. By
starting with a keystone change, Experian was able to successfully move
to the cloud.

NETWORK THE MOVEMENT: All too often, we associate
any large-scale change with a single charismatic leader. For instance,
the American civil rights movement is commonly associated with Martin
Luther King Jr. In much the same way, turnarounds at major companies
like IBM and Alcoa are credited to their CEOs, Lou Gerstner and Paul
O’Neill.

The truth is more complex. Martin Luther King Jr., for example, was just one of the “big six ”
civil rights leaders. Gerstner gained allies by refocusing the company
around customers. O’Neill won over labor unions by making a serious
commitment to workplace safety. That’s why in his book “Leaders: Myth
and Reality,” Gen. Stanley McChrystal defines effective leadership as “a
complex system of relationships between leaders and followers, in a
particular context, that provides meaning to its members.”

Every large-scale change requires leadership at the top as well as
the widening and deepening of connections through wooing an ecosystem of
stakeholders.

Consider the case of Talia Milgrom-Elcott and 100Kin10. When she set
out to start a movement to recruit and retain 100,000 STEM teachers in
10 years, she knew that there was no shortage of capable groups working
to improve education. In fact, she had worked with many people building
myriad approaches to this same issue. But they had never met one
another. And so instead she created a platform that brings together
nearly 300 partner organizations to work together through conferences
and networking.

SURVIVING VICTORY: Often the most crucial part of
any transformation effort is when the initial goals have been met.
That’s why successful transformation leaders focus also on the process
of change itself. If Wyeth had stopped at a 25% cost reduction it would
have soon found itself facing the same problems again. However, because
its employees embraced the lean manufacturing methods it introduced, the
company was able to keep moving forward.

In some cases, the benefits of a successful transformation can last
for decades. Remembering Gerstner’s turnaround of IBM in the ‘90s, one
of his top lieutenants, Irving Wladawsky-Berger, told me, “Because the
transformation was about values first and technology second, we were
able to continue to embrace those values as the technology and
marketplace continued to evolve.” After nearly going under, the company
remains profitable today.

Copyright 2019 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate