If your company is going to stay in business, it has to change, and that can be scary.
For many people, change is more threatening than challenging. They see it as the destroyer of what is familiar and comfortable rather than the creator of what is new and exciting. Most people, and organizations, would rather be comfortable than excellent.
But these days, if you don’t change, you stagnate and die. We must implant change in the corporate culture.
As a businessman myself, and as an adviser to executives, I’ve encountered many examples of constructive change brilliantly executed.
Let me share with you some of the things I’ve learned:
- People will change only if the alternative is worse than change
Sometimes it’s hard for people to internalize the need for change. A Naval aviator once made an interesting observation to me that illustrates the point.
He said many pilots have died because they stayed with their disabled aircraft too long. They preferred the familiarity of the cockpit to the unfamiliarity of the parachute, even though the cockpit had become a death trap.
Many businesses have died because their people preferred the familiar but deadly old ways to the risky but rewarding new ways. We must teach them that to stand pat is to perish.
- People hunger for stability amid change.
The steady, reliable people in any organization are often fearful of change. We must keep them in mind. We must assure them that change doesn’t mean an end to their world; it means a continuation, but with improvements.
Here are some things we can do:
Explain the reasons for the change. When people understand the logic behind change, it becomes more rational and more comfortable.
Show how our plans keep risks to a minimum.
Emphasize the things that will remain the same.
Let them know what to expect, step by step.
Let them know that top management is fully behind the change. Our confidence in the value of the changes will be reassuring to them.
Commend them and recognize them for the constructive changes they make.
- For change to be successful, it must be planned.
We must be in control of the changes instead of at their mercy. Successful changes are based on values.
As Levi Strauss CEO Robert Haas told Harvard Business Review, “Values provide a common language for aligning a company’s leadership and its people.”
Levi Strauss summarized its values in a document it calls its “Aspirations Statement.” Everyone in the company is familiar with it and is guided by it. Whenever a Levi Strauss team analyzes a new idea, among the first questions asked is “Is it aspirational?”
When Honeywell decided to change its orientation from national to global, it adopted a set of values that included integrity, quality, performance, mutual respect and diversity.
These values enabled it to steady its course through the sea of change.
- Planned change involves a three-step process: softening, reshaping and restabilizing.
The softening stage is the most uncomfortable for employees. After years of doing things the same old way, they have been hardened into rigid habits. Now they have to unlearn them.
When you want to soften something, you usually apply heat. During the softening stage, we apply heat by attaching a stigma to the old behaviors we want to discontinue. We stop rewarding them.
This is the time when you’re likely to encounter the greatest resistance to change. Even your management people may dig in their heels. After all, you’re changing the system under which they rose to their present jobs.
Here’s where you need skillful communication: You must make clear the reasons for change and the consequences of not changing. The gain and the pain must be made clear to managers and employees alike.
John F. Welch Jr., the CEO who led General Electric through a highly successful change in corporate culture, identifies four types of management individuals with whom we must deal during the “softening” stage. Here’s how he classifies them:
- People who deliver on commitments and share the new values. These are the people you want to retain and reward.
- People who don’t meet commitments and don’t share the new values. These are the people who must go.
- People who sometimes fail to meet their commitments, but who share the values. For such people, a change of environment may produce a change in behavior. Give them a second chance.
- People who meet commitments but don’t share the values. In Welch’s words, this may be “the autocrat,the big shot, the tyrant” -people who try to force performance instead of inspire it. The results they get aren’t worth the price. They’ll have to change or go.
The reshaping phase calls for a positive approach. We’re now less concerned with rooting out old ways and more concerned with implanting new ways. Managers and employees must be convinced that the new way is the right way.
Your staff and employees now must learn a whole new attitude toward their work. Managers must see themselves as facilitators, not dictators. Employees must see themselves as value adders, not order-takers or machine operators. This calls for a well-thought-out educational program.
Finally comes the restabilizing stage. During this period, you want the new behaviors to become a natural part of the everyday routine in the work place.
Pilot projects can help managers and employees feel comfortable and natural with the new ways during this stage. Let them try out the new methods in “practice runs” to see how they work.
Another way to replace the discomfort of change with the comfort of familiarity is to provide suitable role models. Find people who are familiar with the new ways and let them model them for the rest of your managers and employees. When your people witness the success of the new methods, they’ll feel more comfortable about following them.
The system of compensation and rewards should be based on the new behaviors we want to encourage. If we’re asking people to value teamwork above individual effort, then the system must be set up to reward team efforts.
My friend Joe Jacobs, founder and CEO of Jacobs Engineering, used this principle to great advantage during the ’80s. Jacobs Engineering’s individual offices each operated as separate profit centers. When Joe took on a project that required the pooling of resources from several offices, he had difficulty getting the teamwork he needed.
Executives from each office looked at the project from the standpoint of its effect on the profits of their respective offices. Joe solved this by tying each executive’s compensation to the performance of the company as a whole. When he did that, he got genuine teamwork.
Throughout the change process, everyone from line workers to senior management must be convinced that the company is behind the change. CEOs themselves must take responsibility for encouraging the new behavior. They must model it as they deal with people on as many levels as possible in the organization.
It may take years to effect fundamental change, and you should never consider the job finished. Instead, you should look for ways to institutionalize change. When your people are oriented to change and educated in effective ways to bring about change, you’re geared up for the future.