It’s OK. Not Everyone will Make it through the Change

Change is really hard and human beings are generally not inclined to disrupt their status quo.? Once you’ve done everything you can to help them make the change, it’s ok to move on from people unwilling to adapt.

As we have discussed throughout this blog series, organizational change is incredibly difficult for organizations, leaders, and team members.? Organizations that do it well make it marginally easier to accept and adopt strategic changes, because they use a human-centered approach to understand change targets’ needs, wants, and desires, and then put solutions in place to help change targets through the changes.? Organizations that do not manage change effectively often deliver subpar results, because they fail to support change targets and as I heard from the commercial excellence leader of a major food service company recently, “if they don’t adopt the tool, give me their names, and I’ll take care of them.”

With that said, if you have used a human centered approach and followed the framework I outlined throughout this blog series that I summarized below to make the change process as simple as possible for change targets and people still won’t adopt the changes, then your organization can comfortably accept that not all people will make it through the change.? Here is a quick recap of my blogs to date on effective change that you can use as a guide for the process and a scorecard for your internal change team, before acknowledging people cannot make the change.? You and your organization ensure:

§? You used intent in planning the change and put an intentional change process in place to help change targets adopt the changes

§? Your CEO is the key sponsor of the changes and his senior leadership team supports the changes as well

§? Leaders at all levels of the organization understand the changes, support the changes, and agree to reinforce the changes with their people

§? The change plan is actionable, measurable, specific, and achievable

§? You included change targets in the change process, not only evaluating change related assets, but helping to define the changes using a true product management methodology

§? The change team assesses persona level needs and provides “customized” solutions for each persona group

§? You empathetically acknowledge that change is hard and do everything you can to help people adopt the changes

§? You openly communicate and make sure people have plenty of advanced awareness of the changes

§? You establish a deep and wide change network to put front-line champions in side-by-side with change targets

§? You train change targets about how their job changes, what they must do differently to perform effectively in their roles, and how they can excel using the changes

§? You measure progress at multiple levels and put intentional reinforcement techniques in place to ensure people struggling with the changes can get as close to adoption as possible

If you have done all these things and people still don’t want to adopt the changes or even worse become active resistors of the changes, it’s acceptable for you and the organization to acknowledge that they may not find themselves as part of the go-forward organization.

There are two ways that these departures occur:

1.?????? Resistors personally acknowledge that they are not interested in adopting the changes and the self-select out.? Usually when this happens, they demonstrate frustration in collaborative settings, openly discuss why the changes will not work, and use old methods or strategies to complete their job-related tasks.? All this occurs while they look for roles outside the organization and when they find the right opportunity, they self-select into alumni status.

2.?????? And often, they demonstrate the same behaviors I described above, managers get frustrated with their behaviors, and when the organization needs to fund the transformational efforts with some level of headcount reduction, they become easy targets for layoffs.? In the much more arduous and unfriendly fashion, their continued resistance becomes a performance issue, they find themselves on a performance improvement plan, and they get exited when it becomes clear that they cannot or do not want to perform in the new normal.

Let us look at an organization that managed this type of departure scenario exceptionally well and another that did not manage it quite as well.

Story 1: High Adoption with Natural Attrition

A large CPG organization recognized an opportunity to put better tools in the hands of their contact center agents, so they could start to track the lifetime relationship of a customer.? They assessed customer relationship management options and landed on Salesforce, a pretty significant change from their home grown database the technical team built for them years prior to storing customer data.? When they initially selected Salesforce as the tool of choice, they made an improper assumption that Salesforce’s intuitive UI and tooling would make adoption simple.? As the effort to stand up the tool continued and they collected user feedback, the contact center leadership quickly became nervous about training needs of their agents and called their training department to support the development of agent training.

In the initial meeting, contact center leadership laid out their expectations and insisted that every agent go through at least 8 hours of classroom training, as they have done with previous changes in the past.? The training team asked a lot of good questions and asked for the opportunity to present alternative options and even test some of those options with the agents themselves, as they target for this major technology shift.? Begrudgingly, the contact center leadership gave the learning team the space to assess the needs and determine the best training approach for the transition from a home-grown CRM to Salesforce.

I won’t tell all the details of the discovery and planning work, but in the spirit of the blog’s topic, the contact center leadership team loved the discovery research and the recommendations, in large part because it created less down time for agents and significantly less shifting of schedules to make the training work. ?The agents ended up completing 1-hour of in-person training, coupled with 1 hour of required lab training, across 30 days before go-live, so they could schedule it based on specific business and agent needs.? To augment any potential knowledge and performance gaps, the training team built a large data based of in-app help, all using SFDC native tools like Knowledge and built prompts into Chatter to allow agents to ping their managers and peers in real-time for help.? The solution proved highly successful in building the knowledge and on Day 1, 94% of agents logged in and performed a customer interaction in Salesforce.? The week one pulse survey revealed a 93% approval rate for the preparation and by the end of week 1, all agents used Salesforce for their customer interactions.

Naturally, some agents disliked Salesforce and wanted to continue to use the home-grown solution.? Against the recommendation of the learning and technology team, the Contact Center leadership elected to keep the old CRM active and available for 90 days, which delayed the ultimate success of the Salesforce implementation, but that decision to keep the system active gave the leadership team the data they needed to easily identify their biggest detractors.? And in the end, 95% of agents decided to use the new system, 4% of the agents decided to leave the organization voluntarily for other hourly roles outside of contact centers, and 1% remained detractors.? When the organization needed to cut headcount and asked the Contact Center for recommendations of who to let go, they had easy decisions, based on the 1% who refused to perform their jobs using the new system.

