oranizational change equationTransformational change is the plan for moving from one’s “current state” to a desired “future state.” The implementation of any talent strategy requires change – letting go of existing processes, behaviors, and attitudes and a move to new ones that achieve and sustain the desired business outcomes.

Any deficiency in change management will impede the impact of the new strategy and may even cause a complete failure. In our talent management research, more than 90% of executives and other senior business and HR/talent leaders participating in our interviews and focus groups described change in a way that I’ve translated to this formula:

formula for change

 

For this writing, I’d like to study the P3 component. To execute the change, our research underscores three change approaches and four considerations (P3) that impact the successful implementation of any transformation effort associated with any human capital or talent strategy change.

Three Change Approaches

  • Mandatory Change. This change occurs because the change agent forces it via a position of authority or power. The change agent makes little to no attempt to share reasons for the change or elicit buy-in from anyone. Typically cultures that are controlling are accustomed to driving change in this fashion. This is generally the least desirable and impactful approach to change.
  • Data-Driven Change. This change occurs because the change agent has researched the feasibility of the change and has shared with stakeholders the data-driven viability of the change and highlights how the change has worked successfully in the past under similar sets of circumstances. Competitive cultures generally approach change in this fashion. A data-driven transformation strategy generally produces greater business impact than does a mandatory change strategy.
  • Cooperative Change. This change occurs because the change agent takes care to inform all stakeholders about the reason for change, the benefit to each stakeholder, and the expectations the organization has for each stakeholder in effecting the change. The organization invests time in educating stakeholders about the business implications of staying with status quo versus adopting the change, and stakeholders can readily see the individual, team, unit, and enterprise-level benefit to making the transformation. Stakeholders are invited and involved in the transition plan and their unique and innovative ideas are welcomed. In return, they embrace the change and take personal accountability for expected new behaviors, attitudes, and processes. Collaborative, creative cultures generally approach change in this fashion. A cooperative approach to change produces more business impact than do mandatory or data-driven approaches to change.

Not only are collaborative/creative cultures more conducive to effective change management, but they also are significant contributors to better business results. As I shared in my earlier post, 65% of organizations with collaborative/creative cultures report very good or excellent engagement of their critical talent segments. Compare that to organizations with competing/controlling cultures, and only 8% report very good or excellent engagement.

After the change agent has determined the change approach (mandatory change, data-driven change, or cooperative change), she is ready to plan for the transformation implementation.

Four Change Considerations

  • Type of Change. The goal of any change management is to improve the performance of the organization by altering how work gets done and/or processes are executed. Change management is about managing the people side of change (not the activities or tasks associated with change) to achieve the desired, “future change.” Change management could mean an opportunity change, a performance change, or both.
  • Scope of Change. Scope of change refers to the amount of change being effected. I like to think of it as breakthrough versus incremental. Breakthrough change can be characterized as a significant transformation stretching across the entire enterprise, engaging every stakeholder group. Incremental change typically impacts fewer stakeholders and takes places in one area, or a limited number, of areas in the organization.
  • Source of Change. Source of change refers to the initiating point of the change. Organizational change is usually either top-down initiated by the CEO and other senior leaders or bottom-up and initiated by employees. The most successful change management typically occurs when the change initiation is a combination of both – top management must communicate the need for change and the expected outcomes of the change and the employees have to respond after given the latitude and the freedom to nurture their creative thinking and contribute to the change initiative. 3M, Google, and Facebook are examples of top visionary leaders ensuring their initial change idea was planted in the employee team and letting the employees grow the idea.
  • Pace of Change. The rate at which change is effected is either episodic or continuous. The tempo of episodic change is infrequent and discontinuous. The tempo of continuous change is frequent and ongoing. Episodic change is prompted by organizational failings, threats, or opportunities and is therefore reactive. It is about unfreezing a less than effective situation, re-shaping it, and refreezing it, generally resulting in an improved level of a new status quo. On the other hand, continuous change is elicited by the need to address a perpetually dynamic environment and continuously improve. The tempo of continuous change is frequent and incremental with active interaction among an organization’s people, processes, and environment. Rather than being an occasional disruption, continuous change is an unending revision that could be described as perpetual re-shaping. With continuous change, there is never a status quo.

    There is clear dichotomy between episodic and continuous change. Selecting one approach over the over depends on the organizational situation – is the environment static and change can be reactive (should prompt episodic change), or is the environment dynamic and change needs to be strategic and anticipatory (should prompt continuous change)? In today’s highly distributed, global, and complex workplaces and workforces, our research suggests we usually best serve our business goals by adopting a continuous (not episodic) pace of change.

Effective change management is quintessential to implementation of “future-state” high- performance talent decisions. For now, picking apart the approaches to change and change considerations seems timely and relevant. Does your organization adopt one approach to change more frequently than another? What about episodic change — have you found it to work well? In what situations? Let’s ignite the conversations!

Until next time….

Laci Loew, VP and Principal Analyst,
Talent Management, Brandon Hall Group
@LaciLoew

Laci Loew

A principal talent analyst and consultant with Brandon Hall Group, Laci is expert in all areas of human capital management particularly talent management, leadership, leadership development, and succession management. She has worked in the public and private sectors consulting global and matrix Fortune companies across all industries on integrated talent initiatives. Laci holds a bachelor of science from the University of Illinois Urbana-Champaign; earned her MBA from Keller Graduate School of Management; and is currently a PhD candidate in organizational psychology. Laci’s hometown is Chicago and she is based in Las Vegas.

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