The many facets of managing change
Just Google “change management models” and you will see a whole host of methodologies including John Kotter’s 8 phases, Kurt Lewin’s force field model, McKinsey’s 7S framework and the lot. All of these are extremely powerful. But it does leave one wondering how to go about. This short discussion gives an overview of just how to do it. Let’s take Kotter’s model first.
1. Establish a sense of urgency
2. Create coalition
3. Develop a clear vision
4. Share vision
5. Empower people to clear obstacles
6. Secure short-term wins
7. Consolidate and keep moving
This model is very effective because it goes to the heart of the situation – that people respond to change that is thrust upon us. There is no better impetus for change than one that has an impending “doomsday” outcome for us.
I can remember a company that I was working with to realign their strategy – let’s call them Foster Inc. For a long time, Foster was doing well, but not spectacularly. They have coasted along because they secured a couple of big contracts to fill their belly with a little bit more set aside for a rainy day. There was no real hunger in them to find more clients because they were satisfied with their level of income. But suddenly, the financial crisis in 2009 hit and their big contracts cancelled. They never expected the sheer speed and size of the revenue drop and what little they had set aside could not help them stanch the red ink. That stark reality that they may quickly go out of business forced them to quickly learn how to do things differently. Fortunately, they were able to make the shift and although they are still struggling to stay afloat, at least they have not gone under.
So the whole point about people is that we normally coast on the status quo and we do not react to change unless it is thrust upon us. All kinds of literature – and your experience will bear this out as well – has proven that people will not change unless they are forced to do so. In that sense, establishing a sense of urgency is a good starting point. Except that it isn’t. If we are not looking out for change, if we are not expecting change, if we are not sensing the shift in the economic environment, and we don’t admit that these are “life threatening”, we will not be able to create that sense of urgency. Kotter’s phases will all fall into place the minute we adopt a strategic viewpoint to create that sense of urgency; but we have seen time and time again how senior management fails to accept the changing environment and therefore create a false sense of security. Borders and HMV both couldn’t see the discontinuous effect of online shopping; Eastman Kodak was on the decline since the advent of digital photography and American Airlines didn’t see the impact of changing cost structures. So while people around them could see the writing on the wall, management could not look past their comfort zone, look beyond their past successes, to the onslaught of the change in business environment. And that caused their demise. So therefore, it might be useful to add a pre-Kotter step to managing change – adopting strategic thinking. This therefore brings me to Kurt Lewin’s force field analysis. Taking a situation, we analyse the forces that drive change and those that resist change. The key to creating change is to reduce those that resist change and strengthen those that drive change. Let’s go back to Foster and see how this was put into practical use. The drivers for change for Foster are:
lack of money
changing client needs
inability to seize on new opportunities
The drivers that resist change include
1. lack of knowledge
2. no clear product/service focus
3. fear of change
4. poor leadership
5. internal politics
The minute one looks at this, the desired end state – adopting a new strategy to survive – becomes clear with the actions also becoming more apparent. So what the company did was first it got rid of non-performing legacy employees and brought in a COO to help the CEO manage the different functions. Next it opened up a customer-focused discussion with clients, coming up with products that were targeted and specific to their needs, opening up new markets and getting higher margins. It slew a host of assumptions that held them back in terms of market development including opting to partner a major competitor to strengthen their position.
The Lewin model therefore became a pivotal starting point for organizational change at Foster. But it was not without challenges.
Internal politics was a nightmare. Apparently, the CEO wanted change but other senior managers were reluctant. Money needed to be spent but no one wanted to pony up on it. Operational systems needed to be revamped but nobody was willing to step up. In short, everyone had his or her turf to protect.
We therefore had to look at the internal situation more holistically and turned our attention to the 7S framework. Waterman and Peters developed the 7S framework in the 1980s (In Search of Excellence, 1982) to help one think strategically about the internal structures of the organisation to identify areas for change. The 7Ss refer to shared vision, structure, systems, styles, staff, skills and strategy and the framework looks at the interactions between and among these factors. Taking a layered approach to the 7S framework, we looked at how each of these factors played out at the Board level, at the Executive Level, and at Departmental level. By painstakingly painting the interconnections of the 7Ss for each level, we opened up a picture that did not bode too well for senior management; we uncovered their own hopes and fears related to the situation and the proposed change. NIMBY (not-in-my-back-yard) was a prevalent sentiment with senior management. They all shared the same vision, but they disagreed on who should do it and how. We were certainly not allowed to use their resources! So embarking on a stakeholder analysis and building a picture of who can do what and to what degree, we were able to, one-by-one, work through the different concerns until we had a shared vision and a commitment for the way forward. This also resulted in the hiring of the COO to manage these interconnections better. So, we now propose a stronger change management protocol: Scan the environment and identify the new strategic intentUnderstand organisational interconnections using the 7S modelUncover drivers and hindrances using Lewin’s Force Field AnalysisOvercome resistance and get buy-in for shared vision using stakeholder analysisImplement change using Kotter’s model To this end, we want to add our 10-Step Strategic Change Model in place of the Kotter model. The 10 steps are:
Define vision & objective
Identify critical success factors, key result indicators and key performance indicators
Develop the case for change
Analyse stakeholder intent
Get management support/ approval
Define the project charter
Create communication plan
Design new/updated performance management system
In-scale quick wins
Review for continuous improvement
To a large extent, there is great alignment between the Kotter model and ours. Ultimately, they both map out the key deliverables for getting change to happen. But either of these is the ultimate step in making change happen. If you want it to be successful, the preceding steps above are necessary.