Changing Change Management
“Change is hard.” People say that all the time. Big change, small change. And it's true. Change is hard. But, it is also something that is constant. Particularly in health care. Particularly right now. The Centers for Medicare and Medicaid Services (CMS) – the principle driver of health care reform in the US – has well over 20 initiatives currently underway through the Innovation Center, in addition to major regulatory changes, such as the recently finalized Quality Payment Program.
For the past thirty years, professionals from all walks of life - from academics to consultants - have studied the subject of change.
They’ve sung the praises of leaders who communicate vision and walk the talk in order to make change efforts succeed. They’ve sanctified the importance of changing organizational culture and employees’ attitudes. They’ve teased out the tensions between top-down transformation efforts and participatory approaches to change. And they’ve exhorted companies to launch campaigns that appeal to people’s hearts and minds. Still, studies show that in most organizations, two out of three transformation initiatives fail. The more things change, the more they stay the same.
But it doesn't have to be that way.
Change management – a phrase often used and just as often ignored – is a systematic approach to assure that any change is designed, implemented, and operationalized in a way that will result in long-term sustainability. Change management is necessary to address the inherent conflict present in any kind of change. Through proper change management stakeholders can be made to see change as an advantage, rather than a loss.
Change management is not easy to do though. It takes an effective, dedicated management team with the necessary knowledge, credibility, leadership, and management skills, as well as an impartial facilitator to guide discussions and assure that all stakeholders are heard. There are a number of change management models that can be used, including Kurt Lewin’s three-step change model and John Kotter’s 8-step approach. While no one model is perfect, identifying a model to use is a key first step in the process. A change management model gives you a plan to follow. With the right amount of flexibility, based on circumstances, experience, and observations, the change management model can be effectively used to guide the process to a positive outcome.
But to be successful, it also takes an understanding of the "hard factors" of change.
Experts agree that these hard factors share three common characteristics: they're measurable, they're easily communicated, and they can be influenced quickly. And, when taken into account, they are a key predictor of whether an organization's change will succeed.
The clients that we have worked with and many consultants will tell you that an enthusiasm gap means that shorter change initiatives have a greater chance of success than longer initiatives. Research shows that a longer project that is reviewed frequently is more likely to succeed than a short project that isn't reviewed frequently.
From the Harvard Business Review:
Companies should formally review transformation projects at least bimonthly since, in our experience, the probability that change initiatives will run into trouble rises exponentially when the time between reviews exceeds eight weeks. Whether reviews should be scheduled even more frequently depends on how long executives feel the project can carry on without going off track. Complex projects should be reviewed fortnightly; more familiar or straightforward initiatives can be assessed every six to eight weeks.
Scheduling milestones and assessing their impact are the best way by which executives can review the execution of projects, identify gaps, and spot new risks. The most effective milestones are those that describe major actions or achievements rather than day-to-day activities. They must enable senior executives and project sponsors to confirm that the project has made progress since the last review took place. Good milestones encompass a number of tasks that teams must complete. For example, describing a particular milestone as “Consultations with Stakeholders Completed” is more effective than “Consult Stakeholders” because it represents an achievement and shows that the project has made headway. Moreover, it suggests that several activities were completed—identifying stakeholders, assessing their needs, and talking to them about the project. When a milestone looks as though it won’t be reached on time, the project team must try to understand why, take corrective actions, and learn from the experience to prevent problems from recurring.
Review of such a milestone—what we refer to as a “learning milestone”—isn’t an impromptu assessment of the Monday-morning kind. It should be a formal occasion during which senior-management sponsors and the project team evaluate the latter’s performance on all the dimensions that have a bearing on success and failure. The team must provide a concise report of its progress, and members and sponsors must check if the team is on track to complete, or has finished all the tasks to deliver, the milestone. They should also determine whether achieving the milestone has had the desired effect on the company; discuss the problems the team faced in reaching the milestone; and determine how that accomplishment will affect the next phase of the project. Sponsors and team members must have the power to address weaknesses. When necessary, they should alter processes, agree to push for more or different resources, or suggest a new direction. At these meetings, senior executives must pay special attention to the dynamics within teams, changes in the organization’s perceptions about the initiative, and communications from the top.
By performance integrity, we mean the extent to which companies can rely on teams of managers, supervisors, and staff to execute change projects successfully. There's always a fear that if the stars of the team are asked to move focus to change programs, their regular day-to-day work will suffer. But when you look at the companies who have succeeded in implementing change, research shows that employees "go the extra mile to ensure their day-to-day work gets done."
Since project teams handle a wide range of activities, resources, pressures, external stimuli, and unforeseen obstacles, they must be cohesive and well led. It’s not enough for senior executives to ask people at the watercooler if a project team is doing well; they must clarify members’ roles, commitments, and accountability. They must choose the team leader and, most important, work out the team’s composition.
Smart executive sponsors, we find, are very inclusive when picking teams. They identify talent by soliciting names from key colleagues, including human resource managers; by circulating criteria they have drawn up; and by looking for top performers in all functions. While they accept volunteers, they take care not to choose only supporters of the change initiative. Senior executives personally interview people so that they can construct the right portfolio of skills, knowledge, and social networks. They also decide if potential team members should commit all their time to the project; if not, they must ask them to allocate specific days or times of the day to the initiative. Top management makes public the parameters on which it will judge the team’s performance and how that evaluation fits into the company’s regular appraisal process. Once the project gets under way, sponsors must measure the cohesion of teams by administering confidential surveys to solicit members’ opinions.
