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Expert Advice on How To Move Forward With Change

July 1, 1996
Related Topics: Change Management, Featured Article
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It's a wonder you don't see buildings actually spinning on their foundations with all the whirlwinds of corporate change buzzing through them lately. Instead, they remain undaunted while human resources professionals, the designated change agents at most organizations, take the brunt of the gusts, enough to make their heads spin.

Indeed, Personnel Journal's latest survey of the nation's top HR professionals at America's Fortune 100 companies found that their number one concern is managing change. In fact, change management has topped HR leaders' priority lists two years in a row (1994 and 1995). So, if corporate change-and how to manage it-is your toughest HR challenge, you're in good company.

As the New York City-based American Management Association (AMA) describes it, change management is the developing discipline of planning, organizing and controlling organizational change to better solve present and future business problems. In the AMA's latest (1994) survey on this topic, in association with the change management team from the accounting firm of Deloitte and Touche LLP based in Wilton, Connecticut, 84% of 259 executives polled said they have at least one change initiative going on at their organizations. Nearly half of them said they have three or more change initiatives under way, including such business agendas as growth (39%), productivity (30%), competition (27%) and globalization.

Ironically, only 68% of the executives reported that their companies have established any sort of formal change management program to support these initiatives. That leaves 32% of organizations flying by the seat of their pants when it comes to leading their people through rapidly changing business climates.

While it may be a cliche to say that if you fail to plan, you can pretty much plan to fail, you may do well to heed the advice of change management experts who say you can't afford to forget the obvious in any change effort. They warn: Don't rely on your employees and management staff to simply fall in line with every new business plan you send their way. Chances are, they won't.

According to Price Pritchett, a change management expert at Dallas-based Pritchett & Associates Inc., the most important rule to keep in mind when you're facing a change effort is the 20-50-30 rule: That approximately 20% of the people in the organization will be change friendly; the next 50% will sit on the fence; and the remaining 30% will resist, or even deliberately try to make it fail. That means you have a heavy burden-because only 20% of the people will be with you from the start-so you must pull the other 80% of the organization toward your company's new goals.

Because change is perhaps the most important topic right now on HR's agenda, we assembled a panel of experts-both management gurus and HR leaders who've recently stared down the eye of the change storm and won-to give you insight into what to think about and what to do when change is in the wind.

Are HR professionals, in fact, primarily responsible for being organizational change agents?

Walter M. Oliver:
Yes, I'm responsible for being the change agent at Ameritech. However, other executives also share in this charge. In fact, all of our business leaders and employees must take an active role in harnessing the power of change on behalf of our customers and shareowners.

Kelly Ritchie:
As the leader in human resources, I'm responsible for change leadership. However, I view this as a partnership between everyone in HR and our employees. We all must continually look for ways to improve our organization to meet the needs of our everchanging workplace. For example, we've added new programs or enhanced existing ones based on ideas from employees. These include the addition of an employee assistance program, adoption assistance and a work/life committee. So, even though I'm definitely responsible as the leader, I really view this as a partnership. And I think by partnering, and by really having a strong focus on making the company an even better place to work, I believe it'll help our business grow. We'll support our employees, and we'll meet the needs of our customers.

Martha J. Watson:
I'm one of many change agents in my organization. I'm responsible, though, for helping all the other change agents (managers and supervisors) implement desired changes. I'm also responsible for helping top management identify needed changes in the overall organization. Yes, it's my choice, but it's also my choice by default because I'm the HR director. It has to do with the changing role of human resources management.

Coleman H. Peterson:
Yes. We're all challenged to be change agents; however, the role of human resources places one in the "natural stream of change."

What's the toughest challenge in leading a change effort from an HR perspective?

Walter M. Oliver:
The toughest challenge is to get the entire organization engaged in this process. That challenge is coupled with the need to make sure that each individual understands his or her role in making change effective. It's absolutely critical that everyone moves toward a certain level of involvement and engagement in the change process. Otherwise, a wide divergence of focus concerning the reasons for the change can slow or derail the entire process.

