CHANGE MANAGEMENT 4.0

It has become popular to talk about change management being dead. Or broken, ill, aging, retired, dying, preparing for its funeral, etc. (1), (2), (3), (4). The main message of these strong statements is that change management as a discipline is becoming very old-school, many of its concepts that used to be mainstream in the ‘90s and early ‘2000s are now obsolete. Furthermore, there are new management techniques like Agile that have taken over change management’s position as the modern management tool that creates and supports change. So, what to do? Should we place change management in a retirement home and wait until it really passes away, or can we bring it back to life?

In this article, I argue for the redefinition, revitalization and "re-branding" of change management because I am convinced that it can play a very important role in today’s fast-changing business world. But this revitalization requires fundamental changes in change management and by change management professionals.

Change Management is probably the only management discipline that “managed” to build a brand that is associated with negative attributes like:

• “It fails 70% of the time" (i.e. it does not work)
• “It is about going through grief”
• “It is about managing the resistance of people" (i.e. it is about “managing” people through things that they do not want”
• “It is about going through 8 or 10 or 7 or 6 steps”

By now, we know that none of these “brand attributes” are actually true:

• The real failure rates of change initiatives vary a lot, but in many cases, it is much better than 70% (for a good summary of research results on the real failure rates see (5)).
• It is not true that people go through change in universal stages of grief.
• Resistance to change is not a universal and inherent “feature” of people. Very often people create change themselves and change can be positive, exciting and inspiring.
• Going through 8/10/7 or 6 linear steps is not the correct way of describing the process of change in organizations.

Still, these attributes are stuck to change management, many change management consultants, trainers and practitioners are keeping them alive by teaching them, using them. The result is that change management is losing ground to new management methods and is being announced dead more and more often.

So, how did we get here and what can we do about it? 

CHANGE MANAGEMENT 1.0 – The grief curve

And in the beginning, there was the grief curve… In 1969, Elisabeth Kübler-Ross introduced her famous curve about the stages people go through before dying (Denial, Anger, Depression, Bargaining, Acceptance). Somehow these stages of grief got associated with organizational change, and the famous “change curve” was born. It was intuitive (we can all remember change situations that were difficult for us to go through) and was well marketed, so became very popular. Even today, many managers and change management practitioners base their change approach on the “change curve”. The change management methods that are built on the grief/change-curve claim that our job as managers of change is to monitor which phase our people are in regarding a certain change process, and provide the adequate support and counseling they need to go through that phase. This approach is misleading (sometimes even harmful) for several reasons:

• First of all, there is no scientific evidence what-so-ever that people go through these universal stages in all situations of change. (Proper scientific evidence proved that not even the Kübler-Ross grief curve is universally true (6), (11).)
• Secondly, it generates a mindset that is unnecessarily negative: considers only negative change, links it to grief and the difficulties of acceptance, as if people can only be victims of change and could not / should not create it themselves.
• It also suggests a very limiting view disregarding many important aspects of creating, managing, and supporting a change process.

CHANGE MANAGEMENT 2.0 – “N steps from A to B”

In the ‘80s and ‘90s, change management became more and more important for the business world, so a lot of effort was put into the development of more advanced methods. The result was a good number of models and techniques with some common attributes:

• The “grief-curve” approach and CM1.0 created a solid ground for the paradigm that said: “People dislike change. They will resist it. Therefore, the task of change management is to manage the resistance of people.”
• Change was seen as a temporary period between longer phases of stability: moving from status A to B. Lewin’s famous 3 phases of “Unfreeze – Change – Refreeze” was the generally accepted model of change, and it served as a basis for several further methods.
• So, the task at hand was to somehow “make all those resisting people move from A to B”. Several models were created to define the steps we should go through to achieve this, which I collectively call the “N steps of change” models. The most well-known of them is probably Kotter’s 8 steps, but Lippitt’s 7 phases, Conner’s 8 steps of building commitment, Kanter-Stein-Jick’s 10 steps or the ADKAR model are all examples of the models that became well-known in the CM2.0 competition on “how many steps should it be then?”.

