Managing Change

One of the key issues facing business owners and anyone involved in turnaround management consulting is managing change. This article looks at the barriers to change and how turnaround firms go about the processes of change management.

Once you have set your business objectives, you have decided what changes are needed. Is this enough? Will the changes simply happen? Or not? The answer is that unless you make them happen, there will be no changes. And making changes happen can be difficult because there can be many barriers to overcome with your staff. These barriers to change tend to break down into the following major categories of problem, each of which is due to a different issue or issues and therefore require a different approach to the solution:

In many cases of course a situation may involve a combination of problems which will in turn mean that a combination of solutions will be needed. Successful change management projects tend to require commitment to a strong programme of communication directed at dealing with each underlying problem; detailed project management to see the project through to conclusion; and a focus on staff motivation. Much of what we do at work from day to day, and how we do it, becomes a habit and existing habits are hard to break. Making changes happen in how a business operates involves applying effort to overcome often deep-seated resistance to change, in order to break out of existing ways of doing things to create new healthier habits. If you want to promote change, then the most effective way to do so is to use the pressure of external events as a lever to ‘unfreeze’ existing behaviour. This then gives you an opportunity to introduce the new behaviours that you will want to refreeze as the new habits of working that you want to have in place. Staff can however be extremely reluctant to change for a wide variety of reasons which can include:

• Psychological – uncertainty, fear, disorientation (so change needs to be as swift as possible to avoid nagging doubt, but slow enough to bring everyone with it)
• Personal attitudes and beliefs – ‘we cannot deliberately under quote in the initial stages of an assignment (like everyone else in the industry does) to get the work as it just isn’t right’
• Group loyalty – the sales team may fight like cats and dogs amongst themselves, but just watch them stick together if you try and put production in charge
• Habit – ‘but we’ve always done it this way’
• Politics – ‘not if Joe is going to be in charge’
• Physiological – the new roster of 20 consecutive night shifts is unacceptable

To unfreeze existing behaviour you therefore often need the heat of external pressure (a ‘burning platform’) before people will realise the need to move to a new position. So as one of President Obama’s advisors famously said, ‘Never waste a good crisis.’ But you cannot simply rely on external forces to provide sufficient pressures as few of your staff will have a real immediate appreciation of your position. You will therefore also need to signal major change by making your staff aware of the situation and the need for action and by making change real; and this usually involves doing something that really makes people sit up and take notice. ‘Barnstorming ideas’ and shock tactics (and the messages they convey) can include:

• Slaughtering sacred cows – everything in your business is potentially up for radical change
• Killing something big – is there a large visible project that can be axed (without threatening future development)?
• Clearing out non-performers – you cannot afford passengers
• Breaking a blocker – If someone is actively blocking change, they cannot be allowed to win – either you are with the changes and where we are going or you are against us

