Achieving Business Excellence with John Spence

Some Comments on Change Management

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I was recently in Europe visiting with a client company that was going through some “change pains.” As I often do with folks I am working for, I was searching for a few good articles or books to help me describe and communicate key ideas I was trying to impart to them. Here is the actual note I wrote on the plane at 34,000 feet over the Atlantic:

Hello everyone! I hope this note finds you well and that you had a nice weekend. I was traveling back to the US and reading the new Jack Welch book on the plane and came across a chapter that seemed to me perfect to send to you. I copied it directly from his book; I think that there are some ideas that are very useful for your management team here. This is a book of questions that people from all over the world sent to Jack Welch to get his advice. Here is what I thought was really good for you to read:

GETTING GLOBAL BEFORE IT GETS YOU!

Question…

“How should a traditional company, with its solid structures, rigid process, old style culture and long-term employees, change in order to stay competitive in this fast-moving global market? ~ from Sao Paulo, Brazil

Answer from Jack Welch: Organizational transformations, especially the brave-new-world kind required by global competition, almost never happen unless people feel the need for it. Survival is a mighty motivator. Without a crisis, oh how people like the ways things are. The old culture can feel like a warm bath, people never want to get out. And they certainly have no desire to jump into ice water, which is how the radically different behaviors required by the change initiative will feel at first. After all, globally competitive organizations must be fast, flat and transparent. Informal, candid communication is a must. And too is the mind-set that has people constantly seeking best practices inside and outside the company.

Since people won’t jump into ice water they need a push. Which is way any leader trying to galvanize change has to make a case and make it personal. Your people will change when, and only when they see that the new behaviors will improve the company and, more important, their own lives. So get gritty and detailed. Use as much data as you can gather on industry dynamics, profit margins, emerging technologies, competitive trends whatever to come up with two vivid story lines, one about what the company will become if it doesn’t change and the other if it does change successfully. Contrast factory closings with growth opportunities at home and abroad, lost jobs with more interesting and exciting work, and flat or shrinking wages with more money for everyone. Show them the cost of not changing or the reward if they do.

Then start campaigning. Talk and talk and talk. Not believing or absorbing a tough message the first or second time around is human nature. You will have to repeat your case to the point of gagging, and then repeat it again. Eventually, however, if your case is compelling enough, behaviors will change. They will change faster if you publicly praise and celebrate them whenever they occur, and still faster if you reward the people who demonstrate them.

Speaking of people, two other actions will help your transformation effort into a company up to the challenges of a highly demanding global marketplace. First, make sure you start to hire and promote only true believers, people who completely accept the case for change and are excited and passionate to support it. And second, make sure you start to ease out resisters who cannot let go of the good old days, no matter how much persuading they hear. Yes, some of these individuals may do their job satisfactorily, but they should be working someplace else.

From John…

Well, that is what Mr. Welch had to say on the subject and I think he is 100% right. It is also important to remember that he ran an 80 billion dollar company for more than 20 years and during his tenure purchased more than 100 companies. He understands and has lived this many, many times over. His advice is sound and based on vast personal experience. Let me add just a few comments from my own experience (which is no where near Mr. Welch’s) in dealing with change efforts. Here is a short list of the key things I always look for in a successful change initiative.

  1. The top leaders must be fully committed to the change initiative, no indecision.
  2. You need a guiding coalition of key people in the company to support and champion the change across the entire organization. A group of people who are well respected, passionate about the company and actively help build the case for change with all of the employees. Ideally, this should be the entire top management team.
  3. It must be made clear that there is no other option but to move forward with the change. If resisters think they can stop, derail it or ignore it, they will.
  4. Celebrate and reward those who demonstrate the new behaviors and embrace the change, deal decisively with those that continue to resist and cause trouble.
  5. Lastly – communication is the key. All employees need to hear about the positive direction, the small wins, and the things that are going well. They need to see the top leaders working together as a strong team. These key leaders, and especially the top leader, need to be very vocal and visible. The more information you share, the more you communicate the vision, the more you help people understand and buy into the case for change, the better.

Hope that helps a little, I am sure I’ll be sending you more notes like this in the future.

Take good care — John

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Comments

  1. Interesting article, John,

    I like your list of what needs to happen in order to promote a change initiative. I might add a sixth point to that list:

    6. Leaders must clearly communicate how the change will positively impact everyone involved. Change is often not a difficult thing for people to move toward IF they percieve it to be personally rewarding. I often use a simple example to get this idea across: imagine how resistent anyone might be to a change in their paychecks – if that change involved adding another zero to that paycheck. It’s a somewhat silly example of what I’ve found to be a truism – that it it not change per se that most people resist, but change that people percieve to be punishing that causes the most resistance. If a leader can connect positive, personal payoffs to change, he or she is much more likely to meet with success, in my experience.

    Thought that may be interesting – thanks for the great article, John!