You know this from the reality of your own companies. This is why it is unsurprising that 70% of planned changes fail their initial aims. McKinsey did the research(1). Board members need awareness of this as companies commit to transformation. Our experience shows that Boards and Senior Management are obsessed with Change Methodology, the set of procedures that cause change to happen.
Competing firms argue that their steps are best. Boards look for rational, well-laid out plans that guarantee the desired outcomes of a change campaign. Change is recognised as a constant, sometimes unwelcome, element of our daily lives. Much has been written about how we can cope with and manage changes, both on a personal and organisational level.
A Google search of ‘Managing Change’ yields over 21,400,000 pages devoted to techniques for managing this process. Interestingly, if you search for ‘Why Change Fails’ the number rises above 416,000,000! So there is no scarcity of wisdom on the knowledge, skills and strategies that help us fathom this organisational conundrum. With such insights available, and with many consultancies offering support, why is the magical solution so elusive?
Sheppard Moscow is no stranger to working with organisations who are grappling with this challenge, and we want to share our perspectives on some of the missing links in the complex world of navigating change.
Step back for a minute and reflect on something different. A client, who has just speedily and effectively outsourced the entire transactional finance operation to a third party, identified the following factors:
There was no mention of an excellent methodology! Business change is always about changing the Human Systems in our organisations. We have always known this yet we don’t know how to incorporate it into practice. Organisations are made up of free-willed human beings who decide rationally and irrationally to join new directions or ways of doing business. This is why we encounter unintended consequences, rigidity and mess in the change process.
Any genuine change agent will tell you that change is messy. We need to realise that our structured plans, while necessary stabilising mechanisms are not the reality of change as it unfolds. The key to change is successful implementation; the key to implementation lies not in project planning but in orientation to individuals and their dynamics in groups.
All too often we get involved when organisations are dealing with the aftermath of a change initiative, often following the launch of business transformation programmes supported by large consulting and strategy houses that did not live up to expectations.
These organisations were not blind to the challenges of managing change, and many had been advised on, and followed, the well-researched and respected approaches to change, for example:
In our experience, most of the approaches to change try to impose what are essentially neat, logical and structured processes and approaches on organisations, which are inherently messy and complex. Organisations have their own cultures, with patterns of doing things, which need to be respected and worked with.
Change can rarely be managed but can be navigated. It is as much an art as a science and as such most organisations need the support of skilled change practitioners who can help them plot their own change journey. Implementation of change is the key and although less ‘sexy’ than identifying bold new strategic direction execution is what delivers the business benefit. Implementation is often misunderstood. Our core proposition is that if a business is to successfully change it will need to change its culture which in turn results from a fundamental change in mindsets, habits and practices of its members. Change happens from within the everyday conversations of its people, after all, do conversations remain the same or do they change?
A successful business turnaround, reorganisation or merger demands a change in the DNA of your organisation. Mindset, behaviours, habits need to change. But the DNA is hard to spot, let alone alter because it is also your DNA too. What we mean by an organisation’s DNA is the implicit ways of working that people go along with but few openly discuss, for example:
These are often so subtle that even those in the organisation may fail to see these patterns. They then wonder why they continue to get the same results when they keep relying on the same ways of tackling problems.
When we introduce change, the underlying thinking is that when staff hears the logic they will adopt the new, see sense and come on board. The unspoken assumption is ‘we expect you to be logical and accept this argument and go along with change....’ Bob Marshak(2) has been very insightful: the more senior in the organisation the more prone to this weakness as they rely on a rational business case to drive change, he argues. This is the logical strategic argument to show how the present is untenable and the company needs to become something different. This case is announced continually and plans to change built up around it - yet we know how this is not the way it works, does it work for you?
Axelrod(3) criticises our very own DNA as change agents. The few decide for the many, he says, leading to exclusion resistance and lack of trust.
Your function at Board or Senior Executive level is to set direction. You articulate a destination and outcomes that will return value for shareholders, the WHAT of change. The message of this article is to enhance shareholder value by attending to the HOW of change by becoming a catalyst for change. Examine your own practice and provide direction beyond auditing sophisticated change management project plans submitted by senior executives, change departments or external consultants.
To discover more about our approach to and insights about organisational change, here are a couple of relevant articles:
Acclerating business change through culture transformation
As always we are keen to hear any feedback or reflections you have. Feel free to contact jenniferrees@sheppardmoscow.com personally.
Michael Nolan 
Helen Lockhart 
Aoife Keane 
