Evolution or extinction

By Jay Rath

A few years ago, the United Way of Dane County faced a new challenge from its donors.

Every year, the charity would present donors with greater needs in the community, and every year they asked, "'What are you doing to reduce or eliminate the underlying causes of those needs?' " said Leslie Ann Howard, president of the organization. They were telling the group: "That's your job!"

So, using a concept called "change management," the United Way transformed the way it operated over several years - addressing root causes of community problems rather than just the end result. The work was tedious, but in retrospect, Howard said she believed the group now adds more value to the community than ever before.

"We had a ... moral imperative to take our work to another level," she said.

In this fast-paced, ever-changing technological world - well, you get the picture. We all know that everything is changing. But we seem to know how to handle it less and less.

Into this upheaval has emerged "change management," a way of creating structure to reach a goal, whether in an organization, team or individual.

Microsoft Corp. internally defines it as "the practice of administering changes with the help of tested methods and techniques in order to avoid new errors and minimize the impact of changes."

Early in the history of the practice, the object was merely to overcome resistance to change. Today the emphasis is on creating tools and processes to manage planned change through social engagement.

"Change management is becoming synonymous with management itself," writes British business author Robert Heller, former American bureau chief of The Financial Times and author of "The Naked Manager."

It originally was seen as a combination of mechanical engineering and psychology, and even today "change consultants" draw on terminology from even more improbably combined fields, such as quantum mechanics.

The management philosophy, at its best, turns out to be real, practical and sensible.

Why so hard?

So if change is nothing new, why do companies often find change and change management be so hard?

"There are lots and lots of senior execs who would give their eye teeth to have a change management capability, so that they could just go in and wreak whatever changes they want," said Ohio-based consultant Fred Nickols. The goals could include anything, such as new products, more creativity, better morale, increased profits or capital, boosted productivity or wage issues.

"There are lots of reasons why it doesn't come naturally, why it is so poorly practiced by so many people," says Nickols, of Distance Consulting.

One reason why executives fail relates to the nature of authority and the nature of those on the receiving end.

"There is a surprising number of people who simply believe that people will do what they're told. And that's not the case," said Nickols. "One of the things that an awful lot of people do, including myself when I was in the military, is when the word comes down from up on high, the first thing you do is take a look at it and think, 'Do I really need to get on board with this? Ignore it? Do I go along with the program? Do I make it look like I'm going along with the program?' "

Capital Region business leaders agree.

"Company leaders can initiate change, but the team must implement it, so getting buy-in is critical," says Matt Uselman, president of Wind River Financial, a Madison-based provider of credit card and electronic payment services. "People tend to have more commitment if they understand why change is needed. You have to answer the question 'What's in it for me?' Once motivated to examine what they are doing and how they do it, change can occur from the ground up."

It works at Wind River, according to Uselman.

"Recently we determined that the process for boarding new accounts from our bank partners needed to be streamlined," he said. "Our goal was to improve the time to activate an account and to minimize paperwork involved for customers. With the help of the sales team, operations and risk management, we revised our process and accomplished our goal."

Uselman advises others, "Invest time in helping people understand 'why' and the benefit to them. To help the team assess the current process, create a clear vision of the future. Measurable outcomes help people focus their effort and let them know they are making progress."

Avoiding inertia

At MCD Inc., one of the largest graphic arts products and finishing companies in the Midwest, president Joan McNulty and CEO Dave Boyer together have carefully thought out their own brand of change management.

"We regularly review the need to modify our vision and objectives for a changing world and to better create what is valuable for people in the company," says McNulty. "We have worked to have open communications and to constantly learn how to create better teamwork that is useful when change is needed. It is our sense that it is best to learn how to create a culture for change in everyday actions that build trust and communications."

McNulty and Boyer both believe that beliefs and habits are natural and useful in managing our lives, but that this can also lead to inertia, while the world continues to change.

"A formal change process is useful to acknowledge where you are, what you have accomplished, and what needs to change," says Boyer.

"We try to give attention every day to creating a culture that invites working together on improvement, and movement to a common vision," says Boyer. He and MCD co-owner McNulty "try to start with our own resistance, beliefs and tendencies, and to share what we learn in a way that invites others to examine."

There may be impediments, but labeling it resistance "seems to be a disservice to creating change. It's too limiting. What's really causing resistance is the inertia to continue patterns and beliefs that have been useful. This resistance is really a stage of growth and transformation - it's very human and not something to be scorned or eliminated."