These “N steps” models all include good and effective change management techniques, however, there is something fundamentally wrong with them. Even if we assume that the original intention of the authors was not to make these steps linear, by calling them “steps” they create the (false) illusion that managing change means going through N universally definable steps in a linear sequence. One step at a time, and by the time we get done with the last step, change will "happen". This is how they got interpreted, this is how they are being used by many practitioners. They tend to be well received by business managers: they are simple and straightforward. The problem is that organizational change simply does not work this way because organizations are much more complex than that. We can not plan everything ahead (following any of the N steps) and then simply implement the action-plan because the reactions of people to certain interventions are not predictable. What we can and should do is to make certain intervention(s), then see the reaction of people and then plan the next intervention(s) accordingly. This is usually referred to as the iterative or agile approach to implementing change.

CHANGE MANAGEMENT 3.0 – “New wave methods”

The limitations of CM1.0 and 2.0 methods and the growing importance of change and transformation in the business world demanded new approaches. From the early 2000s, the work of innovative consultants and practitioners combined with the continuous development of the science of organizational change yielded several new methodologies. I call them collectively the “new wave” methods of change management:

• The whole “Agile” methodology
• Leandro Herrero’s Viral Change or “organizational social movements”
• Lean Change Management
• Organizational Network Analysis – applied to change management
• McKinsey’s Organizational Health model – applied to transformation and change management (12)
• Design Thinking / Organizational Design - applied to change management
• Appreciative Inquiry – applied to change management

These new methods offer fresh, innovative approaches to managing change, and although promoted by different consultants and positioned quite differently, they have some very important common features:  

• A positive approach to creating the right environment and conditions for people to engage with change (rather than focusing on “resistance management”).
• Iterative/emergent process (rather than following N linear steps).
• Close involvement of “users” i.e. the people who are affected by the change, starting at very early stages of the process (rather than top-down implementation). This is a key element of Agile's Scrum methodology, but Design Thinking’s first “Empathy” phase is serving the same purpose.
• More focus on the informal organization, the interactions of people within the “social network” of the organization (rather than managing via the formal organization). This is the key concept of Viral Change and Organizational Network Analysis, but a key element of the other methods as well.
• The increasing importance of ongoing, continuous change and the development of change capability (agility) as a key organizational competence.

Although clearly bringing “new life” to managing change, these CM3.0 methods also have some limitations:

• The most important is that they are promoted by different consultants with different backgrounds and viewpoints. Strategic consultants, management consultants, OD consultants, IT consultants, process consultants are all active in this space and suggest these methods to business leaders from different perspectives. The competition of consultants creates the impression that these approaches are alternatives to each other, the role of a business leader is to choose from them. By selecting one method, you lose the good components of the others.
• With Agile, specifically, the problem is that as it has become the new hype, many consultants want to “ride the wave” and it is becoming more and more abused. I know several companies where Agile (that should create a flexible, human-focused and innovative culture) was implemented in such a rigid way, that any ideas, suggestions to improve it was perceived as obstruction and was quickly suppressed by management in their attempt to be “very committed to Agile”. The reason is that Agile gets introduced more and more by consultants with very low skills in culture change management. The result is “agility” implemented as a system with new positions and new rules, but the culture is not changed adequately. Understandably such examples diminish the attractiveness of the whole Agile methodology.

 CHANGE MANAGEMENT 4.0

The following forces are shaping change management today: 

