Change Management - one by one!
Successfully implementing change will always be challenging. Statistically, 70% of all transformation programs fail and for this reason, Change Management will always be one of “today’s topics”. Like it or not, we will always be impacted by the changes around us and we either keep up the pace, or we will be left behind.
What makes change so difficult and why some of the most successful and innovative companies on earth fail to keep up the pace?
Here is how organisations are distributed based on how they are adopting technology:
1. Innovators (2,5%)
2. Early adopters (13,5%)
3. Early majority (34%)
4. Late majority (34%)
5. Laggards (16%)
(see video for graphic representation)
4. Late majority
The critical moment that most organisations experience is when reaching the self inflicted definition of success. Exactly as individuals, one tends to build walls around itself in the desire to preserve for as long as possible the “taste of victory”.
Without even realising, this late majority category falls into the so called comfort zone. A place from which it is very hard to move back up, but very easy to go even lower. Organisations that are in this category have a very conservative approach towards innovation and will consider adopting a new technology only long after it becomes an industry standard.
3. Early majority companies are the ones that need solid proof that something works, but as soon as this is provided they will make concrete steps towards adopting it.
2. Early adopters are like the scouts of the industry, always ready to identify new ways of enhancing their business and diversify the usage of new technology. Even though they are not the ones innovating, in most of the cases they are the ones responsible for scaling.
While playing this game the risks are higher, but the returns are worth the challenge and the potential consumer hype about the brand, or product, will significantly reduce costs for marketing campaigns.
1. Innovators are almost like unicorns. It’s not that probable to have one next door, but unlike unicorns they do exist and are the crazy ones changing the world. The people running innovative companies are mainly driven by the desire to make a difference and less by mundane needs such as profit and market share.
5. Last and also the least, laggards. They are the ones that started to build walls around success and slowly became unaware of the rapid changes happening around them.
I am quite sure you do remember some …
In 1959, Xerox launched the Xerox 914 photocopier and revolutionised the document-copying industry. This is something that you maybe already know … What you maybe don’t know is that Xerox also had a fantastic research centre. Xerox's inventions include: the mouse, the laser printer and a windows - icon-based user interface. Sound familiar?…
For years Xerox management did absolutely nothing with their cutting-edge inventions and continued to profit from the 914 photocopier. Meanwhile, Apple, Microsoft and HP ”borrowed” their technology and made billions.
Other two great examples come from the mobile-phones industry:
In 2007 Nokia was earning more than 50% of all the profits in the mobile-phone industry. In 2008 Nokia was said to have one of the most valuable brands in the world.
Even more strange is that Nokia has been a surprisingly adaptive company; moving between different businesses such as: paper, electricity and rubber shoes. They also made a great move anticipating the rise of cell phones and got rid of everything but the telecom business.
Nokia came up with the first smartphone back in 1996 (11 years before the Iphone) and built a prototype of a touch-screen - Internet-enabled phone - at the end of the 90s and continuously spent enormous amounts of money on research and development.
So, where did they go wrong? Nokia focused mainly on hardware, decided to ignore software and also underestimated how important the transition to smartphones would be.
They overestimated the strength of its brand, and believed that even if they are late to the smartphone game, they would be able to catch up quickly. Long after the iPhone’s release, in fact, Nokia continued to insist that superior hardware designs would win over users.
And I think we all know how that ended up!
In 2007 it had more than half of the market share of phones in the US. But even after the Iphone release in June 2007, Blackberry ignored for a significant period touch screen based technology, insisting their phones would remain the de-facto standard for enterprises.
And we all know how that ended up as well!
"Instant photography at the push of a button!" During the 1960s and '70s, Polaroid was maybe the coolest technology company on earth. They were an innovation machine that launched one must-have product after another. Polaroid grew from being a garage start-up in 1937 into a billion-dollar company
What they failed to realise was that digital cameras were going to be the way of the future and once they did … it was too late.
Polaroid filed for bankruptcy in 2001.
In 2005, Yahoo owned 21% of the online advertising market, It was no #1 among all players. Yet today, they are struggling to maintain their #4 position behind Google, Facebook and Microsoft.
Where did they go wrong? Yahoo decided not to be a dominant search player and outsourced their search engine to Microsoft Bing. Also very interesting is that Yahoo had the possibility to buy:
Google in 2002 for $5 billion dollars. The CEO refused and the deal dropped. Google is now the No 1 brand value in the world - worth over 245 billion (50 times more)
They also had the opportunity to buy:
Facebook in 2006 for $1 billion dollars. For some reason they lowered their offer during negotiations and Mark Zuckerberg backed out. Facebook is now the No 5 brand value in the world - worth over 129 billions (simply to calculate how many times over, right?)
If I were to ask you where would you place Apple in 2007, immediately after the iPhone release? What would you say?
Most likely you would consider Apple as being among the innovators.
“The best phone ever made! “
But what if I would ask you where do you see iPhone in 2018? Could it be that you see Apple somewhere in the comfort zone?
“The best iPhone WE ever made!”
Will Apple have the faith of Nokia and Xerox? Hard to tell at this moment. One thing is for sure: implementing change is not simple and even companies with almost unlimited resources can fail!
