Managing organizational change is tough, but there is no escaping it. Every organization is in a state of continual change. Despite all the studies and books on change management (I have 500 articles on change communication/management in my collection!), two thirds of all transformation initiatives still fail, according to many claims. Every organization’s situation is different and requires a strategy tailored specifically to its unique requirements. This is difficult.
However, Jennifer Frahm in an influential article on the common myth of 70% failure rate of change projects makes 6 points. If you are involved in change projects, you should read her points to gain better perspective on change programs being more successful than commonly supposed, because:
- The definition of ‘change project’ is questionable.
- The definition of ”success’ is questionable.
- Success is measured at the wrong time.
- The units of analysis vary – in different companies, industries as well as in the type, scope and scale of change.
- As a change consultant, Frahm observes that her results, and the results of her peers, are significantly better than the mythical 70% failure rate.
- A career-limiting admission for a CEO. Have 70% of the world’s CEOs really led failed change strategies. Hardly!
In recent years the experts have started to realize that the ‘soft’ issues of organizational culture, leadership, motivation and communication are central to change efforts. However, some of the most experienced experts from the high-profile Boston Consulting Group say “soft factors don’t directly influence the outcomes of many change programs”. They say the unfashionable ‘hard’ factors are the things that really count.
(At the same time it must be pointed out that management consultants have never fully understood the importance of communication. They seem oblivious to the fact that communication is at the heart of almost every aspect of change. Understanding the need for change and how to change doesn’t happen through mind reading, intuition or osmosis – it must be communicated, formally and informally!)
From their experience with hundreds of change transformations, the BCG consultants consider that the hard factors have three clear characteristics:
- They can be measured directly or indirectly.
- Their importance can easily be communicated internally and externally.
- Businesses are able to influence these factors quickly.
In a study of 225 companies undergoing change, BCG consultants found four core factors that governed the success or failure of change programs. Their experience in a further 1,000 change management programs worldwide since then has confirmed that the same four factors are still the best predictors of success and the best guide to the actual accomplishment of organizational change.
The four key DICE factors
The four DICE factors that BCG have found to determine the outcome of any transformation initiative in small as well as large organizations are:
D. The duration of time until the change program is completed if it has a short life span; if longer, the length of time between reviews of milestones.
I. The project team’s performance integrity; ie its ability to complete the initiative on time. That depends on members’ skills and traits relative to the project’s requirements.
C. The commitment to change displayed by top management and employees affected by the change.
E. The change effort required of employees over and above their usual work.
Communication is central to every one of the four DICE factors, even though the consultants play it down.
1. Duration
Organizations usually think longer programs are more likely to fail because the early momentum of change will slow down over time. However, the key variable is the length of time between project reviews – even long projects can be refreshed if regular reviews are held.
The recommended maximum time between reviews is 8 weeks. The preferable review time is when significant milestones are scheduled. The best milestones describe major actions or achievements rather than day-to-day activities. Such milestone reviews should be formal meetings that evaluate the project team’s performance. At these meetings, senior management should look closely at the dynamics within teams, changes in employees’ perceptions of the program, and communication from the top. Additionally, achievement of targets can be communicated widely to all relevant internal and external stakeholders.
2. Integrity
Performance integrity is the extent to which organizations can rely on teams of managers, supervisors and other staff to execute change projects successfully. Change programs largely depend on the caliber of the teams involved – management needs to make the best staff available to work on the change process while still contributing to their usual work activities.
Astute senior managers communicate the measures on which they will judge the team’s performance, and they communicate how the evaluation fits into the organization’s regular appraisal process.
3. Commitment
For change to be successful, it needs the commitment of the most influential executives (C1) – not necessarily the most senior – and also of the employees who must deal with the new systems, processes or ways of working (C2).
Commitment of the influential executives is largely embodied in their communication about the changes required. The BCG consultants say that no amount of top-level support is too much. Their rule of thumb is: when the senior managers feel they are supporting the change initiative at a level at least three times higher than they need to, that’s when other managers will feel those senior manageers are backing the transformation sufficiently.
Organizations often underestimate the role that senior executives play in transformation efforts. By communicating too late or inconsistently, senior executives can alienate the people who are most affected by the changes. Good communication is absolutely essential. And care is needed for good communication. For instance, in one case study a manager said, “Layoffs will not occur,” while another said, “Layoffs are not expected to occur.” This created confusion, cynicism and lower employee commitment.
3. Effort
When change programs are initiated, senior managers tend to underestimate the fact that employees are already busy. If employees have to deal with change activities on top of their existing day-to-day work, they will resist the changes.
