Leadership Challenges: Tackling Organizational Change

No business can survive the long term without change. Human nature, however, is resistant to change. The ultimate test of a good leader may well be the ability to guide change. Whether you’re a CEO dealing with corporate financial issues or a senior manager with new innovative ideas, implementing change isn’t an easy task. But John P. Kotter, retired Harvard Business School Professor and author of Harvard Business Review article “Leading Change: Why Transformation Efforts Fail,” points out that taking the right actions during this time is essential. Creating urgency, recruiting a coalition and avoiding organizational pitfalls can be the difference between either the failure or success of an organization.

Creating Organizational Urgency

In order for change to be effective, you must first create a sense of urgency. Having cooperation at all levels of an organization will provide the momentum needed to achieve the desired result. According to Kotter, over 50% of companies fail while implementing change from a lack of urgency.

A true leader must work quickly to solicit support within the organization. By examining market and competitive realities for potential crisis and untapped opportunities, leaders will be able to back up the need for change. Presenting facts like the anticipated revenue loss if the changes aren’t made or the impact of new competition in the market can help persuade others to get on board. Sometimes it may be advantageous to have an outsider such as an analyst, consultant or customer deliver the information. Whether delivered internally or by an outsider, the message that needs to be delivered is that the status quo is far more dangerous than the unknown. This message will ramp up urgency and create a more immediate requirement for change.

Forming a Team of Advocates

Once managers understand why change is needed, they must communicate the message within the organization and get others on board. Creating a “coalition” will put more force behind your efforts and provide the momentum needed to move the changes forward.

The coalition should be a group with a shared commitment and enough power to lead the transformation. The core of the group is typically made up of senior management members. Because reform generally demands activity outside of protocol, a coalition can also include board members, customers or even union leaders. The coalition should be made up of people with strong expertise, experience, reputations and relationships. The members will work together as a team to evaluate the company’s challenges and opportunities. Companies without this powerful coalition are at risk of losing momentum and getting stuck.

Once the coalition is formed, members should work closely to create a clear vision to direct the change. It will need to be more than numbers and should describe the goals and outcomes of the proposed change. The vision needs to be easy to understand and appealing, so when communicated to others, they will buy into it. This vision will eventually evolve into the strategy for the implementation of change.

Ramping up Communication

Effective communication is vital to transformation. Communication isn’t as effective when only coming from a few individuals. The corporation needs an army of people delivering the message through all existing communication channels such as emails, speeches and employee newsletters. It is also important to remember that communication comes in both words and deeds. If members of the coalition “walk the talk” and embody the new corporate culture, the message will be more credible and powerful. This will provide employees the confidence needed to get on board and devote their energy to making the change possible.

Getting Rid of Obstacles

Employees will become frustrated if the new changes have obstacles. Managers must work hard to remove any obstacles and help employees maneuver around unanticipated problems. Otherwise employees may become irritated and resistant to the changes.

Be careful of managers who don’t support the vision and become roadblocks for employees. This can create a sub-culture that is working against the changes. It can also create a “toxic” environment by building resentment between employees and upper management.

Taking Small Steps

Transformation takes time, but people want to see evidence that the changes are producing results. If this evidence isn’t presented within 12 to 24 months, people may jump ship and start to work against the required changes. Remind managers and employees about positive results that are happening because of their hard work. This should help keep the momentum in place.

While it may be tempting to celebrate at the first sign of improvement, be careful not to declare victory too soon. Doing this may actually hinder your company’s momentum and slow down progress. People that have been fighting for change will back down and lose their sense of urgency. Keeping the sense of urgency high will help your company continue to move forward.

Even for the best leaders, change is difficult to accomplish. It can’t be achieved by one person working alone. Assembling a team and keeping your momentum strong will help win over more employees and provide the energy needed to successfully implement change. As employees witness the success of the changes, even opposing employees will begin to join your team and work towards moving the company to the next stage of success. Further, your company will be able to handle shifts in the market, competitors and technology while your rivals struggle to adapt to change.

Resource:
John P. Kotter. “Leading Change: Why Transformation Efforts Fail.” The Harvard Business Review, January 2007.

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Mark Jordan is the Managing Principal of VERCOR, an investment bank that creates liquidity for middle market business owners. He is the author of “Driving Business Value in an Uncertain Economy”, “Selling Your Business the Easy Way”, “Enhancing Your Business Value…The Climb to the Top” and co-author of “The Business Sale…A Business Owner’s Most Perilous Expedition.” For more information, contact him at 770.399.9512 or click here to email Mark.