Dr. John Kotter is proposing a change model that companies can adopt when implementing change so that they will increase chances for success:
1. Vision and Leadership. Having a clear goal and leaders determined to take the organisation there is critical for the success of any transformation. After all, when you don’t have a destination, any road will take you there.
2. Sense of urgency. Employees will not go out of their comfort zone and change their ways if this is not critical for their well being. How many people you know, that made a significant change without some important event impacting their perception about life?
3. Early followers. Change can be considered a success when a critical mass of individuals adopted the new ways and set an example which the entire organisation is able to successfully follow. Those employees will be the ones constantly promoting the vision and will convince others to join.
4. Plan and Incentives. Every goal needs a good plan to get there and every good plan needs in between checkpoints that show you are on the right track. Also, employees need to be constantly motivated to move forward.
5. Flexibility. No need for change will be shaped by fixed environmental influencers. It’s important that leaders constantly adapt their strategies and openly communicate this to the organisation. Setting the right expectations is critical for the success of any transformation and moving forward in an agile way is one of the best ways to do it.
6. Prevent regressive behaviours. It is in the human nature to return to the old (comfortable) habits even after experiencing success. For this reason, it’s the leaders job to make sure that this will not happen. Organisations should set up: systems, procedures and processes that will prevent employees going back to the old ways.
As you can see, most of the steps are intuitive. Unfortunately, when implementing change, leaders often think extensively about the goal and the plan, but they rarely see the importance of creating a sense of urgency and often fail to build an army of followers.
It’s in our DNA as humans to try to adapt, rather than change. And it’s in our nature to resist change unless, continuing in the same way it’s impossible.
What do leaders need to know and do in order to inspire employees to change?
The actions and behaviour of an individual are the reflection of a complex internal web. The first layer consists of values and beliefs which are mostly shaped by surrounding influencers such as: family, friends, religion, education, society and so on. A more deeper layer represents the needs of the individual. Needs that he/she is born with and will try to feed throughout the entire life.
In his book “Creating lasting change”, Anthony Robbins talks about the six driving needs that govern our lives and divides them into two major categories: needs of the personality and needs of the spirit.
The needs of the personality are:
The need for certainty refers to those that like to feel secure and to know what is going to happen at all times. People driven by this need will usually plan everything in advance, have low tolerance for risk and will feel uncomfortable when something unexpected happens.
Funny enough, the next need is the one for uncertainty, or diversity. If you know everything about what is going to happen in your life you will ultimately feel bored. Diversity can bring spice and exciting emotions. People driven by this need, usually behave like there is no tomorrow. They are willing to take more risk and do not feel so uncomfortable when unexpected events happen.
The need for significance, or importance, refers to how special people desire to feel in the eyes of those around them. People driven by this need will desire to be in the centre of attention. This could be achieved by having a management position, following a career with public exposer and so on.
The need for connection and love refers to those people that need to have a strong connection with the others around. Individuals driven by this need are more likely to put peace and harmony above money or career.
The needs of the personality are:
The need for growth refers to how individuals desire to evolve over time. People driven by this need are in a continuous pursuit of a higher level of: knowledge, mastery of specific skills and so on.
The need for contribution refers to those individuals that want to give back to the world something of value. People driven by this need have a strong desire to help others in some way. It’s either by giving money, or spending their own time and knowledge with those around. There are many ways in which one can contribute.
As humans we have all the six needs. But only two of them will be the dominating ones which will, in the end, guide us in our decision making process. Having one, or another, need as primary will not determine if we are good or bad. For example a fireman could be willing to sacrifice his life because bravery feeds his need for importance, while a terrorist could be willing to sacrifice his life so that he feeds the exact same need.
What people do is not necessarily reflecting the need behind their action. For example a person could give money to charity in order to obtain the publicity derived from his gesture and therefor fulfil his need for importance. Also, when a habit, person, or situation, fulfils three or more needs it can become an addiction!
So what? Why is this important?
Employees will often choose an employer that provides an environment which fulfils their driving needs. If this is not happening, they will firstly disconnect and ultimately leave the organisation. Offering more money is not always the solution because one might end up having better paid, disconnected, employees.
Money are usually a hygiene factor which will not engage people. Successful leaders are the ones who know that employees will positively react if they are offered empowering ways to fulfil all their primary needs. Otherwise, the result might be the exact opposite.
One can understand and appreciate the world of the people involved in a transformation if he manages to answer some important questions in relation to all the six needs:
Security. Are all employees going to have a job once the new vision is implemented? In case not, how will the company ensure the transition and offer support? If someone is a manager now will he/she keep the position in the new structure?
Diversity. Are there new and exciting activities to perform?
Importance. Is there a way for individuals to shine so that others can see?
Connection. Is the new vision (and the transition towards it) offering employees ways to connect to each other by sharing a common set of values and beliefs?
Growth. What will employees learn / what new skills they can develop?
Contribution. Is this change making a difference for the organisation, or for the community?
In the end, just remember: there is no shortcut for Change Management! It has to be done one person at a time (one by one).