McNulty and Boyer say the more that people experience consistency, trust, and recognize the events that brought about the need for change, the quicker and better-able they are to embrace and even initiate the next needed change.

"It becomes a process through experience," said McNulty. "Perhaps a business should not implement change management, because this im-plies that it's a one-time occurrence run by experts. Evaluating the need for change and the usefulness of current methods and habits should be a part of regular conversations and analysis. Per-haps a business should always be reviewing needs, reviewing where the business is, and creating trust that a collective future can be created."

Not easy

Nickols recommends that the successful change manager have a clear mission or purpose. Build a change team. Ask for volunteers. Treat everything as temporary. Find a good team lead and stay out of his or her way. Give that team everything they want except final authority, and toss out the rulebook; if it's not new, it's not change. Then distribute the knowledge gained.
It's not easy.

"It was a very difficult change," said the United Way's Howard. "If you think about it this way, for the folks - especially on staff and the volunteers - their role before was to be responsible for a good process. In other words, a needs-assessment/fund-distribution process. Now those staff and volunteers are responsible for community outcome, like reducing the racial achievement gap, or reducing homelessness. It's a wholly different orientation."

Howard says that there have been four keys to United Way's transformation: involvement of volunteers and staff; lots of communication using consistent language; being available in a leadership role to all constituents; and lots and lots of training of volunteers and staff.

"It's really much more entrepreneurial, in the sense of looking at a goal and developing, say a business plan, or in our case a mobilization plan," says Howard.

Finally, take heart. Despite all the talk about the increasing pace of change, we've been through similar periods, long ago. "Let's see. The wheel, the sundial, the printing press - there are a lot of them," laughs Nickols. "The people who live in these times are probably no more overwhelmed by things than the people who lived prior were overwhelmed by their situation."

Varying strategies to manage change

There's no one change management strategy that is best for every company. What works best for you will depend on the stakes, the time frame, the available expertise, the degree of resistance and those who will be affected, and on how much you depend on that target population. Consultant Fred Nickols identifies four strategies for change:

Power-coercive - The assumption is that people will generally do what they're told or can be made to do. Change is based on the exercise of authority and sanctions. Obviously, this is old school, but even today "there's a tremendous amount of arrogance and hubris," says Nickols.

Environmental-adaptive - People oppose loss and disruption, but they adapt. Change here is based on building a new organization and gradually transferring people from the old one to the new one.

Normative-re-educative - People adhere to cultural norms and values. Change is based on redefining and reinterpreting existing norms and values, and developing commitments to new ones.

Empirical-rational - People will follow self-interest once it is revealed. Change here is based on information and incentives.

The empirical-rational method is one used by The Alliance, a Madison-based cooperative that helps companies manage health care.

"Through our own 'QualityCounts' report as well as our involvement in state and national initiatives, The Alliance works to create 'transparency' of health-care cost and quality information," says Cheryl DeMars, CEO. "Public reporting of this type of information not only fuels more informed decision-making by consumers and employers, but also prompts hospitals and physicians to improve the care they deliver."

Change management toolbox

Generally, the executive's change management role should be to identify and prioritize needed changes — and to buy into the change process as well as the goal. Ohio-based consultant Fred Nickols identifies five important executive skills, a sort of change management toolbox:

Business skills - The prerequisites are all the traditional skills, from product development, knowledge of customers, sales, hiring and firing - everything.

Political skills - "There's often a lot of political naivete at work," says Nickols. "People don't take the time to find out who might support (change), who might not support (change), and why. You can easily get duped as the changemaster, as it were, if you assume that everybody who's climbing on board is supportive of the change. A lot of them are trying to get in early so they can torpedo it."

People skills - You have to be able deal with a range of intelligence, ability, background and personality. Good communication is key here. "There's a surprising number of people who think that if they say something one time, everyone will understand what it is they want," says Nickols.

Also important is empathy, courtesy and compliments.

Analytical Skills - A strong analysis can be ignored or suppressed, but not successfully contested. In most cases it will win out.

System skills - The system is the arrangement of resources and routines intended to produce results. This can be compensation, promotions, incentives, your computer system or even roads. For example, the Wisconsin Department of Transportation recently added a Change Management Team to its staff. It reviews project issues and provides perspective and advice to project managers.

Jay Rath is a Madison freelance reporter.

jayrath@gdinet.com

Evolution or extinction

By Jay Rath

Resources

Printable format

E-mail this story

Index of advertisers

Directory