Change is Hard; Transformations Fail

You Can’t Just Implement New Technology or Strategic Changes and Expect Everything to be OK. Transformations take intentional planning and solutions just like everything else we do in the business world, so don't take it lightly.

In retrospect, I probably should have led with this blog, but the topic is important none the less.? Even with all the research, evidence, and case studies, companies far and wide elect to adopt major changes, without implementing an orchestrated change plan.? This blog presents the case for change to influence those companies and leaders who have major changes coming forward in the near – term but assume that their people will just automagically adopt the changes and perform better than ever.

When companies first started changing the way they operated, the technology they used to serve their customers, or the businesses that they included in their portfolios, organizations showed little to no discipline around formal change activity.? As writers like John Kotter and Stephen Covey started talking more about the practicality of helping people through changes to ensure that they understand the change and know how it impacts them, many organizations began adopting more transactional change practices like training and communications to inform change targets of the impending changes and provide the knowledge they needed to operate after the changes take place.? A half dozen years later organizations like Pro-Sci began to put even more rigor to the change process, identifying the additional steps that organizations should take to help change targets through the change process, like driving sponsorship and measuring success of the change efforts.? Companies that use these or other formal change approaches help their change targets see the value of the changes and as a result achieve the results they desire.? Companies that choose to simply launch changes without helping their employees through the change rarely see the adoption required to ultimately achieve the business results they anticipated when they made the initial investment.

Let us look at 2 scenarios in which organizations launched major changes without creating and implementing intentional change strategies to help their employees through the change and discuss the outcomes they didn’t achieve, relative to a third scenario where the organization invested in change efforts and saw significantly better outcomes.

Retail employees need to understand how to sell in a new store design

A large retailer experienced a long history of differentiation between itself and its top competitors.? Many years earlier, it recognized the opportunity to create a retail shopping environment that all people, regardless of gender, profession, and socio-economic status could find what they needed, easily move throughout the store, and leverage one of many wide-open cashier stations to pay for their stuff.? Over time, the company’s top competitor started to morph its own retail locations to look and feel more like the retailer’s operations.? As the stores started to look more like one another, customer research revealed that customers could no longer differentiate between the brands (aside from the colors that anchored their branding), because store layouts, product mix, and associates looked the same.

The CEO of the retailer refused to stand idly by, as customers viewed the company as a mirror of the top competitor, so he initiated a research project to understand how the retailer could differentiate itself from the competition again.? When the research came back, it clearly indicated that customers wanted to see, feel, and touch the products they bought, particularly when buying more expensive stuff.? The research also indicated that the store could create environments where customers could imagine themselves in their own homes with the expensive purchase.

With this data, the CEO, in partnership with his operations leaders, set out to redesign the inside of the stores, to include imagination centers, where customers could see, touch, and feel the stuff they wanted to purchase and then leverage computer generated designs to make adaptions to the stuff they saw in the store.? The project remained highly confidential for a year, so the retailer could stay in front of any competitors that might get wind of the changes, going so far as soft closing the 2 prototype stores, so they could hold a grand reveal, with customers and employees.? The plan seemed full proof.

The plan seemed full proof.? When the beautifully refurbished prototype stores opened, customers and employees reveled in the new design.? The floors looked amazing and the colors on the walls invited people to sections of the stores.? The outside sections of the stores contained signage that led people to the new and exciting parts of the store, where the most expensive products resided.? And the imagination centers created views of what someone would see when they took the products home and the opportunity to interact with any proposed changes live on an iPad.? Feedback not only demonstrated a retrenching of their loyalists, but it also brought it new customers that never shopped at the retailer in the past.? The CEO patted himself on the back and set out to request significant funding from the board to make the same changes to the rest of the network.

Unfortunately, the leadership team not only kept the experiment quiet from the customers and local employees, but they also kept it quiet from the employees across the network for an extended period, even after the great results from the prototype stores.? They also decided that despite significant changes to the stores, which resulted in new methods to engage customers, the organization did not invest heavily in assessing the change impacts, designing new processes for the employees to follow, or training employees on modern ways of supporting customers.? As a result, as the changes started to roll out more broadly, the employees who lost their jobs for 90 days, while the construction changes took place started to develop resentment towards the company for putting them on the unemployment line temporarily.? In addition, when they reopened the stores, the employees did not have a good sense of where products resided in the store, where customers would congregate, or how to best engage customers in one of the imagination centers.? One year and one hundred stores into the experiment, the retailer stopped the program and stopped refurbishing the stores.? Despite good sales results in the transformed stores due to the higher basket values driven by the imagination center, the employees never took to the changes and customer service scores dropped tremendously.

