26th May 2020 | Nicolas Biltgen
This project explores a new approach to change management to enable better value for people.
“The measure of intelligence is the ability to change”
To a certain extent, I agree with this quote, attributed to Einstein, not because it is from a man recognised as a genius, but because it seems to make sense. There is a qualifying aspect in that sentence, as the ability to change is sometimes hindered by other aspects: values, beliefs, culture or simply discomfort.
Since its inception, one key element of my company’s success has been its ability to adapt, influence and even anticipate changes in its market and those of its customers. This allowed the company to offer to its customers the cutting-edge solutions they needed to succeed in their markets.
As we are entering a new era for software consumption, the need for transformation and its frequency is increasing exponentially to stay ahead of the pack. Looking at what is happening in our market, it’s even our survival which is at stake: our customers need more flexibility, easy and fast solutions to implement in order to cope with their own market’s transformation. Although best-in-class solutions and business good practices remain our key assets, we can’t continue to provide these solutions at the same speed as we used to.
Even for a transformational company, this acceleration is putting a huge strain on the company organisation and its employees. The way the company has been implementing changes seems no longer able to cope with the new trend: employees used to cope with the change impact because, at the end of the day, they were working for an undisputed market leader; the current mutation exposes us to a new competitive market in which the company is not yet the undisputed leader we used to be. Therefore, when our customers are confronted with too much change, there are many more options offered to them on the market.
In the last few years, the company lost more valuable people to the competition than before; that attrition rate of value is not sustainable. I believe we must also transform the way we manage change by putting people at the centre of the change approach, their engagement driving the desired outcome.
To illustrate my point, I took on the management of the French License Management team on the first of January this year . The team mission is to protect our Intellectual Property, ensuring that customers are compliant with the usage rights acquired in their contracts; we also support them in the management of their contractual estate. In the past three years, this activity has been conducted in a very aggressive way with the objective to maximise revenue out of it; this caused a lot of damage to our customer relationships.
Our board decided to change our approach, launching a “Customer for life” programme; this programme includes a huge organisational change for all the license management teams which has an impact on their compensation model, lowering significantly the potential bonus pay-out for them.
The change was decided mostly by listening to the customer voice and with very little consideration given to the internal people impacted, although this group was and still is an important contributor to our revenue. This led first to revenue loss but most importantly to people with great experience leaving either the team or the company.
This is one example among others, which led me to think that there is an urgency to improve our way of managing change in order to mitigate such a negative impact on people.
Terms of reference
Change is an integral part of our lives: from birth, every moment of anyone’s life is a moment of change. When we learn how to walk, speak, write, be an adult, be a parent, deal with the death of friends and relatives, we are experiencing change. Yet, despite that continuous process of change, in the main human beings are looking for stability in their lives: staying close to where they were born, keeping the same job regardless of their motivation, keeping the same framework in their company and for their role in that company.
As a result of the changes they experience, people go through the various waves of the SARA Model as described by Rogel (2010): they feel shocked, then angered before they show resistance and finally accept the change.
Looking at change in companies, we can see that process is a cause of loss of energy, time, money and, in most case, valuable assets, as employees who feel unappreciated by the company they have served for many years are leaving. This raises a question on the approaches and models used to implement these changes. Furthermore, it motivates me to try to create a new change model and approach that would at least lessen the waves in the curve of acceptance, if not suppress them.
Among the top ten reasons for change rejection as stated by Rosabeth Moss Kanter (2018), is the feeling that the change was prepared in secret; hence the feeling that people subject to the change are not considered. What if change could be people-centred? What if the ultimate objective of the change becomes a result, or even better, a by-product of a people-centric change model rather than the main focus?
Since as a manager and a leader, the main part of my job is to manage change and maintain people’s motivation, I truly believe that achieving this project will help me become an inspiring leader for my team and among the company leadership; furthermore, because one key element of SAP’s success since its inception has been its ability to adapt, influence and even anticipate changes in its market, and since the need to transform is accelerating, putting a huge strain on the company organisation and its employees, I believe that any progress in our change management approach will provide huge value to the organisation.