Losing people, particularly for a loyal organization like this one certainly was not easy, but the leaders didn’t have to struggle with the decisions, nor did they have to convince the people that they exited that they might enjoy working for another organization more than their current organization.

Story 2: Low Adoption, Sustained Poor Financial Performance, Multiple Layoffs

A large retail organization decided to change their store layouts, which had massive impacts on people, process, and technology across their retail footprint.? They built a multi-layered change plan that addressed the needs of leaders at all levels of the organization, but did not consider the impacts on the store employees themselves.? I will not bore you with the details of all of their mistakes, but in the end, despite great results in the stores that made changes to their layouts from a revenue perspective, they decided to stop the investment and never completed layout changes in 80% of their stores.

As performance diminished across the network, and the board started asking hard questions about the investment dollars and lack of ROI, they had to make tough choices about how to pay back the organization for the cost of layout changes.? With no documented successes in the stores that invested in heavy capital changes to move departments around and put sample layouts in the stores for easy customer envisioning, the board could not justify continued investments.? Since large capital investments increased depreciation expense, they needed to offset that increase in depreciation somehow and headcount is always an easy answer for cost reductions.

Poor investment decisions, coupled with increasing costs forced the organization to have its first layoff in company history in 2011 and that was later followed by more layoffs every six months, because the company has never fully recovered.? Today, the company remains viable, but a shell of itself, before it lost great talent as layoffs commenced and created cultural issues for many years to follow.

In this situation, the company made a ton of bad decisions other than the lack of a documented change strategy, poorly designed layouts, no process change, integration of useless technology, and many other mistakes that contributed to the performance issues, but at the core, they failed to address their high performers throughout the process.? As a result, many of the high performers took roles in other companies, because they no longer trusted the organization to provide life-long careers as they had many years prior.? As an organization, you never want your top performers to leave when you make tough decisions like layoffs, but many high performers make decisions like this, because they know they will be valued at other organizations as well.? That then leaves a middling population of employees and sadly the organization in this story has never recovered from these poor decisions, with a large population of middle performers remaining, unable to find roles at other higher performing organizations.

So how do you manage reductions in force with grace, dignity, and simplicity?

I do not take this topic lightly – affecting the lives of your team members proves incredibly difficult and most leaders hope they never find themselves in a situation where they must make tough decisions about associates’ jobs.? Unfortunately, though, the harsh reality of corporate America centers on a balance between upfront investment, real costs, and return for your shareholders.? And often, when these debates occur, organizations elect to eliminate headcount cost, rather than selling assets, spinning off profitable business units, or rationalizing bad historical technology investments, because frankly, it’s easier to eliminate people.

The best organizations I have ever seen manage headcount reductions to offset people, process, and technology investments follow the approach below:

1.?????? Assess the true ROI upfront and assume conservative returns from the beginning.? This enables a true investment picture that allows business leaders to predict future-focused cost structures and allow natural attrition to take hold, before having to make tough headcount decisions to offset investment costs.? Too many organizations get above their skis when they see initial returns and that leads to bad decision making on the back side.

2.?????? Predict cost reduction needs based on conservative estimates and allow surprises in performance to save people’s jobs, rather than reduce people’s jobs.? At the end of the day, it is very expensive to replace people, with many HR trade associations estimating the replacement of a human costs 2x their salary and that assumes easy transition for the new person into the role.? The reality is that companies always underestimate the cost of attrition and assume they can get new people up to speed quickly, but the knowledge capital, time to proficiency for the new employees, and relationships that exist for departing employees (with colleagues and customers), it’s important to focus on retention from the start.

3.?????? Communicate potential changes as early as possible.? Employees like to understand changes, why the organization needs to make changes, and the value to them as employees.? When they do not have that information (as mentioned in the communications blog), employees create their own narratives and often, your top performers elect to believe narratives above possibilities outside the organization.? The employees that remain typically perform on average levels and you lose the innovation and creativity required to perform in the new normal.

4.?????? Train folks whose jobs fundamentally change.? I know you all are starting to see the same themes I shared above, but in full transparency, it works.? ?If you communicate, train, and reinforce, you will see great results.

5.?????? Adjust performance expectations to match the new outcomes and reward those that succeed in making the changes.? I know it sounds simple, but I see too many organizations change how they operate and expect different things from their people, but they reward the old behaviors.? If you do not change incentives, people won’t change.

I know in many of my blogs, I make these changes sound so simple.? If you do X, you will get Y, and many of you are saying we did all these things and still didn’t get the outcomes we wanted to see.? That is the reality of change…flexibility and adaptability are hyper critical to the success of the program.? If you read the tea leaves and look for productive ways to reinforce behavior expectations, you’ll see results,? If you sit back and hope for the best, you’ll fall prey to the retailer I mentioned earlier in the blog and have to lay off your under performers which in turn builds distrust in your high performers.? Do not let your organization fall prey to a slow ride to mediocrity and invest in the change process from the beginning.? And when you reach that point where you have truly done everything you can, don’t allow departures of your mediocre performers to worry you; focus on your high performers.

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

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