Kelly Ritchie:
One of our main challenges is to help everyone in the organization understand that it's not fully an HR responsibility to lead this change, but rather, it's the responsibility of all the stakeholders-employees, managers, senior managers and human resources. All areas must work together in building flexibility to help continue supporting our employees' needs and position the business for future growth. And what I mean by that is, it's not just HR's responsibility for performance reviews or development of people or any of those categories, but rather it's all of us working together.

Martha J. Watson:
Most of us in HR leadership roles today weren't trained for this kind of [change management] work. We're having to learn it as we go. I suppose that's good for us because it mirrors what we say is going to happen to most people in the coming years: We'll all continually have to learn new jobs. It's also difficult because in many organizations, HR isn't seen as adding value to the business. You have to get over that hurdle before you can be an effective change agent.

Coleman H. Peterson:
In a strong culture, change can sometimes look like the enemy of what already has been accomplished. It's important to understand that the change process is holding on to the successful elements of the present culture and adding new elements that are important to propelling that culture into the future.

What three tools do HR leaders need to help lead their organizations through any change effort?

Walter M. Oliver:
The three tools an HR leader needs are-1) A thorough knowledge and understanding of the change process, 2) Courage and 3) A positive personal self-image that encourages continual learning and growth.

Kelly Ritchie:
The first thing you need is a strong employee focus. Then, you must be grounded in values. We're grounded in our company's values-the principles of doing business and the culture that we've all created here. We use those as the cornerstones. Then, the third tool is continuous improvement-being innovative with ideas focused on improving the quality of work life.

Martha J. Watson:
The three tools you can't live without in managing change are: flexibility/adaptability, knowledge of the business and highly developed human relations skills.

Coleman H. Peterson:
Vision, patience and passion.

How do you harness energy from employees-both positive and negative-to enhance rganizational change and leverage it to an organization's greatest advantage?
Stephen R. Covey:

I think that HR professionals need to be listening posts. They must learn how to listen empathically. Use this analogy. When you have air, you don't think about it at all. But if you were to take the air out of the room that you're in right now, you'd be running to get air. The unmet need motivates. So, when you listen to people empathically from that frame of reference, emotionally it's so affirming and validating to them, they cease being defensive. And negative energy is dissipated.

HR people are in tough positions because they're often in the crossfire between all of the forces of change and all of the forces within the culture that resist change. If they can learn to listen empathically and not take it personally-not agree, not disagree, just understand-they'll find these negative energies disappear and get converted into positive energies. People then start to become more a part of the solution rather than part of the problem.

Walter M. Oliver:
The way to harness the energy of employees is to keep them focused on external, customer issues instead of issues with one another. People must have a clear understanding of the reasons for change. At Ameritech, external issues focused the need for change-the competitive marketplace and the regulatory climate were radically altering our business environment. Customers were at the crux of those changes. Senior executives worked to get in front of those challenges. So by revamping our culture, structure, processes, procedures and environment, we changed from a stodgy, bureaucratic monopoly into a nimble, competitive corporation focused on our customers' needs. It wasn't easy, but it was necessary and successful.

Kelly Ritchie:
I think all of our efforts in HR are built on trust from employees and managers that we're sincerely interested in making improvements that add to the quality of Lands' End. I think we try really hard to listen and then try to respond to those issues, so people feel like positive change is occurring as a result of their ideas. It's built on trust. It's built on people actually seeing us take action based on what they're telling us. If you establish that trust, people are more willing to come forward with ideas and thoughts about what we could do to make it an even better place to work.

Martha J. Watson:
I think you have to give employees a clear and consistent direction and the flexibility to get there any way that makes the most sense to them. Reward the risktakers and support those for whom change is much harder. If you have unions, get them on board, too. That will help a lot.

What needs to exist in a corporate culture first before long-term corporate change can happen and stick?