The way to achieve impact mitigation of the grieving curve is by applying to any change management model a continuous feedback gathering and improvement loop.
My ultimate aim is to define a new change model which would eliminate or substantially lessen the impact of the SARA Model wave. As we are a transformational company, change is an integral part of a majority of employees and managers’ experience on a day-to-day basis. The company mindset is driven by the obligation to adapt to our market and our customers’ expectations in order to remain the world leader that we have been over the last four decades: customer satisfaction and loyalty are paramount to our success.
However, I observed that change management is managed solely by focusing on the outcome, creating a lot of frustration within the teams concerned. Among other negative impacts, this approach generates employee demotivation and as a result, we have valuable employees leaving the company. Ultimately, the outcome is in opposition with the objective pursued with these changes, as there are very negative impacts on our customer satisfaction.
I have the conviction that my research matters to our company since it would serve the higher company purpose to have “customers for life” whilst preserving the most valuable asset we have to reach that goal, our employees.
Since I’m eager to have a practical impact with my project, I’m aiming to have several outcomes:
- Create a sense of awareness from management that the current approach to change needs to be modified
- Establish a new change approach, if not a model
- Include that approach in the managers and leaders’ training
To achieve my objectives, I have to designed my research questions around four groups:
- Data gathering interviews with leaders
- Data gathering interviews with individual contributors
- Definition of the model
- Dissemination of the model
My research group includes company executives, the change management group, co-workers and team members, and also people from other companies.
I reviewed several models in books and journal articles, which finally led me to base my literature review on Cohen, Allan R, Bradford, David L (2005) and Kotter (2014). This decision is based on the fact that all models evolve around the same guiding principles:
- Create a sense of urgency around the change
- Gather a group of people who will help you to implement the change
- Implement and monitor the change
When I approached the literature review, I felt that I needed to anchor this review to a practical case. The case I selected is the situation I’m involved in. As our customers expressed a very strong rejection of our approach to intellectual property protection (audit & compliance), which was seen as a way to force business from them when genuine sales fell, our board decided to change the organisation and governance of the teams in charge of it. As I manage the team in charge of this task for France, I’m at the same time undertaking and undergoing this change.
That change consists of the following main elements:
- Strict separation from the sales organisation; a new board area has been created for this purpose.
- No financial incentives or compensation on the transactions which are issued from the intellectual property protection.
- Definition and implementation of a global framework for audit processes, shared across all countries.
The first element is genuinely beneficial to everyone: we are now part of a global organisation, enabling us to benefit from global resources and also providing us with opportunities to work on a larger scope than before.
On the other hand, the two other elements impact internal people directly: we lose the benefit of having a sales commission plan – no more over-achievement on objectives sanctioned by a significant bonus – and we are restricted by the new process in the tasks we are allowed to perform for customers.
The goals and motivations for that change are quite clear; it also makes sense for customers and is aligned with our willingness to take care of customers.
In his book, Accelerate (Kotter 2014), John Kotter states that the first accelerator of change is to create a sense of urgency around a Big Opportunity. This Big Opportunity being a situation which “… is both rational in light of available data and emotionally compelling to people inside the organisation. It draws on both the heart and the mind”.
The main point here is the emotional anchor that the Big Opportunity must have; this anchor also implies that the opportunity has to be positive for the people impacted, for those who will have to implement and live the change. If that is not the case, people will be left with a very negative emotion and this will result in a high level of resistance to the changes.
To some extent it can turn the Big Opportunity into a Big Failure due to people resisting or large numbers leaving the organisation; in most cases, it will require the mobilisation of many more resources to achieve the transformation.
