Personal Finance

Real organisational change is counter intuitive

biz-fear

Summary

  • Change efforts have to be linked into all the 7S framework elements of the organisation.
  • Inevitably, everyone will say all the right things, but on Monday morning things will go back to the way they have always been.
  • Instead, it makes sense to have change projects that staff co-create, so they have a chance to put in practice new ways of approaching problems.

“Change is a door opened from the inside” says a French proverb. Organisational culture change efforts fall under many banners, usually tagged with aspiring adjectives like: transformational. In the hard light of day, one sees that the majority of the change efforts fail for a variety of reasons, one of which is that the thoughts, feelings and beliefs that drive staffs’ behaviours are not taken into account. Quite simply: we humans, often don’t behave in a rationale manner, our emotions drive us, we are not as logic driven as we like to think. Like the preacher, intoxicated with their own verbosity, management generally thinks that it is someone else, not them, that has to change.

Conventional change efforts usually fail, to succeed one must take into account counter intuitive insights, that are not immediately obvious. Listen, listen and listen are the first steps. Focus on root cause analysis, continually asking why.

HIGH FAILURE RATE

Difficulty of setting a strategic direction, making a shift in business performance in an organisation of any size and scope should not be underestimated. All sorts of organisations and companies in Kenya, and globally, try and make themselves into significantly better performers. A few succeed, many fail, with the majority of the outcomes failing somewhere in-between, tilting to the lower end of the scale. Research by McKinsey & Co. suggests that only 1 in 3 attempted corporate transformations succeed.

In every case the prime goal is the same -- to make a change in how the business is operated in order to cope with a more challenging market environment. Two lessons standout: a) the process takes time. Skipping steps might create the illusion of speed, but never produces the result. And, b) making mistakes in any of the steps, can have devastating effects later on, and may negate hard fought gains.

SMART PEOPLE WITH BRIGHT IDEAS IS NOT ENOUGH

Kenyan business and public sector landscape is littered with organisations who tried to improve their performance, but for various reasons, ran into problems, and no longer exist in their original form. Prime example of a failed change programme is the case of Unga Group.

In 1998, a senior manager from a well known professional services firm attempted to transform the fortunes of Unga, whose roots go back almost 100 years. The ambitious change management attempt executed with flourish and a lot of hype ended in disaster. Unga’s share price plummeted and one of the main shareholders, had to sell significant property assets, to raise cash to compensate for their losses.

It took Unga another 8 years, under a seasoned MD and finance director contracted from [new investor] Seaboard, with solid experience in grain milling and distribution, to again break-even and be profitable.

For an organisation to really change, management needs to take into account the irrational side of human nature.

“Be the change you want to see in the world” is Ghandi’s famous thought that will often be quoted by CEO’s attempting to lead the change effort. The catch is that it is probably the leadership who don’t see themselves as having to change. How many bosses will honestly say ‘no’ to questions like: Are you customer focussed ? We human beings consistently think that we are better than we are, in psychology this is called the ‘self serving bias’. For instance, research suggests that 94percent of males will rank themselves to in the top half of athletic performers.

Leaders of the conventional change programme usually get up on their soapbox and preach about the need to change, typically by telling a compelling story.

Often the long winded [do as I say, not as I do] preacher, can be one of the sinners. Problem is that eighty percent of what motivates the leader, and bases their message on, does not dovetail with what are staffs’ primary motivators are.

So, the words of the message on the need to make a shift, get lost in the wind. Plus, it is often the unexpected members of staff, who leaders might easily forget, that make all the difference in driving change.

CO-CREATE CHANGE INITIATIVES WITH STAFF

In the beginning, better to spend a lot of time listening to often neglected front line staff, understanding their issues and concerns, rather than telling them, what senior management thinks should happen.

Taking a pointer from design thinking, successful culture change programmes are better designed, co-created by staff, taking into account their issues, and creating ‘change projects’ that they believe are important.

There is a very real reason the co-creation approach works best. In a famous experiment on human behaviour, there were two groups of participants. The first group were issued a lottery number, which if it was the winning number, they would win a cash prize. Second group were asked to write down their number on a blank ticket, in other words create their own [hopefully winning] number.

Researchers then offered to buy back the lottery tickets from both groups. Result was that they had to pay five times more, from those that came up with their own number. This tells us something revealing about human nature -- when we choose for ourselves, we are far more committed to the outcome, often by a factor of 5 to 1.

MORE ACTION, LESS SOUND AND FURY

Change efforts have to be linked into all the 7S framework elements of the organisation, like for instance, systems, staff, skills and strategy All the well meaning sound and fury, will fail dismally if there are just a few training sessions, based a lot of preaching – lecturing.

Inevitably, everyone will say all the right things, but on Monday morning things will go back to the way they have always been. Instead, it makes sense to have change projects that staff co-create, so they have a chance to put in practice new ways of approaching problems.

These projects have to have measurable outcome based indicators so that one can gradually see change happening. For instance, in a hotel, a change project might be improving the quality of food in the staff canteen. In a manufacturing plant, radically decreasing the product defects rate, and customer returns.

Tactics have to involve creating small wins, picking the low hanging fruit. Once staff see that there is a genuine shift, and they are benefiting in a quid pro quo sort of way [you do this for me, I will do that for you] then everyone becomes more confident, becoming more ambitious in their efforts.

What’s that saying: “The road to hell is paved by good intentions.” Well meaning good intentions are not enough. Managers and staff have to be in the action mode, more learn by doing, rather than simply talking.

Fascinating, how we always think it is other person that has to change, ignoring our own window of opportunity, only opened from the inside. Russian author Leo Tolstoy expressed it best: “Everyone thinks of changing the world but no one thinks of changing himself.”

David J. Abbott is a director at aCatalyst Consulting. [email protected]