Obviously, if you can get your staff to want to change (‘buy in’) they are obviously a lot easier to manage and motivate than if you need to force them to change. Unfortunately, as discussed below, the management style required tends to be dictated by the degree of crisis and speed of response needed. So what changes do you want to drive in your business, and what external pressures are there on your business that you can use to help make these changes happen? If you are looking to really change your business or are undertaking turnaround management consulting, to be successful, you will need to make long term change stick. Now we need to look at the techniques and processes turnaround firms use in implementing change management. Obviously, if you can get your staff to want to change (to ‘buy in’ in the jargon) they are obviously a lot easier to manage and motivate than if you need to force them to change. Unfortunately the management style required in a situation tends to be dictated by the degree of crisis and speed of response needed. Most turnaround situations start out in a state of confusion, chaos and a lack of control. As a result, in the initial phases of a real cash crisis or a turnaround situation, speed of change tends to be of the essence, periods of uncertainty have to be minimised, and control has to be established. This tends to require a highly centralised and directive management style (‘Tell’) to deal with the crisis phase as you get a tight grip on the business and there is a ruthless focus on the core issues of cash and what can be major changes to restore viability. Even during this stage however, respect for staff, even those resistant to change is important, and the critical distinction between a directive and assertive, and a rude and agressive approach, always needs to be maintained. As the degree of crisis reduces, the approach can be relaxed into more one of explaining the benefits of the proposed changes so as to obtain commitment (‘Sell’) while in the regrowth phase this needs to evolve again into a more empowering one (‘Ask’) which gives scope for staff to innovate and experiment and relaxes what may have become an over rigid management style. One approach that can be very effective in empowering a team to direct a swift pace of change is the ‘crisis weekend’, where you get your line managers together as a group for a real crisis summit. There the team can really work through, in a concentrated and intense atmosphere, what the situation is, what needs to happen, and who is going to do what. When done right, this team then becomes a powerful committed force and never forgets ‘Our twelve-hour days when we sorted out how we were going to really fix the mess.’ You will need to give the team time to gel however, as to become a team, the group has to go through a team building process of ‘storming’ where they argue about how to work, before ‘norming’ when they agree how to work together before actually acting as team and ‘performing’. As you move through a change process, the ways of effecting and fixing change will start with a very directing style of fixing new habits. One approach is to issue instructions and then check up every day for 21 days that the instruction is being followed that day. The theory is that by the end of three weeks, the new way of doing something will have become the new habit and your staff will know that once something has been decided, they need to do it because there is no hiding place and you will not be going away. You can then relax your enforcement and policing on this item significantly. This approach is however highly time consuming and your efforts will therefore need to be clearly prioritised. Over time you can move to a more empowering mechanism for changing the culture using a range of other approaches to manage the culture:

When managing staff it is important to recognise that your staff will have a variety of personality types and will be motivated by, and fear, different things and so below we look at the techniques used for managing people through change on a personal level. So, to decide what’s the best approach to use to start to achieve the changes you want, decide what degree of pressure the business is under and whether there is a ‘good crisis’ you can use. Managing change in your business, or in turnaround management consulting, is not just an abstract process, it is one which affects real people. Now we need to look at some of the techniques turnaround firms use in managing people while implementing change management. When managing staff it is important to recognise that your staff will have a variety of personality types and will be both motivated by, and fear, different things. To see what I mean let’s imagine there are only two types of people in the world which we will call square and round pegs respectively. You as an entrepreneur may be driven by success (and fear failure). Some of your staff may seek praise and recognition and fear rejection. Both you and these types of employees may often be quick to take decisions, and are restless, active, and open for change (let’s call you the ‘square pegs’). Many of your staff may however not be like this. Many will simply value security and structured policies within which to work (‘so they know where they stand’) and fear change, uncertainty or conflict (let’s call them the ‘round pegs’). You therefore need to be careful in normal times that you use and manage your staff in a way that is appropriate to them. So for example, your production staff are likely to be ‘round pegs’, who work best in the round holes of structured work when they are managed in a round peg way, for example with detailed instructions on how to do their particular job. Your sales staff, however, will tend to be ‘square pegs’, in square holes, who need to be managed in a square peg way with clear targets of sales to achieve and lots of praise for success. This also means that you need to manage the way you go about changing things to match the needs of your staff. If your pace of change is fast, while square peg staff may well be comfortable with this, your rush to change things can frighten your round peg staff. You and your other square peg staff may therefore need to slow the pace of change and provide more support to the round pegs so that these staff feel secure in their ability to handle change. If however your speed of change is slow, then while you will be moving at a pace that your round peg staff may be more comfortable, your square peg staff may well be frustrated by the rate of change and you may need to quicken the tempo to keep them with you. Particularly with ‘round peg’ staff, managing change can often be about building their confidence in their ability to change and this is helped by:

• providing support through training and information
• building trust through two-way communication, avoidance of criticisms of the past, allowing failures and appreciating that success may take time.

So, to decide the best approach to helping your staff make the changes happen that you want, think about who your staff are, what will motivate them and what speed they will be most comfortable moving at. Of course the information contained in an article like this can never be a full statement of the legal position as the relevant laws are complex and liable to change. This article can only therefore be a general guide as to the issues involved and as these can have serious implications you should always seek appropriate professional advice on your own particular circumstances before taking any action.

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