If I look at the case I have described, the Big Opportunity was to re-establish our customer relations; moreover, to create a “Customer for Life” relationship. For sure, it is an opportunity that can’t be qualified as negative. Although, on closer examination, it was sending several messages to various groups within the company.
First, to the salespeople, the messaging conveyed also that they were not doing a proper job in the past to create a sustainable relationship with their customers. I can agree that this interpretation is quite debatable and also that it has a very marginal impact on the change.
Then, to the teams in charge of the intellectual property protection, the messaging conveyed was extremely negative: they held primary responsibility for the deterioration of the customer relations, their work and position must be limited and controlled (ie, you are so bad at what you do that we need to micromanage your tasks) and, last but not least, you definitely do not deserve to be paid a sales bonus despite the constant and large stream of revenue brought in year on year at the price of long hours.
Even if the teams in charge of this role are mostly very seasoned senior people, very few managed to deflect this wave of criticism; most of the population just stopped working as hard as before and adopted a “I can’t care less” attitude which required a huge effort from the management, top to first line, to overcome the effect. In the process, 15% of that group either left the company or changed position, creating a loss of knowledge and experience for this activity.
Furthermore, as pointed out by Rosabeth Moss Kanter (2018), it created a ripple effect between sales and compliance teams. The sales side seeing the compliance team disengaged, assessed rapidly the impact on their achievements as the compliance team was bringing revenue to the sales. The compliance team almost stopped collaborating with sales as there was by “law” a clear separation between their work and the sales work.
In their article “The influence model: using reciprocity and exchange to get what you need”, Cohen et al (2005), describe a model that in a situation where you are aware of a pre-existing resistance or you ask something that might be costly to a group, you are able to set the stage to establish a common ground of collaboration. This simple six-step model (Figure 1), addresses two aspects that I would like to explore:
First, the diagnosis of the world of the other person. I believe that, in any interaction and in any change, to have a clear understanding of what are the context, belief, drivers, motivations and fears of the person or group you are dealing with is key. In a corporate world it does include the measurement and reward of that person or that group, but not only this. The need for recognition and the drivers of that recognition are also key even if not material. Then, there is the identification of the relevant currency to deal with this person or this group. In other words what do you offer to them in the relationship?
As this model is primarily designed to address influence when you don’t have any authority on the person or group you want to establish a work relationship with, I need to put it in the context of a corporate change, decided at board level: ie, with a clear and undisputed authority.
I think that setting aside the authority one has is the key. Let’s assume that this is not the first resort to get things done: what if the board had analysed the world of the sales and compliance teams to assess what their motives are? I have no doubt that the importance of recognition and compensation would have been identified.
This approach seems to be a better way to build an opportunity that would first allow the company to reach its objective, and then maximise the adherence of the people impacted.
I have to point out two aspects which are not so positive: the definition of the currency and the scalability of the model. The definition of the currencies of both parties drives the need of an exchange rate; this creates the need to monitor that exchange rate on a continuous basis, in order to make sure that the trade you put in place is still valid and creates value for the other party. I think that this aspect needs to be adapted to deal with a universal currency that doesn’t require quantification: mutual satisfaction. In other words, when both are happy with exchange, it doesn’t really matter what the value of the goods or services exchange is.
The scalability of this model is also questionable when you have to address multiple groups of hundreds of people; the assessment of the world of the other is fairly easy at group level , still quite easy to assess at a sub-group level, yet becomes a huge problem when you have to consider every individual aspiration. Furthermore, at a global scale, you will be faced with ethnographic aspects such as social organisation, culture, religions….
The two models (Figure 2 below) I have analysed have advantages and potential risks or issues. In both cases, the human factor is the cause of the possible issues: not considered sufficiently to create the big opportunity will lead to issues and the difficulty to consider individual aspirations in a large-scale change.
I have been reflecting on the topic of change from the moment we addressed it during my Master’s course. What triggered my reflection was the considerable difference between the group and myself when we were asked to describe on a graph (Figure 3) our reaction to change.
