The Irrational Side of Change Management

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The McKinsey Quarterly published an excellent paper by Carolyn Aiken and Scott Keller, that explains why change management theory often doesn’t work just like that. The background to their work is a 2008 McKinsey survey confirming that the success rate of change programs remains stuck at around 30%, more than 10 years after John Kotter’s similar survey leading to his famous 8 step approach for leading change.
Aiken and Keller’s approach is not to challenge the widely accepted principles of change management but to look at what makes the theory successful or not, from a psychological angle. In other words, this isn’t about the right change management things to do; it is about how to do it right.
The base to their work is a McKinsey model suggesting that four basic conditions are necessary before employees will change their behaviour:

• a compelling story
• role modeling
• reinforcing mechanisms
• capability building

While the model makes perfect sense and is a good reflection of common change management theory, things can be quite different in practice as Aiken and Keller explain:
“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 unintended consequences from their efforts to influence change. Why? Because when they implement the prescription, they disregard certain, sometimes irrational—but predictable—elements of human nature.”
From their research they have therefore identified nine insights into how human nature gets in the way of successfully applying the four basic conditions for behavioural change:

1. What motivates you doesn’t motivate most of your employees
2. You’re better off letting them write their own story
3. It takes a story with both + and – to create real energy
4. Leaders believe mistakenly that they already “are the change.”
5. “Influence leaders” aren’t a panacea for making change happen
6. Money is the most expensive way to motivate people
7. The process and the outcome have got to be fair
8. Employees are what they think, feel, and believe in
9. Good intentions aren’t enough

Each insight is described in details in Aiken and Keller's article. As simplistic as these 9 points may sound, I think they will help change leaders tremendously .
Access the full article here (free access through the Forbes website) and see other selections of change articles 

Change Management Top “HR Skill for Survival”

The well known UK based Chartered Institute of Personnel and Development (CIPD) conducted an online poll among its HR community to determine the most important “HR skills for survival”. More precisely, the respondents were asked to chose three competencies they believed were most important to establish the function's effectiveness and credibility in the organisation. The following results came out:
1. Effective management of change (46%)
2. Strategic thinking (44%)
3. Business knowledge (36%)

I am not surprised to see those 3 items on top of the list but, I have to say, am a little surprised to see change management coming out as number 1. This does however fit quite well with IBM’s Enterprise of the Future survey which key finding shows that businesses are being “bombarded by change”. HR managers will typically find themselves in the middle of the battlefield, trying to keep the link between ground troops and generals, sometimes a very difficult challenge during significant change initiatives.
More details about the survey here on the CIPD website.

The Enterprise of the Future

IBM has just published a new global survey among more than 1000 CEO’s to find out what the company of the future would look like. The findings highlight the growing importance of successful change management:

• Organisations are bombarded by change and many are struggling to keep up
• CEO’s view more demanding customers not as a threat but as an opportunity to differentiate
• Nearly all CEO’s are adapting their business models, two-thirds are implementing extensive innovations
• CEO’s are moving aggressively toward global business designs, deeply changing capabilities and partnering more extensively
• Financial outperformers are making bolder plays

Before reading those findings, I would certainly have expected something about the intensity of change, but not to a point where CEO’s claim to be bombarded by it. This is really striking.
From these findings, the study defines what the enterprise of the future will look like:

• Hungry for change
• Innovative beyond customer imagination
• Globally integrated
• Disruptive by nature
• Genuine, not just generous

In other words, businesses need to adopt a very proactive stance towards change and as IBM puts it in the study, the question leaders must ask themselves is: “Does your organisation have a healthy appetite for change?”