Sometimes the hardest sale isn’t to customers, it is to firm employees. Firm leadership is as much about change management as it is practice management. Thriving firms do a wonderful job of “selling” sustainable change. Learn how they do it.
Why is it that some firms quickly adapt to changing business dynamics and others make little progress? Think about the efforts you have seen fail over the years or the ones that took YEARS to materialize: a new software launch, paperless project management, sustainable design and construction, ownership transitions, geographic expansion, new service launch, 3D modeling, etc. More ideas get talked about than implemented. There is a reason why.
It is important to understand how people respond to change in order to sustain positive change at our firms. In his book Diffusion of Innovations, the late Everett Rogers introduced a bell-shaped curve to explain the way people accept new technology:
n Inventors, about 3% of the population, come up with new technologies.
n Early Adopters, 14% of the population, are the first to buy. You know them: the ones who had iPods and high-definition TV before most of the population knew about it. They talk things up, and the people who respect their judgment jump on board, too. These people are called the Early Majority and represent about a third of the population. The Late Majority, another third, adopt technologies only after their use is well established.
n The last to accept change are the Laggards. They are the 16% of the population who are the last to buy cell phones or digital cameras. They still write checks and have no motivation to use electronic payments. They tend to be traditionalists, in love with the past.
People in all four categories work in your firm. Knowing this, it should be no surprise that all your firm’s employees don’t accept change with the same enthusiasm at the same time.
Learning to Adjust
In his book Leading Change, John Kotter estimated that 85% of company change efforts fail, especially those that concern corporate culture. Customer relationship management (CRM), team-building efforts, and ISO quality certifications fall into this category. Kotter studied firm change dynamics and put people into four categories:
n Advocates strongly support the change and push to get it implemented. You know the type, the people who attend a conference and rush back to the office proclaiming, “We have to do this NOW!”
n Incubators understand the change but are sitting on the fence waiting to see if it will stick. Over the years, they have seen many valid ideas fade, and won’t get excited unless they are convinced of its staying power.
n Apathetics don't know a lot about the change, haven’t heard anything about it, or don’t believe it has anything to do with their job.
n And then there are the Resisters who actively block change or firm progress.
What's the key to winning acceptance? It's how the change is sold, not whether or not the change is valid.
According to George Smart, Managing Partner, Strategic Development, organizations typically employ seven strategies, in various combinations, to promote change. They are not equally effective.
First, what doesn't work: Research tells us that an over-reliance on mass communication is the quickest road to failure. Yes, it is cheap and fast to send a companywide e-mail, explaining WHY the change is necessary. The hope is that solid logic will be persuasive. This is the least effective way to promote sustainable change.
By contrast, change is much more likely to stick when executives become Early Adopters themselves, and when they encourage dialogue and questions. Such clear commitment and open communication promote understanding, which smoothes and accelerates implementation.
And because personal selling is so effective, it can pay to have Advocates “talk up” the program – even to hire new employees who are already Advocates. But this route has serious pitfalls: It is expensive to hire new employees and a disincentive to employees who have been loyal to your firm (especially if a new employee has a higher title and makes more money). Hiring to hasten change requires the greatest care.
It's tempting to hire Advocates – and even more tempting to terminate Resisters, especially early on. But don’t rush to judgment unless their behavior is truly unacceptable. Instead, listen to them, and take steps to remove the roadblocks they voice. That in turn will convert more employees to Advocates. A year down the road, if a Resister is still sabotaging change, termination becomes a constructive option, actually motivating to the organization.
And, of course, support the plan financially and philosophically. When firm leaders preach change but do not fund it, employees see quickly that it won’t stick. If it is truly important, commit the funds to make it happen. Further, align employee performance appraisals, bonus structure and recognition to support the change. When instituting change, pay special attention to this reward structure. The desired change needs to be part of pay for performance formula.
But don't abandon your old pay for performance model indiscriminately. Success under the new system shouldn't be the sole determinant for a raise or bonus. Do not forget to reward current performance goals along with new change initiatives.
Reward the behavior and the results you want. For example, it would be foolish to promote regional geographic expansion as a firm change initiative and then only reward new sales in your home state. Think seriously about disincentives that block implementation. Research proves people are twice as sensitive to loss than to gain.
And don't throw out other important initiatives in the process of implementing change. Be aware there is a point of no return. You can’t keep adding more to the plate and expect great results. Ask yourself if there is really room for another corporate project without stopping anything else. Assess your resources before expecting more from your people who may be working at capacity.
Goal: Make the Change Stick
Thriving companies understand that the key is to convince employees that the change will stick, not whether or not the change is valid. And keep in mind that not all change promotional strategies are equal. While there is no magic bullet, the faster you can gain Advocates, the faster the tipping point will occur.