Every one of my cohort fellows drew a curve, more or less in the form of a wave, starting from under O (red line), going over and back to around zero; on the opposite, I drew a straight line starting close to zero and going up (blue line).
In the debrief, it was clear that the way we processed change was completely different: a threat versus an opportunity. The first reflection I had on this was to consider that I was thriving in uncertain environments when most people dread this kind of environment. It is probably true, but I wanted to dig deeper into that topic, as I thought that, if I could share my interpretation of change, then it would bring them comfort and ultimately more efficiency in the implementation of change for my company.
This was the “real” beginning of my journey in this project. Then I started to review several models for change management in books and journal articles. I focused my review on Cohen , Allan R.; B radford, David L. (2005) and Kotter (Kotter 2014).
This decision is based on the fact that all models evolve around the same guiding principles (see the literature review above). During my readings and reflections, I found an article from Rosabeth Moss Kanter (2018) , in which she lists the ten reasons why people resist change. It struck me, that out of ten, seven of these reasons are linked to people’s emotions.
This particular article, reinforced my thinking and structure my reflection around the following question:
What if we build the changes around people? The goal of the change will then become a by-product of that change.
The other area I needed to probe in order to understand people’s reactions and perception of change is the cultural context. If I look at the definition of ethnography provided by M Hammersley (2018), this is probably a key element to manage to reach my goal and answer the question above. He discusses important recurring variables in society. My scope will be limited to the corporate environments.
This led me to two other important questions:
In a corporate world, to what extent do we consider these cultural variables when trying to increase the performance of a whole company? What is the impact of not considering these variables?
To capture the relevant data, in order to try to respond to these questions, I planned interviews with the stakeholders I selected to be my research group.
For my research group, I selected:
- Individual contributors of my team, impacted by the transformation of our part of the organisation
- Peers, first-line managers, not necessarily impacted by the same change, yet definitely in charge of implementing any change to their teams
- Top management of my market unit, accountable for the country performance whilst aligning with global guidelines and policies
- Top management of my organisation, regional and global level, some of them in charge of the design for the change and some others rolling it out
- HR regional head, one of their roles being to monitor change and its impacts
- Top transformation projects team, the change management designers, also in charge of defining a change-management framework,
- External top managers, to get an outside view, giving me another perspective from an ethnographic standpoint.
In my original list, I was aiming to enrol the board member in charge of my organisation; the timing wasn’t right for him and he directed me to the Top project’s transformation team, part of his staff. Even if I expected it, it was kind of a disappointment to me.
This study is more than my assignment to get my grade, it is two-and-a-half years of my life during which I engaged in a daring challenge: expand my vision and ways of considering my environment, challenge my practices as a manager, and rise to the challenge of trying to change leadership to create more value for our employees, shareholders and customers.
I adopted a semi-structured interview type, as described by Sandy Q Qu and John Dumay (2011). They state that the semi-structured format is flexible, accessible and intelligible. Moreover, the semi structured interview is capable of disclosing important and often hidden facets of human and organisational behaviour. This is exactly what I wanted to achieve with my interviews.
I also noticed that the main theme of my project, change, has the astonishing power to put people on their guard. The main element which demonstrated that to me was that every single one of my participants, regardless to their seniority or level in the organisation started by telling me that they were not sure what I expected nor whether they could provide “good answers”.
This is where adopting a coaching approach helped, specifically in describing as clearly as possible my expectations, which were to get their feedbacks based on their understanding of the questions. During the interviews, I noticed several types of body language suggesting either comfort, discomfort or detachment from the moment.
Again, adopting a coaching approach during the interviews helped me either to maintain the comfort or to turn discomfort into comfort; for instance, as mentioned before, by clarifying my intentions and expectations.
The interview with the Top Project group allowed me access to the change framework which added a new data source to my data collection journey and also a group I can reach out to when it will be time to disseminate my work.
