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Managing Organisational Change

Organisational change programs to improve business performance are increasingly common yet notoriously difficult to implement. Successful change management depends on management persuading employees to change the way they work, a transformation staff will only accept if they can be persuaded to think differently about their jobs.

CEOs can make things easier if they determine the extent of the change required to achieve the business outcomes they seek. They can choose from three levels of change:
1. Companies act directly to achieve outcomes without having to change the way people work. For example, divesting non-core assets to focus on the core business.

2. Employees may need to adjust their practices or to adopt new ones in line with their existing mindsets in order to reach, say, a new bottom line target. An already ‘lean’ organisation would encourage staff to look for new ways to reduce waste.

3. But what if an organisation can reach its higher performance goals only through changes to the way its people behave across the board?

Suppose the organisation can only sustain a competitive position by fundamentally changing its culture. The collective culture of an organisation is the aggregate of what is common to all of its groups and individual mindsets. Therefore, such a transformation would entail changing the minds of all the individuals within the organisation.

4 Conditions for Changing Mindsets

Each of these conditions is realised independently, and together they add up to a way of changing the behaviour of people in organisations by changing attitudes about what can and should happen at work.

1. A purpose to believe in – what’s in it for me?

Employees will alter their mindsets only if they see the point of the change and agree with it, believe in it, at least enough to give it a try. Staff must understand the role of their actions and believe that it is worthwhile for them to play a part.
For staff to buy in, they must be able to see and relate to the benefit for them – the WIFM (What’s in it for me?). The WIFM will get more traction if it can be presented on an emotional as well as a rational level.

2. Reinforcement systems in tune with the new behaviour

Change management experts agree that reporting structures, management and operational processes, and measurement procedures (i.e. setting targets, measuring performance, and granting financial and non-financial rewards) must be consistent with the behaviour that people are asked to embrace. When an organisation’s new behaviours are not reinforced, employees are less likely to adopt change and new behaviours consistently.

3. Employees must have the skills required for the change

Many change programs ask employees to behave differently without teaching them how to adapt general instructions to their individual situation. Adults cannot learn merely by listening to instructions; they must absorb new information, use it experimentally, and integrate it with their existing knowledge. This means we cannot teach everything there is to know about a subject in one session. Instead, break down the formal teaching into chunks, with time between for learners to reflect, experiment and apply new principles. Large scale change only happens in steps.

4. Consistent role models who ‘walk the talk’

To change behaviour consistently throughout an organisation it is not enough to ensure top level managers are in line with the new ways of working; role models at every level must ‘walk the talk’, with consistent underlying values informing their behaviour. Behaviour in an organisation is deeply affected not only by role models but also by the groups with which people identify. Role modelling must therefore be confirmed by the groups that surround them if it is to have a permanent or ‘deep’ influence (most teenagers can tell you about this).

SUMMARY

It is neither easy nor straightforward to improve an organisation’s performance through a comprehensive program to change the behaviour of employees by changing their mindsets. Nor should it be attempted without first exhausting less disruptive alternatives for obtaining the desired business outcomes. Sometimes tactical moves will be enough; and sometimes new practices can be introduced without completely re-thinking the organisation’s culture. But if the only way for an organisation to reach a higher level of performance is to alter the way people think and act, it will need to create the four conditions for achieving sustained change.