Major change in an organization, especially transformational change, demands that people change personally—how they think, how they behave, and how they alter their ways of working that the transformation requires to sustain its value to the business. Executives must understand the leadership behaviors required of them. Stakeholders will look to the executives to see, or more likely to test, if the change is real for their leaders. So, the first person who must demonstrate the validity of the change is you, as CEO!
Large, complex change – especially transformational change – impacts people and processes across boundaries (boundaries of role, function, process, and organization). Organizational transformation demands cross-boundary support among your top executives; this support is a non-negotiable requirement of success.
As CEO, it is your job to create alignment, commitment, and support in your top executive team to ensure they are individually and collectively doing all that is necessary to make your company transformation successful. This is key to your role as the sponsor of this level of change.
Your organization has embarked on a new venture which is going to require a lot of change. Of course everyone is hoping for the best – but please allow me to be frank with you now, to save you a lot of heartache, time, and money in your near future.
Here is a troubling fact directly impacting the success of change: The people most affected by changes in their organization are not asked what they think will work best to achieve what the organization needs. Many leaders don’t consider asking for input from target group stakeholders when designing or implementing changes.
Virtually all core functions in organizations are operated as strategic disciplines (e.g., finance, supply chain, marketing and sales, human resources, IT). This means they have consistent practices and protocols, common ways of making decisions and managing information. These disciplines are crucial to having the business function optimally, and reliably, to be able to deliver results.
Leaders of change initiatives often use strategies for change that announce, mandate, threaten, pressure, or expect people to change because the leaders say so. As a strategy to motivate employees, this does not work, people will likely resist or rebel. Or they may make it look like they are going along and then revert to their old ways. Outside-in change strategies, such as executive mandates, top-down communications, or forcefully imposing new practices cause resistance, fear, and anxiety for people. These conditions do not leave people wanting to change or able to change effectively.
One of the costliest mistakes in leading change is for leaders to ask something of the people in their organization and then not do it themselves. Walking the talk of change is not just a nice phrase; it has teeth! Organizational change, especially when it is transformational, sticks to the degree that leaders model it. In transformational change, the “Go change them!” (“and not me mandate!”) just won’t fly.
Research shows that over 60% of transformational change initiatives fail.1 Not adequately addressing culture is one of the primary reasons why. Transformational change often fails because leaders under-attend to their organization’s culture or are not successful in shifting their old culture. Either of these can prevent the desired state from taking hold.
Adoption of a change initiative can be blocked by staunch cultural norms. If leaders see change as strictly “organizational,” and ignore the human and cultural dimensions, it is a recipe for failure. As Jim Collins, author of “Built to Last” and “Good to Great”said, “Culture eats strategy for breakfast!” Sadly, multimillion dollar technology installations often don’t deliver their intended ROI because the people (culture) do not embrace the new ways of working that the technology demands.
We have surveyed thousands of leaders and managers about their key risk factors in leading change. By far, having adequate capacity for change is their number one issue. Most report that they have too much change going on and no capacity to lead or execute it successfully. Often, the need to create capacity for change is not even on leaders’ radar. Without adequate capacity, change will fail.
One of the most important variables in leading transformational change initiatives is having an accurate scope of change—what needs to change and how big is the impact. When change leaders can’t see all the implications of what they are asking of the organization, it is common that the scope they identify is too small or only addresses the formal content of the change and leaves out the people dynamics essential to success. Both are essential to plan, resource, and support.
What is a Case for Change?
When you initiate a change in your organization, your stakeholders and leaders will have questions about what is changing, why it is needed, the scope of the change, its urgency, outcomes, etc. Great change leadership starts with your case for change. Your case for change answers these questions so your impacted stakeholders and leaders can understand the purpose for the change initiative.
Change initiatives need the same clear and thoughtful governance as your organization’s operations. It may seem obvious that establishing change governance is important for a change initiative to be successful, but planning for it is often skipped in the rush to get started. Leaders may press for a plan of action that does not include effective governance to get a solution designed and deployed as quickly as possible. This is faulty thinking! Effective governance must be created from the very beginning to enable speed, efficiency, and effectiveness in designing and executing change.