Data analysis and results
I conducted my data analysis using thematic analysis; the main reason for this choice is that thematic analysis is flexible and rather simple, especially for those new in qualitative research, which is my case (Braun & Clarke 2006).
To define my theme from my data collection I used a light approach of quantitative research by analysing my interview minutes through a word cloud (figure 4).
Based on my data set, I have seen the following themes emerge:
- Change: the perception of the change is greatly modified by the way it is communicated; as stated by one of my participants: “The target of the change is changing the perception: we will work with 50% of the workforce or we will work differently and more efficiently.”
- Transformation: When you conduct changes, you probably aim to improve outcomes or some key indicators such as profitability. It will have an impact on people, yet their framework will stay quite stable. When you conduct transformation, you’re creating something new and you don’t have to keep anything from the as-Is situation.
- People: Allowing the time to consider all the stakeholders affected by the change appears to be key. This is especially true when the change is a transformation.
- Communication: You need to align your actions with the communication. There are a lot of actions and communications yet, looking at the situation around us, there is a disconnection on what is really achieved.
- Management: the difference in viewpoint between top management versus first-line management, whether the outcome is in line with the initial objective or not, is a key factor to consider.
During my journey, I discovered several elements which I believe to be key to finally finding a way to mitigate the negative impact of change on people.
The first one is about me: my processing of change is first based on a strong sense of self, an understanding of others’ perception of the situation and, most and foremost, a vision of what is a satisfactory outcome in a generic currency.
The second one is about the people I have met during this study: my research group, my fellow students, and friends and other colleagues. They are generally not resistant to change; they are only reacting to the feeling that they are not considered as they would have liked in the design and implementation of the change.
The third and last one is about my aim: I started this study with the ambition to create a new model of change management – one centred on people, which would not generate the grieving curve impact on people that the other models are generating. I realised that my aim should be to find a way to overcome the negative impact of these models on individuals’ motivations, rather than add one more change model to the shelf.
This change of aim also brings another advantage: it can be applied to any model of methodology in place to manage change; therefore, it facilitates adoption as the effort needed is minimal.
The way to achieve impact mitigation of the grieving curve is by applying to any change management model a continuous feedback-gathering and improvement loop. Feedback gathering is based on interviews with the people impacted by the change on the current state of the change design and implementation. The interview consists of three stages:
Stage one – carry out a synthetic presentation of the status of the change; this can also be done by presenting the differences in the progress from the last interview to save time.
Stage two – gather feedback with only two simple questions: “What do you think?” and “What would you do differently?”.
Stage 3 – each feedback needs to be recorded, acknowledged and analysed; the decision made on the feedback, either to take it into the change or not, needs to be presented with the explanation of the decision.
The improvement loop consists of the modification of the change based on the feedbacks incorporated into the change as presented in stage 3.
By doing so, I believe that it will help people to develop a sense of self, as they will feel considered; it will also help people to develop a better understanding of other perceptions, especially the management driving the change. This feedback and improvement loop needs to be applied continuously along the change design and implementation. For instance, as with the Kotter eight-step model (Figure 5), where the feedback gathering, and improvement loop has to be applied at each step, not only between them.
Applying this approach will, of course, take some time and effort in addition to what was planned for the change. Yet, most of the investment of time and resources is at the beginning, as it will onboard people a lot faster than any traditional approach. Therefore, you will get more resources helping you and fewer people fighting against the change.
This approach also requires a minimum level of openness from the people you will include in the feedback and improvement loop. If you have too much opposition in the feedbacks, you should consider revisiting the opportunity you are targeting as it is probable that it’s either not a real opportunity or that you will lose too many people in the process.
This approach also supposes that the top management who initiated the programme are ready to share a lot of details on the objectives of the change, if not all the details. It may prove to be a problem on changes which are linked to strategic goals involving high levels of confidentiality.
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