As organizational change sweeps across the business landscape, expert leadership skills are required to answer this question: What organizational change management methods consistently meets or exceeds the desired profitable results?
To find out, I uncovered what organizational change management leaders did who planned and implemented $10-million - $1-billion in profit improvement. I discovered highly profitable organizational change leadership always uses three key ingredients. Note: If any ingredient is missing or done poorly, then even the best plans fail to achieve the desired financial results from organizational change.
My 3-ingredient model for all highly profitable organizational change management is the following:
Ingredient 1: Leading the Organizational Change
Ingredient 2: Handling Employee Who Resist – or
Undermine – Organizational Change
Ingredient 3: Managing Your Emotions & Actions as
You Lead Organizational Change
Leaders at some of America’s best-run companies used my 3-ingredient model to produce successful organizational change. These organizations include IBM, Harley-Davidson, Intuit, Robert Mondavi Corporation, Outback Steakhouse, Ritz-Carlton, Excell Global Services, VF Corporation, and Washington Mutual.
1st INGREDIENT = LEADING THE ORGANIZATIONAL CHANGE
Leading profitable organizational change requires four key actions.
Action 1: Fit Your Organizational Change into Your Corporate Culture
I found the only organizational changes that improve profits are those that fit into the company’s culture. Brilliant changes that do not fit into your organizational culture will fail to achieve your desired financial results.
Action 2: Creating A Big, Exciting Vision for Your Organization
A company’s real vision is not the cliché-loaded mission statement adorning the company’s lobby. Instead, a company’s vision is a huge, compelling goal the organization aims to accomplish. For example, Ritz-Carlton Hotel Company’s vision is the following: Our key goal is to be the premier worldwide provider of luxury travel and hospitality products and services. Intuit’s big, exciting vision is this: Our key goal is to revolutionize the way people do financial work.
Action 3: Goal-Setting to Implement Changes
Goal-setting forms the steps that create the staircase leading to successful organizational change. Employees need measurable targets with deadline dates.
Action 4: Teamwork to Produce Profitable Organizational Change
Leaders of organizational change need to get employees to use teamwork plus interdepartmental collaboration. For instance, at Egghead.com, the large company that sells technology products and services, president and COO Jeffrey Sheahan and CEO Jerry Kaplan cleverly package four meetings each week to assure teamwork and goal achievement. First is a lunch meeting of Egghead’s top five executives to discuss strategy. Second is the “5 - 15 Report” from each manager which Sheahan reads to see how the manager is progressing on measurable goals. Third is the meeting of all middle managers where each manager announces how he or she is doing at achieving measurable goals. Fourth is a 20-minute “Social” for all employees; at this stand-up meeting – no sitting allowed! – ice cream and cake are served as employees publicly praise colleagues who accomplished wonderful things.
2nd INGREDIENT = HANDLING EMPLOYEES WHO RESIST – OR UNDERMINE – CHANGE
Surveys of executives reveal organizational changes often fail due to people problems. People problems include “R-n-R”: Resistance and Rebellion.
Once I received loads of TV and print media coverage when I delivered a speech at a national conference in which I declared, "The major emotional reaction of employees during organizational change is that they feel like their spouse or lover just walked out on them!” That statement summarized the shocking zing of betrayal practically everyone has felt for various reasons. Resistant and rebellious employees feel betrayed by their company making changes.
Prescriptions to manage the people problems include over-communicating reasons for change, “de-employing” employees who stop adding financial value, incentive pay, peer pressure to “get with the program,” and celebrating successes.
Another bottom line concern is this: Employees who did fine before the change may do poorly after the change is implemented. I call them “old-style” and “new-style” employees.” Here are vital differences:
Works in 1 department
Likes receiving direction
Prefers to be told what to do
Focus: Seniority & experience
Prefers shared leadership
Focus: Updating & expanding skills
During an organizational change management seminar and action planning meeting I conducted at one company, an executive stood and dramatically announced: “As our company makes major organizational changes, we always seek to cure the wounded. But, we will shoot the dissenters.”
Every manager in attendance sat in shocked silence for a few moments. Then, they all burst out laughing as they acknowledged the wisdom of what they heard. Some resistant employees need to be “de-employed.” After all, a company’s purpose is to grow and prosper -- not transform rebellious employees.
3rd INGREDIENT = MANAGE YOUR EMOTIONS & ACTIONS AS YOU LEAD ORGANIZATIONAL CHANGE
It is waste when managers use many great techniques to lead change -- but ignore something incredibly important: How they manage their emotions and attitudes.
To learn more about this, I conducted unique research. I had leaders of highly profitable organizational change fill-out my “Abilities & Behavior Forecaster™” pre-employment test.
My research revealed these magnificently successful leaders scored amazingly high on four of the “Forecaster™ Test” scales, namely, Optimism, Teamwork, Creativity, and Intelligence.
The fact that astounding leaders in America’s best-run companies are very optimistic, teamwork-focused and creative implies attitudes are contagious. These stellar organizational change leaders are role models. Employees detect and imitate their leaders’ behaviors and attitudes. This, in turn, helps leaders implement highly profitable organizational change.
© Copyright 2007 Michael Mercer, Ph.D.
Michael Mercer, Ph.D., is a consultant, speaker, and founder of The Mercer Group, Inc. in Barrington, Illinois, USA. He created “Forecaster™ Tests,” which are pre-employment tests used by many companies to help them hire the best. He authored 5 books, including “Absolutely Fabulous Organizational Change™” and also “Hire the Best -- & Avoid the Rest™.” You can obtain his free 15-page Special Report on “Dynamic Leadership Tactics” plus subscribe to his free Management Newsletter at http://www.DrMercer.com