• We live in the VUCA world of Digital Transformation and Industry 4.0. Change is accelerated even further, the bar is raised even higher for leaders to drive change, change capability is becoming a crucial competitive capability and the demand continues to grow for effective, modern tools for managing change.
• At the same time, there is an increasing need to redefine the morals of business. The capitalist, share-holder value-driven mindset is seen as the main cause of destroying our environment and exhausting the resources of the Earth. The need to find the right PURPOSE, searching for our “WHY?” have become common leadership practices, but very often they are filled with well-sounding goals that lack a holistic view.
• Old school change management (CM 1.0 and 2.0) methods and myths still prevail. Many consultants and practitioners use the “the grief/change curve”, “resistance management as the main task”, the “N step methods” etc. In many cases, they are put into more modern forms, complemented with new methods, but they are still the same old concepts.
• The growing number of change consultants and internal change professionals combined with the complexity/uncertainty of change initiatives created a trend that leaders tend to delegate, or even “outsource” the responsibility for the success of change to internal or external change specialists.
• The science of organizational change is developing rapidly, and there is a growing demand for evidence-based approaches (7), (8).
• There is increasing criticism about change management and skepticism about its future (1), (2), (3), (4).
• The need to integrate all that is good, modern and works and put them under one umbrella (rather than create competition between the various approaches) is getting stronger (see e.g. Jason Little’s book (20) and his Lean Change Management “movement”)
• Digital technology, AI and analytics are shaping change management as well: the digital tools that support change management are being developed and used more and more. Just to mention two good examples: "The Changeshop" (www.thechangeshop.com) offers tools to monitor where people are in their mental, emotional and behavioral engagement with a certain change and offers various tools to improve commitment. "The Changecompass" (www.thechangecompass.com) is a change portfolio management and planning tool that monitors the portfolio of ongoing change initiatives in a company and helps decision making with data analysis and visualization.

 Based on all the above, I suggest that we renew change management in all five major aspects of it: Mindset, Toolset, Process, Organization, and Technology. We should define Change Management 4.0 with the following characteristics:

1.      MINDSET

• Change management should be defined as “the management discipline that is aimed at creating new value for organizations through change”. And in terms of the definition of value, we need to move away from “shareholder value” and apply a holistic view that is balanced between short term and long term and (really) considers all stakeholders: the whole society (including impact on the environment!!), people within the organization and shareholders. Regarding people in the organization, we should focus on the factors that truly represent value for them: maximizing their potential, connecting to others and live a meaningful life.
• In terms of people and change, instead of “resistance management”, we should adopt a positive mindset. Something like this: ?Although change can be difficult (especially changing old habits), people like progress and have a general desire to explore and change things to the better. Therefore our task as managers/leaders of change is to CREATE THE RIGHT ENVIRONMENT AND CONDITIONS in which people’s own motivation to maximize their potential, connect with others and live a meaningful life will result in change.” To provide a practical tool for this mindset I have introduced the “Six Conditions of Change” framework in (16).
• Instead of focusing on the “WHY NOT?” (resistance, difficulties, risks, obstacles), we should take a solution-focused approach and collaborate on “HOW YES?” (alternatives, out-of-box ideas, incremental next steps, etc.)

2.      TOOLSET

• Instead of competing for the title of the “best technique” of change management, we should integrate all proven methods and work from an integrated toolset applying the techniques that best serve the situation. We should leverage the fact that change management has been approached by professionals of very different disciplines and areas of experience: psychologists, therapists, academics, project managers, coaches, business leaders, management consultants, OD professionals, lean and agile specialists, etc. The result is a huge pool of thoughts and techniques. CM4.0 should be about screening them and building up a wide, integrated toolset. 
• At the same time, we must be self-critical and thoroughly revise our existing methods. The measure we should apply is whether a model/technique/methodology is based on evidence (7). We should embrace and adopt the latest results of science, and make sure that we leave old-school tools and myths behind. Many change professionals should apply change management principles to themselves: question status-quo, look for new ways and break away from limiting old habits.

3.      PROCESS

• We should see change as a continuous process and forget the “Unfreeze – Change – Refreeze” thinking. It means that we will not always have a detailed “specification” of the goal (end-state) of the change. We should be clear on the Purpose and then start moving in the right direction. Specifics of the goals and directions will emerge along the way.
• This approach requires a focus on the development of an organization’s change capability/agility (“Don’t just change them, teach them to change!”)
• We must apply an iterative (emergent, agile) process to change and forget the good old “N-steps”. Applying Agile terminology, we should conduct change in “sprints”, i.e. cycles of incremental progress. At the end of each cycle, progress is assessed and we re-plan priorities and actions for the next cycle. (With my clients am using the i-PACE change leadership cycle (17)).
• Change should be co-created by the whole organization. Early involvement of people in the design of the future and continuous involvement in the cycles of ongoing improvements must be an integral element of the process.