Executives often make the mistake of assuming that because someone is a good, well-liked manager, he or she will also make a decent team leader. That sounds reasonable, but effective managers of the status quo aren’t necessarily good at changing organizations. Usually, good team leaders have problem-solving skills, are results oriented, are methodical in their approach but tolerate ambiguity, are organizationally savvy, are willing to accept responsibility for decisions, and while being highly motivated, don’t crave the limelight. A CEO who successfully led two major transformation projects in the past ten years used these six criteria to quiz senior executives about the caliber of nominees for project teams. The top management team rejected one in three candidates, on average, before finalizing the teams.
To navigate change successfully, an organization must have commitment from the top down. That means not just getting buy-in from organizational leadership, but working hard for consensus and enthusiasm of those individuals who will have to deal with change daily in their jobs.
Top-level commitment is vital to engendering commitment from those at the coal face. If employees don’t see that the company’s leadership is backing a project, they’re unlikely to change. No amount of top-level support is too much. In 1999, when we were working with the CEO of a consumer products company, he told us that he was doing much more than necessary to display his support for a nettlesome project. When we talked to line managers, they said that the CEO had extended very little backing for the project. They felt that if he wanted the project to succeed, he would have to support it more visibly! A rule of thumb: When you feel that you are talking up a change initiative at least three times more than you need to, your managers will feel that you are backing the transformation.
Sometimes, senior executives are reluctant to back initiatives. That’s understandable; they’re often bringing about changes that may negatively affect employees’ jobs and lives. However, if senior executives do not communicate the need for change, and what it means for employees, they endanger their projects’ success. In one financial services firm, top management’s commitment to a program that would improve cycle times, reduce errors, and slash costs was low because it entailed layoffs. Senior executives found it gut-wrenching to talk about layoffs in an organization that had prided itself on being a place where good people could find lifetime employment. However, the CEO realized that he needed to tackle the thorny issues around the layoffs to get the project implemented on schedule. He tapped a senior company veteran to organize a series of speeches and meetings in order to provide consistent explanations for the layoffs, the timing, the consequences for job security, and so on. He also appointed a well-respected general manager to lead the change program. Those actions reassured employees that the organization would tackle the layoffs in a professional and humane fashion.
Companies often underestimate the role that managers and staff play in transformation efforts. By communicating with them too late or inconsistently, senior executives end up alienating the people who are most affected by the changes. It’s surprising how often something senior executives believe is a good thing is seen by staff as a bad thing, or a message that senior executives think is perfectly clear is misunderstood. That usually happens when senior executives articulate subtly different versions of critical messages. For instance, in one company that applied the DICE framework, scores for a project showed a low degree of staff commitment. It turned out that these employees had become confused, even distrustful, because one senior manager had said, “Layoffs will not occur,” while another had said, “They are not expected to occur.”
Organizations also underestimate their ability to build staff support. A simple effort to reach out to employees can turn them into champions of new ideas. For example, in the 1990s, a major American energy producer was unable to get the support of mid-level managers, supervisors, and workers for a productivity improvement program. After trying several times, the company’s senior executives decided to hold a series of one-on-one conversations with mid-level managers in a last-ditch effort to win them over. The conversations focused on the program’s objectives, its impact on employees, and why the organization might not be able to survive without the changes. Partly because of the straight talk, the initiative gained some momentum. This allowed a project team to demonstrate a series of quick wins, which gave the initiative a new lease on life.
We've all been in a situation where a boss or leader has asked us to take on additional responsibilities without truly understanding our current responsibilities. It should come as no surprise that according to staffing tables, people in many businesses work 80-plus-hour weeks. So it should also come as no surprise that when faced with more work without an effort on the boss' part to understand current workload, employees resist change.
Project teams must calculate how much work employees will have to do beyond their existing responsibilities to change over to new processes. Ideally, no one’s workload should increase more than 10%. Go beyond that, and the initiative will probably run into trouble. Resources will become overstretched and compromise either the change program or normal operations. Employee morale will fall, and conflict may arise between teams and line staff. To minimize the dangers, project managers should use a simple metric like the percentage increase in effort the employees who must cope with the new ways feel they must contribute. They should also check if the additional effort they have demanded comes on top of heavy workloads and if employees are likely to resist the project because it will demand more of their scarce time.
Companies must decide whether to take away some of the regular work of employees who will play key roles in the transformation project. Companies can start by ridding these employees of discretionary or nonessential responsibilities. In addition, firms should review all the other projects in the operating plan and assess which ones are critical for the change effort. At one company, the project steering committee delayed or restructured 120 out of 250 subprojects so that some line managers could focus on top-priority projects. Another way to relieve pressure is for the company to bring in temporary workers, like retired managers, to carry out routine activities or to outsource current processes until the changeover is complete. Handing off routine work or delaying projects is costly and time-consuming, so companies need to think through such issues before kicking off transformation efforts.
Whether an organization is implementing a small process change or undergoing significant reorganization, consistently and effectively deploying the elements of change management with a focus on these four "hard factors" will lead to a positive experience and outcome for all stakeholders and prevent or mitigate the outcomes of poorly managed change, including high rates of turnover and poor employee performance.
It's possible, but you must do the work.