Stephen R. Covey:
I think the missing ingredient with all of these new initiatives taking place inside corporations-such as the quality initiatives, empowerment, reengineering and outsourcing-is what I call 360-degree trust. That means trust, not only with your customers, but also with your suppliers, your people, the community, your dealers, your owners, the media-with all who have a stake in the welfare and success of your operation. This takes an ecological kind of thinking. You have to see the very delicate balance of how you achieve this kind of trust with all of these different stakeholders. If you only build trust toward customers, for example, and you violate your own people, you'll gradually kill the goose that lays the golden egg. If you neglect the community, the environment, the next generation, and if you don't have a sense of social responsibility, eventually you'll kill the goose that lays the golden egg. They're all interrelated.

So it takes an HR professional who encourages the executive decision makers to take the long view and to take a balanced ecological view toward all these stakeholders. Then they'll find that they build trust which comes primarily from trustworthiness. That comes from our own integrity and living by our commitments and also from philosophically aligned structures and systems. You must work to align your work systems, your information systems, and so forth, with the values of cooperation, interdependency and 360-degree trust toward all stakeholders. And that's the source of trust-it's trustworthiness at both the personal level and the organizational level. HR professionals can become real catalysts in creating this understanding, this paradigm and this focus in executive, strategic decision making.

Robert Levering:
Trust is the most important ingredient in any corporate change process. Without it, management may find itself constantly fighting rear-guard skirmishes with employees instead of leading everyone forward with confidence toward the future. I believe trust is composed of three elements: credibility, respect and fairness. An example? Several years ago, Northwestern Mutual Life (one of the firms profiled in "The 100 Best Companies to Work for in America") embarked on a major change effort to improve service quality and productivity. But it did so in such a way that it was able to maintain a high level of trust in the organization. First, the CEO called everyone together and assured them that no one would lose his or her job as a result of the process. Next, the company engaged clerical workers in task forces to redesign their jobs. To make a long story short, major change was accomplished (in one department, 60 job classifications were reduced to six) and that achieved the company's objectives. Both productivity and service-delivery quality improved markedly.

At nearly the same time, another midwestern insurance company went through a similar change process that, on paper, resulted in a comparable redesign of job classifications. But the firm didn't involve the employees in the redesign process. Worse, from the standpoint of trust, the firm did nothing to reassure workers that they wouldn't lose their jobs because of the change. (In fact, a number were laid off.) The result: No change in productivity, morale plummeted and the company even had to fight off a unionizing drive among clerical workers.

Joan E. Farrell:
I think that a clear, unwavering vision of the future is an absolute necessity in a sustained change effort. This vision must then be backed up by a sound business strategy, strong values and an unblinking leadership team. Change is a war zone, and trust alone is powerless. Lead, communicate, train, trust, and people will do all they can.

How does a company begin to establish trust inside the organization, and what role should human resources play in the process?

Stephen R. Covey:
I'd like to focus on the image of a ship's trim tab. A trim tab [is the device that] turns and directs the rudder, which in turn, steers the ship. That's a tremendous image for human resources professionals. They should see themselves as trim tabs. Rather than getting seduced by their cultures and feeling unappreciated and undervalued, which oftentimes HR professionals do, they should be the catalysts, the smaller rudders that move the big rudder, that moves the entire ship. How? They need to be more loyal to principles than they are to their company. That's the best way to serve the company.

For instance, what if you went to a doctor to get a physical, but the doctor was more interested in impressing you and in telling you what you'd like to hear than in telling you the truth? You wouldn't feel well served. You want to hear the reality and that takes courage. I've worked with thousands of human resources professionals, and many times they feel undervalued, unappreciated and gradually become, in a sense, part of the culture. They get sucked into the culture and feel they have to be accepted; they have to keep their job and they kind of sell out. They use esoteric, professional language to badmouth their top executives. And they often take sides in the crossfire. They become the master and victim of doubletalk. I see them, little by little, losing their influence.

