Handling Change Management Right the First Time

As business leaders rush to implement cost-saving, productivity-boosting measures to survive the recession, daily news coverage shows that very few are thinking about the unintended consequences their change management actions will have on the relationships with those they count on most. But change management in any form sends powerful messages to key stakeholders, including customers, employees, business partners and investors in terms of whom and what an organization believes are most important.

You must consider in advance not only your long-term strategy and growth path, but also who and what you’ll need to get there.

In this article, we share how business leaders can handle change management right the first time by avoiding common pitfalls, such as breaching trust with key stakeholders, taking on a “victim” versus “owner” mentality, losing sight of customer-and employee-centricity and creating critical talent deficiencies. By mobilizing mid-level managers, adapting your decision-making style and recognizing the ever-increasing importance of focused leadership, your organization can increase its chances of being among those who’ve done change management right the first time.

Building the Trust Bridge for Effective Change Management

The epidemic of low trust among workers is well documented. Just recently, for example, the 2009 Edelman Trust Barometer found that trust in U.S. business dropped to a dismal 38 percent – the lowest in the Barometer’s history, even lower than following Enron’s collapse.

For the business leader poised to make significant organizational changes, this means you are starting at a disadvantage. The majority of employees have already determined your words alone cannot be believed. Rather, they will want to see proof in the form of congruency between your words and actions before they give their support to whatever it is you’re selling. In other words, if your company is cash strapped and you’re pushing teams to drastically reduce costs quickly, employees will want to see that you too are making personal sacrifices to cut spending.

Consider the public relations fall-out when the auto executives went to Congress to ask for public funds to plug serious immediate cash shortfalls and each arrived in Washington, DC, in a separate corporate jet. To them, this was the standard course of business. But to the public, it reeked of insincerity and, thus, fanned the flames of mistrust.

While most of your decisions and actions are not quite so visible (nor dramatic) as this example, they are clear indicators to employees about what you truly believe and intend. More likely than not, you’re facing tough decisions about when and where to reduce costs. If your organization plans to go through a layoff, for example, the method chosen to select those affected – as well as the way you carry out the effort – will send a clear message to the employees left behind.

Unfortunately, many companies are not using their business process improvement teams to help construct an execution strategy and are instead resorting to last in first out (LIFO) or first in first out (FIFO) approaches. Not only does this fail to demonstrate a clear line of sight to where these leaders are taking the business, the message to employees is clear: People are costs, not assets.On the other hand, smart organizations are taking the approach of reducing unprofitable teams and keeping good players. Most importantly, they are linking their downsizing efforts to their core business strategies whenever they communicate with employees about the process.

Change management bottom line: During times of increased turmoil, every major decision is a signal to employees of your strategic intent. No matter how big or small, every decision is a chance to show the direction you are taking the organization. Without trust, the cost of sustaining relationships is steep. As trust grows in leadership, employees’ defensive postures fade and productivity soars.

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She’s the boss

Business has traditionally been and to a certain extent still is “a boy’s game”. Less than 6 per cent of executive management positions in America and European companies are held by women, and of the Fortune 500 only four have a female CEO.

Yet in Britain one in three new businesses are started up by women, and according to John Naisbitt and Patricia Auburdene, authors of “Megatrends”, since 1980 the number of self-employed women has increased twice as fast as the number of self-employed men.