Managers need to check the existing workloads of individual employees and the extra time that making the changes will take. The discretionary and non-essential tasks of employees involved in change can be removed. Management can review all the other projects in the operational plan and delay, re-prioritize or restructure them to reach a more realistic workload for employees. Temporary staff can be brought in to deal with routine matters or some activities can be outsourced. However, since it can be costly and labor-intensive to do this, senior managers need to think of the impact of such decisions. It is crucial in this stage for management to communicate well to all those involved about the role of each person so that everyone knows what is expected of everyone else.
The consultants calculate DICE scores according to the formula:
DICE = Duration + (2 x Integrity) + (2 x C1: Commitment of influential executives) + C2: Commitment of the people affected directly by the changes + Effort.
In other words, the impact of the change team’s performance integrity – the extent to which they can be relied upon to do what they need to do – and the commitment of influential executives are the two most important individual factors in change projects.
Although the consultants may not consider communication to directly influence the outcomes of change programs, the fact is that good communication is central to all of the so-called ‘hard factors’. A carefully considered communication strategy must be integral to all stages of the change process. Insist on it.
Reading: “The hard side of change management” in Harvard Business Review Online, October 2005. This e-book on change communication is useful for tackling the issues raised by change management.
A better communication model
Change consultant Jennifer Frahm is also a communication consultant, and she believes good communication is key to successful change management, but only if it is not simplified as much as many people think it should be. Frahm says most communication interventions follow a 3-step formula, which is unfortunate:
- Communicate the need for change
- Announce the change
- Communicate to reinforce the change.
Frahm considers a 4-step change communication formula is more effective:
1. Determine the purpose of your communication
Leaders often don’t explain clearly what they want as an outcome of the change process. They think of tasks, but rarely clarify the full extent of the change they are aiming for, according to Adjunct Professor Elsbeth Johnson in the Harvard Business Review (2017). Also, a 2017 survey by Quantum Workplace of the understanding of organizational change by half a million US employees found almost one-third were uncertain or didn’t like the way the changes were being made.
When faced with several change programs, or continual change, it is important to understand the purpose of the change and the change communication needed to achieve this. Simply put – is it intended to create further change, or to create some stability? Both are needed at certain stages, if not simultaneously. Good change managers know when to employ different communication tools and tactics to achieve these purposes.
Communicating for stability is all about reducing anxiety and addressing the information needs of your employees. It’s about creating as clear a vision as you can and assisting the employees to make sense of what is happening. This is where thought needs to be given to the credibility of the communicator and the best choices of communication channels. Also, we spend so much time communicating about what is changing, we forget to communicate what is staying the same! When we communicate what is staying stable, we provide employees with an anchor in stormy seas, something they can cling to while they get accustomed to the thought of change.
Another important aspect of change, according to Morgan Galbraith in the Harvard Business Review in 2018, is to provide an answer to the spoken or unspoken employee question, “What’s in it for me?” or “How will this affect me?” If your employees understand what’s in it for them personally, you’re more likely to see individuals commit to and own the change. Failing to articulate “what’s in it for me” will only hinder your efforts.
2. Employee communication expectations
Image: results of a 2018 Prosci survey on preferred senders of employee messages during a change program.
It is vital to find out what employee communication expectations are during a change program, to find out:
- What type of communication do they want about the change program?
- Do they want to be involved?
- Do they just want to be told what to do?
- Do they want face-to-face or other options for communication?
- How much information do they want?
- Who do they expect to hear from?
Frahm notes that some researchers suggest that the frontline supervisor (or direct report) is the best source of communication for the employees because they have a strong relationship with them. Other research conducted by large consulting firms suggests that senior management need to be integral in the communication plan. She suggests you won’t know until you ask.
3. Develop communication competences
Developing communication competences is critical for responding well to employees’ communication expectations. Some change agents are particularly skilled at being able to switch styles depending on the needs of the employee. They know when to employ an authoritarian information based style which reduces anxiety, and they can switch to a softer style that emphasizes listening, engagement, empathy and learning when there is a need to enter into conversations about change. Most managers have learnt the former style, this is after all what a manager does – set the boundaries, makes it clear what is to happen, and is comfortable with the power position.
Managers are less comfortable with encouraging risk taking, acknowledging what they don’t know, and treating employees as equal partners in the change effort. Empathetic engagement and a genuine interest in another person’s position can be a challenging task. This means to create organizations that change continuously, they need to have two-way communication training – in which management and employees learn how to engage in discussion and learn together.
4. Engage in informal conversations – ‘the background talk’ of change
Interestingly, Frahm realized the importance of engaging with the background talk of change – the informal conversations flowing in the background of the organizations. Some people refer to this as informal communication, gossip and rumor. Few change agents are willing to engage with the background talk. However, background talk can be a very important barometer of change where you gauge the success, acceptability, and uptake of your change initiatives. It is a place to establish where there may be a lack of understanding that will impede your change efforts. And can also be the source of better ideas.
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