The way to enlarge your circle of influence is to get centered first on principles that are larger than any organization and that ultimately control life, such as honesty, integrity, courage, service, continued professional growth and 360-degree trust. If you get focused on those principles and you're courageous, but also empathic, you'll become a force that's formidable. And decision makers will have to contend with you. It may take a few months, even a few years, but HR professionals will become a key force in their companies-a true trim tab person. And executives won't make major decisions without their involvement. Where do they get the courage to be principle-centered, courageous and professional? They have to make sure that their own professional development is ongoing and that they're at the cutting edge of all that's happening.

Robert Levering:
Trust must be earned over time, but it can be destroyed overnight. It requires constant attention. Trust is earned by management showing good faith-by being open, by being respectful of the individual and by being consistent. That's done both through the company's policies and practices and by the way in which individual managers implement those policies and practices. HR professionals can play a big role in the process of building trust by encouraging more trustworthy behavior on the part of managers and by assuring that appropriate policies and practices are in place. There is no "Trust Cookbook" with a ready-made list of recipes of trust-building policies.

This much I've learned from years of researching the best workplaces in America: What distinguishes the very best workplaces is the way in which policies are designed, implemented and supported. All of this occurs in an atmosphere of trust which means that management is open and accessible, shows genuine appreciation for the work done by employees and has a high degree of integrity. The best human resources professionals I've met over the years understand that ultimately what's important is the nature of the management-employee relationship, not the details of the policies themselves. The very best policies in the world make no difference if they aren't well integrated with all other aspects of the company's relationship with employees.

Walter M. Oliver:
Trust is developed through an openness of information, free flow of knowledge, clear direction, consistently communicated progress and finally, thorough knowledge about the process of change and results.

What have you done in the past that will make employees ready to trust you to lead them in the future?

Walter M. Oliver:
First, we have demonstrated consistent and proven accuracy in our strategic decisions. Second, we work very hard to keep people informed about the direction the corporation is taking. Our chairman regularly communicates with employees via e-mail on important issues to the company. Furthermore, he personally answers the responses he receives from employees. And third, we work to be consistent in communicating the vision of the company as we continually make progress on this journey. Change is a journey, not a destination.

Kelly Ritchie:
I think implementing new programs or enhancing existing programs that initiated from one of our employee's ideas is the strongest sign of building trust. It demonstrates that we truly are listening and we're trying to improve whenever and wherever we can. It's also building on the partnerships that we've created so people feel comfortable to let us know what they'd like to see. In one of our areas, someone had the idea of a shift giveaway (workers can give a shift away if they can't work it.) We piloted the program and have rolled it out in many areas. If people feel their ideas have been heard, and in some cases, those ideas have turned into enhancements, they're much more willing to keep that open dialogue.

Joan E. Farrell:
We said what we would do, did what we said, hung on through adversity, never blinked and were prepared to lose our jobs before we sacrificed our vision and the peoples' effort in working toward it. On a personal basis, you become what I call the "organizational oiler" working behind the scenes to listen to squeaky wheels, slipping drive belts, worn gears and faltering engines and rolling up your sleeves to get things going again without any fuss, muss or bother. You suggest solutions, people try them and they work. And you never betray a confidence.

Coleman H. Peterson:
Listening. We work hard at listening to our associates. Listening establishes trust and a confidence on the part of the associates that their servant leaders want to do the right thing.

How do you manage the stress on the human resources organization during a change process/cultural transformation?

Walter M. Oliver:
The management of stress on the HR organization is best accomplished by sharing the challenges. It's important to keep the balance of responsibility on the people involved in the change-managers and employees. Avoid loading the charge on any one function. And work to foster independence among employees for this process. A dependence on HR can become self-defeating. Instead, use the revamping of the organization as an opportunity to accelerate growth and learning for everyone involved, from the chairman down to entry-level employees.