You Cannot Just Call Roles Change Managers

A large, global financial services organization recognized that as they rolled out major programs, the employees did not buy into the changes very often and the programs rarely realized their intended ROI.? As the company studied the scenarios more closely, they found employee feedback from post-mortem discussions revealed a desire for change management support as the changes went into place.? With this feedback, the PMO decided to embed change activities into the job descriptions of their current project and program management folks and change their titles to change manager.? They figured that if they called the roles change manager, certainly that would send the message to the employees that change management services were part of all programs.

Unfortunately, the organization did not think about the fact that a role title change does not necessarily result in a behavior change.? For years, the company hired strong project and portfolio managers, many of whom held project management certifications, and they did an exceptional job managing, tasks, scope, risk, and budgets.? However, they had never been asked before to help the people for whom they are implementing changes use the changes they made.? They did not have a communications or training background.? They presented to executive audiences on progress all the time, but never worked with executives to sponsor programs actively or align to changes to which they did not fully agree.? The employees were asking for people to help them adopt changes, and the organization provided light touch communications, executed by people who knew process better than people.

In the end, the PMO not only failed to deliver on the request for change support, but they also asked the project managers to take on more work, resulting in poorer project management than ever before.? The business teams started to lose confidence in the PMOs ability to even manage projects and started to outsource the project management activities.? Ultimately, the company disbanded the PMO and let many of their “change managers” leave the company.

When done well even what seems simple requires committed change support

A large operations company, with a highly tenured workforce, recognized the need to implement digital tools to enable their field employees to work faster, cheaper, and better.? They assessed the field employees’ needs, identified 30ish products that they wanted to build to better equip their operations employees, and built high-level business cases to demonstrate the expected value of each tool in the portfolio.? They presented the case to the board and very quickly received approval to spend a large quantity of money on digital assets that they expected to make operators’ jobs simpler and safer.?

After the board meeting, one of the board members, approached the digital leader and asked a very important question, “how do you expect your aging workforce, with limited exposure to digital tools to adopt your tools?”? He smiled, and responded, “that is a great question.? If you look at all of our business case canvasses, you’ll see we have intentionally embedded funding for change management support and a contingency for value realization, if adoption moves slower than we anticipate.”? The board member smiled and patted him on the back, because she knew from her experience leading the manufacturing division for a major airline parts producer that even the simplest changes require support for the people you expect to operate differently or use a different tool.? She also knew that in an operations setting, employees are not as comfortable with digital tools and therefore, adoption often requires a more concerted effort.

To demonstrate their commitment to the change efforts, the digital team did not wait until tools were developed to bring in change targets.? Rather, they brought subsets of the employees into the design sessions to understand their specific needs and design tools that offered value to the work they did.? They did sprint reviews with different sets of employees to make sure that as the tools evolved from MVP to more refined, the employees could redirect decisions they made, based on previous feedback.? Weeks before tools became ready for prime time, they communicated wide and far about the tools, explaining the utility they provided and the benefits to the employees.? In real-time, they provided overview training to the operations teams on how to use the tools to do their jobs and what to do if the tools revealed an error in the operational setting.? As tools went live, they provide mechanisms for employees to safely ask questions and troubleshoot the tools if something went wrong.

In the end the tools were adopted far and wide.? Why?? Because even for tools that required employees to open apps and allow them to run, the company invested in the change enablement.? Because the employees provided feedback throughout the entire development process and knew what to expect from the tools.? And because the company valued, invested, and expected change management to be part of the program launches.? Commitment to change management demonstrates a commitment to your employees and ensures that they believe you at least have their interests in mind when exacting change, even if it seems like a big change for them personally.

Key Takeaways

My former colleague at Deloitte, Josh Bersin, espouses a great quote that summarizes the value of change management better than any other quote I have ever seen, “50% of transformations fail, because people don’t come along for the journey.”? Companies far and wide investment millions (or even billions in the case of the store transformation discussed above) in the tools, processes, or layouts, but invest pennies on the dollar in change management support.? Yet, statistically, 50% of those multi-million-dollar transformations fail when people do not adopt the changes.

I can only encourage my executive friends out there to take notice.? Change management brings your people along for the journey, helps them use the changes to do their jobs more effectively, and ensures that the shareholders’ investment that you used to fund the changes deliver a return that keeps them investing in your company.? It communicates intent, generalities, and specifics that informs them of the changes.? It trains them in the changes and ensures that they know how to operate differently in the future.? You can no longer just assume that your people will adopt those changes without support.? You can no longer just implement and do nothing to help them on the journey.?

?Thanks for reading. I look forward to the discussion.

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