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The Need For Organizational Change

Organizational transition, transformation, turn around.  There are many euphemisms to describe the act of changing an organization.  What do they mean?  It is popular for people to describe themselves as “change agents” but they are usually referring to some very clever ideas they’ve implemented in existing organizations to increase value incrementally.  This is evolution, to be sure, but real change happens when an organization’s activities are no longer worth the cost and must change.  There are so many different causes for organizational change.  External competition can commoditize or devalue existing products, economic conditions can become intense enough to demand for reining in costs,  or simply that complacency sets into organizations that have had some success and are “resting on their laurels”.  70% of organizational change efforts fail, says author John Kotter.  There are a few axioms to follow that will create a foundation for leaders to guide real change.  The problem has to be discovered and then crisply articulated, the problem definition must convey a suitable level of urgency, and it must define the organizational end state.  People need to feel they understand where they’re going and why.

One of the greatest difficulties in accomplishing organizational change is that the people have been toiling away in their current roles for some time, sometimes for years. They come to work everyday knowing that their work brings value and they know exactly what needs doing. These tasks brought success in the past. If you’ve been tasked to lead some kind of organizational change you’ll have to define the new direction. Talk to customers, both internal and external, and understand what they will value. You need to bring perspectives from outside of the organization to be able to define real value.

In my last job I created a list of specific questions and interviewed all of my major stakeholders by phrasing the questions in the exact same way each time so that the responses would be easily comparable. I asked: what they thought the organizational charter was today? What should it be? What are the most important deliverables? What are the biggest challenges? What are the biggest shortcomings? and, what are the opportunities for growth? These questions acknowledged that what we did might not be what we should do and opened the dialog for the stakeholders to provide input on what they valued.

Once business requirements are established from outside of the organization, start talking about them with the team. People within the organization will probably not realize that there is a problem so this communication will be crucial. Make sure that it is simple and crisp. If you can’t repeat it from memory its not simple enough. The goal is to create a message that can be repeated by every member of the team at every level. Most won’t believe it yet but make sure it comes from customers that they value and explain where it came from. Be very cautious to avoid clichés. Terms like “paradigm” and “synergy” will become hallway jokes and fodder for people who resist change. Use plain words that are unambiguous and describe real deliverables. If you can’t explain it to a teenager in a way that they understand, you didn’t do it well.

Once your message has been crafted and the customer base is aligned with the changes that need to take place, its time to bring the team in. The individual team members must be invited to help define their future or they will feel out of control. The organization is probably full of very talented and motivated people who need to understand they’re valued and that their input is required for success. If the team helps craft the solution it will be easier to manage performance relating to the defined outputs than if it were just dictated. Next week I’ll put together something on “draining the swamp”, which is letting the team express their feelings about the needed changes and get them to start thinking about how they can realize their full potential.

1 comment to The Need For Organizational Change

  • Devin

    My friend found these great statistics that seem to be related to this subject:

    Vision: Only 5% of the employees understand their corporate strategy (1)

    Management: 85% of executive teams spend less than one hour per month on strategy issues (1)

    Metrics: 92% of organizations do not report on lead performance indicators. (1)

    Financial: 60% of orgs don’t link their financial budgets to strategic priorities (2)

    Incentives: Compensation packages of 90% of frontline employees show no connection to strategy outcomes (2)

    1. DeLisi, Peter S. “Strategy Execution: an Oxymoron or a powerful Formula for Corporate Success?” Organizational Synergiesl
    2. Kaplan, Robert S. and Norton, David P. “The Office of Strategy Management”, Harvard Business Review, Oct 2005.

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