All change

When Tom Peters, the great self-publicising management guru, told businesses in 1989 they would have to learn to thrive on chaos, many managers thought he was exaggerating. The assumption that Peters was just looking for a hyperbolic soundbite to give him a catchy title for a bestselling book was finally shattered by the credit crunch. Chaos had arrived in spectacular fashion and, even as the global economy tiptoes towards recovery, it is clear that Peters is right. Things have changed irrevocably. For all kinds of reasons – economic, political and technological – thriving on chaos may be one of the essential business skills of the 21st century.

The pity of it is that this isn’t something businesses have proved especially good at. Even managing planned change is beyond many firms. In a recent survey by consultant Bain and Company 70% of businesses said their initiatives to create large-scale change had failed to deliver. The failure rate has been constant since the 1980s. So we may know more about managing change than 30 years ago, but we haven’t got much better at it. Too many attempts to change companies are covered by Albert Einstein’s elegant definition of insanity: repeatedly doing things the same way but expecting different results.

Every business is different but businesses that manage change well often tend to do very similar things. This advice is designed to improve your chances of being in the 30% who manage change properly and profitably.

1 Remember change is not free or easy. If not properly resourced or supported, any change programme may lurch to an abrupt halt. One difficulty is that pursuit of change normally involves difficult decisions – and sometimes the teams supposed to be leading change aren’t prepared to face or make those decisions. And generic change programmes – which often have daft names like Operation New Broom – are often not as effective as targeted change.

Research for Harvard Business School has helped clarify the issue. While many soft issues affect change management (such as culture and motivation), Harold L Sirkin, Perry Keenan and Alan Jackson analyzed 1,000 projects and found their success or failure was pretty consistently down to four factors: project duration (especially the timeline between reviews), integrity of performance (in other words, how well the teams performed), commitment from the top and the additional effort required by employees. Armed with this research, they came up with their own acronym for effective change management DICE. One of the peculiarities of change management is that consultants seem to think you won’t be taken seriously unless you have a four-letter acronym: Bains has PLOT (Plan, Lead, Operate and Track.)

Remember, managing change is not a plate-spinning exercise. Too much change in too many business critical parts of the company could endanger the viability of the firm.

2 If you don’t know where you are, how can you get to where you want to be? Any attempt to change a company must start with a clear, honest appraisal of where the business is right now, accompanied by a rigorous analysis of the benefits and risks associated with any proposed change. Sounds obvious but one of the reasons many change management projects fail is because the initial agreement is more apparent than real. Different stakeholders might see change in different ways. It is best to be clear about the precise reasons for change at the outset. As tedious as they can be, an open forum can help make the rationale and the detail clearer.

Those analyses will help you decide which two or three indicators will, if properly tracked, confirm whether you are meeting your objectives. And they will also inform the vision that infuses successful change management projects.

3 Focus on principles not methods. At the start of a meeting, it is easy to agree that in principle we want to make this change because it will have this effect. But if you’re not careful, the discussion may soon be diverted into a blind alley where you focus too quickly on methods rather than principles. When Deng Xiaoping wanted to revive the Chinese economy, he rebuked diehard Maoists by quoting an old Sichuan proverb: “No matter if it is a black cat or a white cat, if it catches mice it is a good cat”.

4 Find the right team. They will light the fire but you can’t leave it all to them. Research shows that many businesses, trying to explain failed change management projects, ask similar questions: why didn’t we communicate more widely and clearly? Why didn’t the boss make his/her support more obvious? Why did department heads feel threatened by the project? Shouldn’t we have got more people involved? Why were some managers so negative about the change? And why did so many important messages get lost?

That means it is imperative that the right team is in place. If your attempt to change the company is cynically dismissed as the managing director’s pet project, it will fail. That’s why you need the right team – ideally drawing on different skills and business units – to make change happen.

5 Remember, change is everyone’s responsibility. Research has shown that many businesses fail to achieve the desired change because the boss doesn’t get directly involved – or only wades in during a crisis. Someone else can manage the team driving the change, but the managing director must be involved. Similarly, middle managers too often assume that managing change is someone else’s job. Left to their own devices, or managed in such a