4. ORGANIZATION

It is commonly agreed that real change happens through people talking to each other and observing each other and not through “top-down implementation programs”. Instead of the formal organization, we should “spread” change by creating an optimized network of interactions with a good balance of the different forms of it:

• Optimize (redesign) and leverage formal interactions (meetings)
• Apply the needed organized interactions (workshops, trainings, focus-group discussions, etc.)
• Understand and tap into the network of informal interactions by identifying and engaging key opinion leaders (influencers).
• Foster self-organizing, cross-functional teams.

Another critical element of the right organization for CM4.0 is that leaders must “take back” ownership and responsibility for change from “Change Managers”, HR or change consultants. This responsibility cannot be outsourced, the “I tell you where we are going, and you make sure that people come along” type of division of work does not work. Change experts (internal or external) should continue playing a very important role in change management, but it should be the education, enabling and support of leaders in their role as Change Leaders and facilitating co-creation in the whole organization. We must have clear governance defining the right roles and providing the optimal balance between strategic decision making and empowered bottom-up actions.

5. TECHNOLOGY

• Change Management 4.0 should become the management discipline that is integrated with Digital Transformation (DT) and Industry 4.0, it should drive and serve well these developments of the business world. It means that CM4.0 professionals should understand, and at a minimum “speak the language” of DT and Industry 4.0.
• CM4.0 should use the most advanced tools and techniques of the digital world, most important being digital platforms, AI and analytics (13). We should apply “Blended Change Management” by complementing the classic, “off-line”, face-to-face techniques with digital tools and online activities. 

REFERENCES:

 (1) Leandro Herrero: “Change Management is Dead. Let’s Go and Have a Nice Funeral”. leandroherrero.com, February 2018

(2) David Mechels: “Change is Changing. Coping with the Death of Traditional Change Management” Forbes, 2019 April.

(3) Jason Little: “Change Management is Dead” Management30.com, March 2016.

(4) Marcus Chiu, Heather Salerno: “Changing Change Management. An Open Source Approach” Gartner, 2019

(5) Paul Gibbons: “The Science of Successful Organizational Change” Pearson Education, 2015.

(6) George Bonanno: "The other Side of Sadness: What the New Science of Bereavement Tells Us About Life After Loss", Basic Books, 2009. 

(7) Steven ten Have, Wouter ten Have, Anne-Bregje Huijsmans, and Maarten Otto: ?Reconsidering Change Management Applying Evidence-Based Insights in Change Management Practice” Routledge, 2017.

(8) L. Faeste, M.Reeves, K.Withaker: “The Science of Organizational Change” BCG, 2019.

(9) Prosci: “The history and future of change management” Prosci article.

(10) David J. Snowden, Mary E. Boone: “A Leader’s Framework for Decision Making” Harvard Business Review, November 2007.

(11) S.O.Lilienfeld, S.J.Lynn, J.Ruscio, B.L.Beyerstein: “50 Great Myths of Popular Psychology” Wiley-Blackwell, 2010.

(12) S.Keller, B.Schanninger: “ A Better Way to Lead Large-Scale Change” Mckinsey, July 2019.

(13) B.Ewenstein, W.Smith, A.Sologar: “Changing Change Management” McKinsey Digital, July 2015

(14) R.Todnem By: “Organizational Change Management: A Critical View”. Journal of Change Management, July 2005.

(15) T.Basford, B.Schaninger: “The Four Building Blocks of Change” McKinsey Quarterly, April 2016.

(16) László Eszes: “The Six Conditions of Change” LinkedIn, January 2019.

(17) László Eszes “The ‘i-PACE’ Process of Change Leadership” LinkedIn, Marc 2019.

(18) E.Lawson, C.Price: “The psychology of change management” McKinsey Quaterly, 2003.

(19) “Three Key Principles of Change Management” Forbesinsights, 2017

(20) Jason Little: “Lean Change Management: Innovative Practices for Managing Organizational Change” Happy Melly Express, 2014.