Change is an interesting and necessary process for growth in business. It describes employee focus, and indeed business operations, moving from one particular state of normality to another, completely different from the original in some integral way.

In the context of managing required workplace changes effectively, I would like to discuss how a business goes about integrating change as a critical part of its lifecycle – whereby it renews and refreshes it’s capacity to provide products or services.

Without the correct approach to change, companies can stagnate and die. The only way that a company can survive the harsh world of business is to move with the times. This can often be an extremely difficult, worrying and stressful period for those involved, but using particular techniques a company can effectively manage changes, using the situation to their advantage. In this way they can properly utilise positive effects and diminish the impact of negative feelings.

 

Breaking Down the Core Issues

There are three key ways Change Management, and those people conducting change, need to operate to effectively introduce a positive outcome for business.

 

  1. Good Change Management Means Cultural Change

Contrary to popular belief, Businesses are cultural entities and not just profit machines. This understanding is critical to effective Change Management. People take time to convince, often much longer than Senior Management expect, and there have to be champions of particular ideas that drive change. Companies need to expect that forcing people to work in particular ways without doing the initial groundwork can mean pushback.

 

Companies need to be aware that changes only stick if there is a greater narrative which supports the employees at every level. More than that, highly effective changes do not just appear in one place – they appear throughout a companies identity – making employees feel as though they are placed at the centre of a movement, rather than at the same place but now dealing with new responsibilities.

 

 

“Högertrafikomläggningen” or “H-Day” in Sweden, was the day on 3 September 1967, in which the traffic in Sweden switched from driving on the left-hand side of the road to the right.

Unlike their Scandinavian and European neighbours, Swedish horses and carts historically drove on the right, and nobody really knows why. It’s most likely that it may have originally been to do with safety; having your sword hand closest to oncoming vehicles gave you a better defence against bandits.

Fast forward to 1927 and this tradition had become extremely dangerous.

Long after the initial reason had vanished people still clung on to an antiquated way of doing things, even though they had no reason to do so. Reports showed a much higher incidence of head-on collisions, caused by people coming from other countries and not realising they were on the wrong side of the road. As such, a parliamentary bill was proposed to make the switch … and instantly rejected by the Swedish people.

While academics could readily demonstrate that the changes would increase safety, it took over 40 years to get the change approved.

Why? Because people don’t like the idea of change for its own sake; it is a scary prospect. Instead, they must be educated slowly and the change must be unequivocal.

In the case of “H-day”, the leaders, or implementers, had to instigate a range of strategies to change the cultural perception.

To do this they spent time on the change itself; four years adding to the conversion through education initiatives and constant appearance in their culture, from regular information on milk cartons to a popular song contest to act as a conduit for general acceptance. Once the change was adopted, just switching over on one day after a number of prior public announcements, everything was fine; not one person was injured or killed because of it, the number of fatalities over the following years actually dropped slightly and there was little to no long term fallout whatsoever.

The change itself was necessary, and largely felt to be the right course of action once people were properly educated and “on board”, but the process of change from the front (or from the top) has set stages that must be followed. Individuals are not readily willing to accept responsibility for the cost of the change, nor often willing to accept the benefits, until they are ready to commit to the ideas represented.

When you consider changing long-standing systems, especially those that are not directly governed, there is no single force that leads change, but those with a will to change must appeal to the sensibilities of leaders, who must then enact this same change on those they lead.

 

  1. Resisting Change – How What You Know Affects What You Do

In their book, “Immunity to Change”, Robert Kegan and Lisa Lahey, two professors at Harvard Graduate School of Education, explain that as the level of complexity involved with understanding a given scenario rises, so too does the tenancy to fight, or push back against it.

Without a way to understand why some changes are necessary, or the reasons behind particular actions, it is entirely predictable that for many people – change will be more difficult. Companies that actively choose to keep employees in the dark during changes, or who do not invest in educational programs to give people a better understanding, should expect a greater amount of resistance to change in general.

This is because of a psychological process called bounded rationality.

Bounded rationality is the idea that in decision-making, rationality of individuals is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make a decision.

In other words, decisions are driven by whatever is easiest to understand the immediate benefit from.  At a larger level, this is because things we don’t understand are programmed to cause anxious feelings, and things we do understand give us comfort. In the light of survival comfort is extremely important, and avoiding risks is equally important.

To ensure an effective change, first you must remove the negative associations people have with new and potentially dangerous elements and replace them with understandable and comfortable alternatives.

 

“It is not change that causes anxiety; it is the feeling that we are without defenses in the presence of what we see as danger that causes anxiety.”

– R. Kegan and L. Lahey: “Immunity to Change”

 

  1. Incentives Really Matter

 

One of the biggest ways companies fall down is to believe that incentives are not important to change. This follows from a misinterpretation of data from social science showing that monetary incentives can have little or no impact on performance. Indeed, in some cases that incentives can have a negative impact on performance, most notable within the creative domain.

This is only a snapshot of the story though. Specific incentives, available to anyone, can be tremendously important for change. Non specific (variable) incentives which are only available to particular individuals can be detrimental to change.

To understand how incentives work, we must quickly define some differences. There are two types of currency which can be used to incentivise employees during change management. The first is social currency – where the employee gives up their personal time for kudos or recognition. The second is monetary currency – where an employees time is valued appropriately.

Humans are social creatures and wired to adore appreciation, and likewise to abhor being treated like ‘one of many’. Using monetary currency reduces a reward to a number, and an individual to a group. In many cases a Manager simply recognising a person has put in a particular effort and then thanking them personally or thanking them for their effort in a meeting can work far better, both for that person and for persuading a group, than giving them a set amount of money.

This approach also protects relationships within a team, halting any jealousy of that individual, and stops the idea that those who do not do X will be punished as a result.

The next thing to realise about motivation is that, like decision making, it is bounded by particular features. These features are: Is my effort worthwhile and useful? Is my effort valued by the group? Can I be proud of my effort? People require a reason to continue to work when monetary incentives fail, if that reason is not there, people tend to stop working.

Dan Ariely, author of Predictably Irrational, cites this difference in a chapter called “Being Paid vs. A Friendly Favor”. He also released a paper in the Journal of Economic Behavior & Organization which looked at the impact of three specific factors on incentives.

In all three cases the work was the same – an individual was paid an amount to build a small toy which took around 10 minutes to complete. Each time they completed one, they would get paid slightly less for the next and so on. The idea was to find out how long people would work, once the monetary reward was so low that it would no longer be financially viable to do so.

In one of the studies he put the finished product on display for all too see, including the maker. In the second he hid the finished product in a box under the desk. In the final scenario the examiner handed over the money, then dismantled the toy and the individual had to create it again once they had finished the next.

The average number of completed tasks was around 30% higher in the scenario where the individuals were able to display their finished products and see the fruits of their hard work. It should be noted that in all cases the amount paid for completing the task was the same, the only change was the recognition from Management. This is a key factor when considering how, as a business, you can adopt the practices which will help your company succeed.

 

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