Organizational Change Management's 3 Key Ingredients

Jan 30, 2007, 16:16 As organizational change sweeps across the business landscape, expert leadership skills are required to answer this question: What organizational change management methods consistently meets or exceeds the desired profitable results? To find out, I uncovered what organizational change management leaders did who planned and implemented $10-million - $1-billion in profit improvement. I discovered highly profitable organizational change leadership always uses three key ingredients. Note: If any ingredient is missing or done poorly, then even the best plans fail to achieve the desired financial results from organizational change.

My 3-ingredient model for all highly profitable organizational change management is the following: Ingredient 1: Leading the Organizational Change Ingredient 2: Handling Employee Who Resist Aca,!aEURoe or Undermine Aca,!aEURoe Organizational Change Ingredient 3: Managing Your Emotions & Actions as You Lead Organizational Change

Leaders at some of AmericaAca,!a,,cs best-run companies used my 3-ingredient model to produce successful organizational change. These organizations include IBM, Harley-Davidson, Intuit, Robert Mondavi Corporation, Outback Steakhouse, Ritz-Carlton, Excell Global Services, VF Corporation, and Washington Mutual.

1st INGREDIENT = LEADING THE ORGANIZATIONAL CHANGE

Leading profitable organizational change requires four key actions.

Action 1: Fit Your Organizational Change into Your Corporate Culture

I found the only organizational changes that improve profits are those that fit into the companyAca,!a,,cs culture. Brilliant changes that do not fit into your organizational culture will fail to achieve your desired financial results.

Action 2: Creating A Big, Exciting Vision for Your Organization

A companyAca,!a,,cs real vision is not the clichAf(C)-loaded mission statement adorning the companyAca,!a,,cs lobby. Instead, a companyAca,!a,,cs vision is a huge, compelling goal the organization aims to accomplish. For example, Ritz-Carlton Hotel CompanyAca,!a,,cs vision is the following: Our key goal is to be the premier worldwide provider of luxury travel and hospitality products and services. IntuitAca,!a,,cs big, exciting vision is this: Our key goal is to revolutionize the way people do financial work.

Action 3: Goal-Setting to Implement Changes

Goal-setting forms the steps that create the staircase leading to successful organizational change. Employees need measurable targets with deadline dates.

Action 4: Teamwork to Produce Profitable Organizational Change

Leaders of organizational change need to get employees to use teamwork plus interdepartmental collaboration. For instance, at Egghead.com, the large company that sells technology products and services, president and COO Jeffrey Sheahan and CEO Jerry Kaplan cleverly package four meetings each week to assure teamwork and goal achievement. First is a lunch meeting of EggheadAca,!a,,cs top five executives to discuss strategy. Second is the Aca,!A"5 - 15 ReportAca,!? from each manager which Sheahan reads to see how the manager is progressing on measurable goals. Third is the meeting of all middle managers where each manager announces how he or she is doing at achieving measurable goals. Fourth is a 20-minute Aca,!A"SocialAca,!? for all employees; at this stand-up meeting Aca,!aEURoe no sitting allowed! Aca,!aEURoe ice cream and cake are served as employees publicly praise colleagues who accomplished wonderful things.

2nd INGREDIENT = HANDLING EMPLOYEES WHO RESIST Aca,!aEURoe OR UNDERMINE Aca,!aEURoe CHANGE

Surveys of executives reveal organizational changes often fail due to people problems. People problems include Aca,!A"R-n-RAca,!?: Resistance and Rebellion.

Once I received loads of TV and print media coverage when I delivered a speech at a national conference in which I declared, "The major emotional reaction of employees during organizational change is that they feel like their spouse or lover just walked out on them!Aca,!? That statement summarized the shocking zing of betrayal practically everyone has felt for various reasons. Resistant and rebellious employees feel betrayed by their company making changes.

Prescriptions to manage the people problems include over-communicating reasons for change, Aca,!A"de-employingAca,!? employees who stop adding financial value, incentive pay, peer pressure to Aca,!A"get with the program,Aca,!? and celebrating successes.

Another bottom line concern is this: Employees who did fine before the change may do poorly after the change is implemented. I call them Aca,!A"old-styleAca,!? and Aca,!A"new-styleAca,!? employees.Aca,!? Here are vital differences:

Old-Style Employees Works in 1 department Solo work Likes receiving direction Prefers to be told what to do Focus: Seniority & experience

New-Style Employees

Interdepartmental

Teamwork

Likes independence

Prefers shared leadership

Focus: Updating & expanding skills

During an organizational change management seminar and action planning meeting I conducted at one company, an executive stood and dramatically announced: Aca,!A"As our company makes major organizational changes, we always seek to cure the wounded. But, we will shoot the dissenters.Aca,!?

Every manager in attendance sat in shocked silence for a few moments. Then, they all burst out laughing as they acknowledged the wisdom of what they heard. Some resistant employees need to be Aca,!A"de-employed.Aca,!? After all, a companyAca,!a,,cs purpose is to grow and prosper -- not transform rebellious employees.

3rd INGREDIENT = MANAGE YOUR EMOTIONS & ACTIONS AS YOU LEAD ORGANIZATIONAL CHANGE

It is waste when managers use many great techniques to lead change -- but ignore something incredibly important: How they manage their emotions and attitudes.

To learn more about this, I conducted unique research. I had leaders of highly profitable organizational change fill-out my Aca,!A"Abilities & Behavior ForecasterAcaEURzcAca,!? pre-employment test.

My research revealed these magnificently successful leaders scored amazingly high on four of the Aca,!A"ForecasterAcaEURzc TestAca,!? scales, namely, Optimism, Teamwork, Creativity, and Intelligence.

The fact that astounding leaders in AmericaAca,!a,,cs best-run companies are very optimistic, teamwork-focused and creative implies attitudes are contagious. These stellar organizational change leaders are role models. Employees detect and imitate their leadersAca,!a,,c behaviors and attitudes. This, in turn, helps leaders implement highly profitable organizational change.

A,(C) Copyright 2007 Michael Mercer, Ph.D.

Michael Mercer, Ph.D., is a consultant, speaker, and founder of The Mercer Group, Inc. in Barrington, Illinois, USA. He created Aca,!A"ForecasterAcaEURzc Tests,Aca,!? which are pre-employment tests used by many companies to help them hire the best. He authored 5 books, including Aca,!A"Absolutely Fabulous Organizational ChangeAcaEURzcAca,!? and also Aca,!A"Hire the Best -- & Avoid the RestAcaEURzc.Aca,!? You can obtain his free 15-page Special Report on Aca,!A"Dynamic Leadership TacticsAca,!? plus subscribe to his free Management Newsletter at http://www.DrMercer.com


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