Before identifying the core principles of change management, it is worth defining what the term means. Put simply, it is all about the processes, tools and management steps that leaders take to promote and succeed in making strategic changes within any organisation.
These transformations aren’t always large in scale. They could simply be the creation of a new team, or a much larger undertaking like the implementation of a new IT system. But, no matter how complex or simplistic a task may appear, if those in charge do not manage the process properly, even the smallest alteration to how an organisation functions can become major hiccup that could derail it.
Identifying the problem
It may seem a little basic, but before doing anything an organisation must identify what exactly needs changing. One man that came up with an ingeniously simple method for identifying problems was Taiichi Ohno, who pioneered the Toyota Production System in the 1950s. He once famously said that ‘having no problems is the biggest problem of all’, with Ohno believing that kaizen (continuous improvement) is merely an ‘opportunity in disguise’.
This perspective on problem solving led him to create what is more commonly referred to as the ‘five whys’. Whenever something at the Toyota factory didn’t work to its optimum he encouraged his team to ask why, leading to at least four more questions to spring from that initial one, which would inevitably help him get to the root of the problem. According to Toyota, Ohno used the example of a welding robot that had stopped working to show how his method of deduction can identify what must be changed for true transformation to occur.
- ‘Why did the robot stop?’ – The circuit has overloaded, causing a fuse to blow.
- ‘Why is the circuit overloaded?’ – There was insufficient lubrication on the bearings, so they locked up.
- ‘Why was there insufficient lubrication on the bearings?’ –The oil pump on the robot is not circulating sufficient oil.
- ‘Why is the pump not circulating sufficient oil?’ – The pump intake is clogged with metal shavings.
- ‘Why is the intake clogged with metal shavings?’ – Because there is no filter on the pump.
This process of deduction is simple, yet so easily adaptable to any business and is a handy tool for change management leaders to use to quickly and effectively to identify the biggest problems that need solving. In fact, Ohno’s method is so good that Toyota still uses it today.
“These days, the global auto market is in a continual state of flux…Whenever a problem arises — whether it be in the factory or on the sales floor — we should follow Ohno’s advice: go directly to the source and keep asking, ‘Why?’”
Communication is key
Arguably one of the most important, yet inherently difficult things to get right in the change management process is managing the people that will ultimately bring about the transformation you seek. If the person in charge of overseeing a major overhaul is unable to get everyone onboard with the process, then it will undoubtedly fail. It is essential to have the approval of the whole team too, not just those at the top. Everyone from senior management to entry level employees must be behind the plan, because without their combined support for change it simply won’t happen.
For change to foster and flourish within any organisation it is important that those in charge of the process ensure that all stakeholders affected by it fully understand what will happen and how they, on an individual level, will be impacted. What’s more is essential that individuals feel a part of the process, rather than on the outside looking in. One of the quickest ways to build resistance towards change is to keep people out of the loop, as for many, when they hear about any shake-up, the first thing they tend to worry about is if their job is safe. Therefore, it is an imperative for leaders to identify key stakeholders across the organisation, including heads of various departments, senior management and other influential staff members and brief them effectively.
Identifying key stakeholders is also useful in building a change management team. After all, overhauling an organisation is a mammoth task and one that cannot be accomplished alone. And, who better to help bring about change than those that already have a broad understanding of the organisation and the people that comprise it. In other words, these leaders understand the organisation’s culture. By having a 360 view of an organisation’s culture will minimise resistance to change and ensure that the transformation is a success.
Another key principle for change management to be a success is transparency. News of any change will spread like wildfire through any organisation, so it is important that information about any overhaul comes straight from the horse’s mouth, rather than allowing hearsay to disseminate the details. Holding meetings with stakeholders prior to the change management process kicking into full gear is a must.
Regular meetings are also useful for detailing the change management process clearly to relevant stakeholders too. It’s important that employees understand what the problem is, so it is apparent to them why change is required, as well as step-by-step instructions on how to implement it.
All this may seem rather pedestrian, but according to a study by Leadership IQ, only about 35% of people in charge of the change management process ‘actively’ explain the challenges facing an organisation and why it is essential to address them. But most leaders avoid transparency for a several reasons, according the founder of Leadership IQ Mark Murphey.
“It can significantly undermine a leader’s credibility if their employees think they’re just making up change initiatives willy-nilly,” he explains. “Even though the leader probably has all sorts of great reasons to launch this change, if they don’t share those reasons with employees, it’s as though those reasons don’t even exist.
“There are lots of ways for leaders to share the challenges. But regardless of whether you do it town halls, webinars, newsletters, or staff meetings, what’s most important is that you openly share,” he added. “The more you share the challenges coming down the road, the more you prevent employees from getting complacent and wedded to the status quo.”
Change never comes easy
Despite how simple many of the key principles of change management may appear, transforming any organisation is never a walk in the park. There are countless examples of companies failing in the face of change – even companies that have a strong track record of transforming themselves. But what makes great companies so bad at change?
According to Donald Sull, a global expert on strategy execution and a senior lecturer at the MIT Sloan School of Management, the problem is a thing he likes to call ‘active inertia’, which can be defined as an organisation’s proclivity to solve new problems in the same it they resolved past issues. In an article published in the Harvard Business Review, he explains how US tyre manufacturer Firestone became a victim of active inertia and of its own success back in the 1970s.
“Firestone’s long-standing success gave the company a strong, unified sense of its strategies and values, its relationships with customers and employees, and its operating and investment processes,” he wrote. “The company had, in short, a clear formula for success, which had served it well since the turn of the century.
“Then, almost overnight, everything changed. A French company, Michelin, introduced the radial tire to the US market. Based on a breakthrough in design, radials were safer, longer-lasting, and more economical than traditional bias tires,” he added. “They had already come to dominate European markets, and when Ford declared in 1972 that all its new cars would have radials, it was clear that they would dominate the US market, too.”
Despite the US tyre maker taking action in a bid to maintain market share; investing millions into creating its own radial tyres and ramping up production, it was not enough to keep pace with its French rival and by the late-70s the company was on the brink of folding.
The root cause of the company’s demise, which its management team failed to see, was that it was up against a strong rival with a revolutionary product that required Firestone to redesign and reimagine its entire production process, rather than just tampering with it. In the end, the business lost its grip on the US market and was eventually acquired by Japanese rival Bridgestone in 1988.
Active inertia took hold at Firestone, as it does at many successful organisations, prompting its leaders to refine and double-down on the long-established processes and strategies that had made it a market leader in the hopes that its winning formula will once again come out on top. But sometimes organisations must ditch their devotion to the status quo and its leaders must embrace real change to create new winning formula if it is to keep pace.