4 Tips for Managing Organizational Change

By Matt Dallisson, 27/09/2019

Launching major transformation efforts is a common way business leaders try to get a leg up on the competition or just to keep their heads above water. But too many of these efforts fail. Change is difficult and many will not only resist it, but seek to undermine it. Unsurprisingly then, a McKinsey study found that merely 26 percent of transformation initiatives succeed. Most successful transformations have one thing in common: change is driven through empowerment, not mandated from the top.

In my research of transformative political revolutions, social movements, and organizational change, successful efforts not only identify resistance from the start, they make plans to effectively overcome those who oppose transformation. Not through bribes, coercion, shaming or cajoling, but instead by enabling others within their organizations to drive change themselves. Here’s how they do it.

Start with a small group. Typically, leaders launch transformation efforts with a large kickoff. It makes sense. They want to build momentum early by communicating objectives clearly. This can be effective if a ready consensus already exists around the initiative. Yet if the desired change is truly transformational, it is likely to encounter fierce opposition; inertia can be a powerful force, even more powerful than hope or fear. So starting with a large communication campaign, essentially presenting the initiative as a fait accompli, you are very likely to harden opposition by those who are skeptical about the change.

Most successful transformations begin with small groups, loosely connected, but united by a shared purpose, who are already enthusiastic about the initiative, but are willing to test assumptions and — later — recruit their peers. Leaders can give voice to that shared purpose and help those small groups connect, but the convincing has to be done on the ground. Unless people feel they own they effort, it’s not likely to go very far. For example, when Wyeth Pharmaceuticals set out to drive a major transformation to adopt lean manufacturing practices it began with just a few groups at a few factories. Nevertheless, the effort soon spread to thousands of employees across more than a dozen sites and cut costs by 25 percent.

Identify a keystone change. Every change effort begins with some kind of grievance: costs need to be cut, customers better served, employees more engaged, or some other issue needs to be resolved. Wise managers transform that grievance into a “vision for tomorrow” that will not only address that grievance, but move the organization forward and create a better future. This vision, however, is rarely achievable all at once. Most significant problems have multiple, interconnected root causes, so trying to achieve an ambitious vision all at once is more likely to devolve into a five-year death march to oblivion than it is to achieve results. That’s why it’s crucial to start with a keystone change, which represents a clear and tangible goal, involves multiple stakeholders and paves the way for bigger changes down the road.

That gap between aspiration and practical reality was the challenge that Barry Libenson encountered when he arrived at Experian as CEO in 2015. In his conversations with customers, it became clear that what they most wanted from his company was access to real-time data. Yet to deliver that, he would have to move from his traditional infrastructure to the cloud, an initiative that raised serious concerns about security and reliability. He began by developing methods for accessing real-time data for internal use rather than going straight to customer-facing features. That required his team to engage many of the same stakeholders and develop many of the same processes as a full shift to the cloud and allowed him to show some early results.

“Once we developed some internal APIs, people could see that there was vast potential and we gained some momentum,” Libenson told me. Experian was not only able to successfully move to the cloud, but also to launch its Ascend platform based on the new infrastructure, which is now the fastest growing part of its business.

Network the movement. All too often, we associate any large-scale change with a single charismatic leader. The civil rights and Indian independence movements will always be associated Martin Luther King Jr. and Mohandas Gandhi, respectively. In much the same way, turnarounds at major companies like IBM and Alcoa are credited to their CEOs, Lou Gerstner and Paul O’Neill.

The truth is more complex. Martin Luther King Jr., for example, was just one of the “big six” of civil rights. Gerstner gained allies by refocusing the company around customers, O’Neil won over labor unions by making a serious commitment to workplace safety. That’s why in Leaders: Myth and Reality, General Stanley McChrystal defines effective leadership as “a complex system of relationships between leaders and followers, in a particular context, that provides meaning to its members.”

Every large scale change requires not just leadership at the top, but the widening and deepening of connections through wooing—not coercing– an ecosystem of stakeholders.

Consider the case of Talia Milgrom-Elcott and 100Kin10. When she set out to start a movement to recruit and retain 100,000 STEM teachers in ten years, she knew that there was no shortage of capable groups working to improve education. In fact, she had worked with many people building myriad approaches to this same issue. But they had never met one another. And so instead she created a platform for collaboration that brings together nearly 300 partner organizations to work together through conferences, working groups, and networking. Today, 100Kin10 is ahead of schedule to meet its goal.

Surviving victory. Often the most dangerous part of any transformation effort is when the initial goals have been met. That’s why successful transformation leaders focus not only on immediate goals, but also on the process of change itself. If Wyeth had stopped at a 25 percent cost reduction it would have soon found itself in trouble again, but because its employees embraced the lean manufacturing methods it introduced, the company was able to keep moving forward. In much the same way, if Experian had been satisfied with merely shifting to a new technology infrastructure, little would have been gained.

In some cases, the benefits of a successful transformation can last not only for years, but decades. Remembering Gerstner’s IBM turnaround in the ‘90s, one of his top lieutenants, Irving Wladawsky-Berger, told me, “Because the transformation was about values first and technology second, we were able to continue to embrace those values as the technology and marketplace continued to evolve.” After a near-death experience, the company remains profitable today.