Joan E. Farrell:
Because there's no end of the tunnel, there's no light at the end of the tunnel. So we make our tunnel as comfortable as possible and keep on rolling.

Martha Watson:
We do lots of fun things and provide lots of training opportunities. We help people see the future and help them see themselves as having a role in that future.

Coleman H. Peterson:
This is a challenge! It's important to remember that our HR associates are only human and are experiencing the same anxieties and pressures of the rest of our organization. Therefore, it's important to keep them well educated on the "whys" of their activities. Then we must keep them focused on the "hows." We must celebrate and appreciate their work and help them understand how key they are to the change process.

When an organization is changing, what happens if you don't align traditional HR concerns, such as benefits, compensation, reward statements and so on, with the change effort?

Walter M. Oliver:
The nonalignment of HR issues with the change process inevitably slows momentum and creates frustration among employees. A greater threat to the change process is that this nonalignment can divert the focus and attention of the organization away from key business objectives and toward ancillary human resources issues. This can waste precious time and resources that would be better used addressing the external issues confronting the organization.

Martha J. Watson:
It'll take longer to get where the organization needs to go, and HR will be perceived as a barrier, rather than as adding value. HR can't be a change agent if it doesn't change itself.

Joan E. Farrell:
People are sensitive to mixed messages. The true believers are few; most will hang back and wait for us to blink. If exceeding customer expectations is what we say we want, but we reward people solely on the basis of machine efficiencies or bottom-line results, it won't happen. It's also important to look beyond HR systems to other business systems. If we establish mutual respect and trust as key values but require three signatures for a team leader to buy $50 in supplies, we're kidding ourselves. Internal control systems are often based on a zero-trust premise. You can revamp these systems to ones of high trust and still have sufficient checks and balances to avoid getting burned.

What do you think is the most important question or topic in change management that you'd like discussed or answered? Then discuss or answer it.

Walter M. Oliver:
The two most important questions every company must ask are: Why do we need to change? And, what is the value proposition for everyone involved in the change process? Each company must be able to clearly state the need for change to each stakeholder group, including employees, shareowners, neighbors, customers, and if applicable, regulators. By necessity, those answers will be as individual, and specific, as each organization. At Ameritech, we've been able to succinctly and clearly articulate the need for change: Competition was coming to our market. The monopoly way of doing business was over. To prosper in this new environment, customers had to become the focus of our business. So what was good for customers was also good for us. And we continually work to help employees understand how and why these needed changes help everyone accomplish their business and personal objectives.

Joan E. Farrell:
What are you prepared to give up, personally and organizationally, to ensure that change sticks? It should be all but one's personal values and the end vision. You're an agent of change, and as such, you must do whatever it takes to get it done. The sacred cows may die, even the ones you've raised from birth. Making change happen must be more important than pleasing the boss, getting a raise, making friends, having a balanced scheduled, or often, even getting a good night's sleep.

Stephen R. Covey:
The change process is going to increase the importance of the HR professional's role in the future. Here's the reason why: The world is in such a permanent whitewater state of change, that every organization and culture needs something that doesn't change. The HR professional represents those principles and becomes a source of security which enables people to live with change and to run with it in exciting and profitable ways. But what if you have no one representing that which is unchangeable? What's going to happen? Then the whole world becomes topsy-turvy, and people start protecting their positions. They start keeping the old industrial forms of structures and systems that are absolutely obsolete in today's marketplace. And the HR professional then gets caught up in that and then runs scared and gets defensive.

So, the role is going to increase in significance and human resources professionals should feel a tremendous sense of hope. The hopeful thing is that organizations will develop enough principle-centeredness so that they'll be on the cutting edge of their marketplaces. HR professionals are at the vanguard, ahead of the pack. And that's what gives not only hope, but also a tremendous sense of adventure. It's so much fun. Because when you're anchored to principles inside, you just love being extremely open, flexible and adapting to whatever flows at you.

Personnel Journal, July 1996, Vol. 75, No. 7, pp. 54-63.

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