Organisational and Cultural Change Are Still Hot Topics

Recently back from the PACRIM Service Management Conference and about to depart for the itSMF New Zealand Conference I thought I would take the time in between to reflect on the themes coming out of the PACRIM Conference.

Above all else there was a focus on Organisational Change Management and changing the culture of the organisation.

Much reference was made to John Kotter’s 8 Steps for Leading Change. Kotter wrote his international best seller – Leading Change – in 1996 and it is just as relevant today as it was then – if not more so. His 30 years of research proved that 70% of all major change efforts in organisations fail and that the reason for that failure was the lack of a holistic approach to see the change through. The following 8 steps help organisations succeed in an ever-changing world.

1] Establish a Sense of Urgency

2] Form a Powerful Guiding Coalition

3] Create a Vision

4] Communicate that Vision

5] Empower Others to Act on the Vision

6] Plan for and Create Short-Term Wins

7] Consolidate Improvements and Keep the Momentum for Change Moving

8] Institutionalize the New Approaches

There was also a lot of reference to change lifecycles including the Kubler-Ross model, which is commonly known as the “five stages of grief”. Elizabeth Kubler-Ross was a doctor in Switzerland who wrote a book called “On Death and Dying” (1969) in which she included a cycle of emotional states that people with terminal illnesses go through. In ensuing years it was noticed that this emotional cycle was not exclusive to the terminally ill but also other people affected by bad news or being affected by change. It is now widely used to understand the stages that a person goes through when affected by change and therefore the ability to manage the change accordingly.

I will leave you to investigate further into Kotter’s and Kubler-Ross’s thinking and how it can help you on your change journey.

A while ago I wrote a Whitepaper regarding “Achieving Cultural Change” which you can read on “Our Resources – Free Downloads” section of the Macanta website.

Some of the key messages in that paper were engagement of staff, collaboration, coordination, clarity, communication and leadership.

A recent survey undertaken by McKinsey & Company (January 2010) supports the importance of these activities if change is to be successful.

The survey received responses from 2,512 executives representing the full range of regions, industries, functional specialties and seniority. The report states:

“We found evidence suggesting the importance of engaging employees throughout the company and throughout the transformation journey. Another major theme was the importance of building capabilities – particularly leadership capabilities – to maintain long-term organisational health. In addition, a focus on strengths and achievements not just problems, throughout the entire transformation process is strongly tied to success”. (McKinsey Global Survey – What Successful Transformations Share 2010).

75% of companies that were extremely successful in meeting their transformational goals broke down the process of the transformation into specific, clearly defined initiatives.

Employee engagement as early as the planning process emerged as a key success factor. Identifying underlying mindsets that would need to change was an approach most often used. 75% of respondents whose companies broke down their change process into clearly defined smaller initiatives and whose transformations were “extremely successful” said that staff members were entirely or very able to participate in shaping those initiatives. Collaboration and cocreation was important – nearly 25% of the extremely successful transformations were planned by groups of 50 or more.

Strong leadership and maintaining energy for change amongst employees were two principles of success that reinforced each other when executed well. When leaders ensure that their frontline staff members feel a sense of ownership, the results show a 70% success rate for transformations. When frontline employees take the initiative to drive change, transformations have a 71% success rate. When both principles are used, the success rate rises to 79%.

83% of all respondents said that their companies’ transformations focused wholly or in part on changing the organizations’ long-term health by building capabilities, changing mindsets or culture, or developing a capacity for continuous improvement. Transforming leadership capacity is particularly significant in transformations that succeeded in improving long-term health: 63% of executives who said their companies’ transformations had a significant impact on leadership capacity indicated that the transformation improved both short-term performance and long-term health.

When communications about an organisation’s transformation celebrate success as well as discuss reasons for change, the organisation tends to be more successful in driving the transformation than when communications focus solely on reasons for change. The McKinsey survey found that focusing on the positives early in the process—during the assessment of a company’s current position—also correlated strongly with success.

The McKinsey report concludes:

  • Companies that undertake transformational change have to succeed at the basics, such as creating clear, stretching targets and defining a clear structure. In addition, this survey suggests that the more companies also focus on their employees’ mind-sets and behaviour, the more successful they will be.
  • It can be hard to find time to pay attention to mind-sets and behaviour, given all the other work of transformation. Companies that focus on the few approaches this survey shows to be frequently tied to success can use their limited resources wisely.
  • Given the importance of collaboration across the whole organisation, leaders at companies starting a transformation should put a priority on finding efficient and scalable ways to engage employees.

It would therefore seem that leadership, clarity, communication, collaboration and coordination are still the keys to successful organisational change.

I will let you know what the themes coming out of the New Zealand conference are.

Karen Ferris is a Director at Macanta.

Macanta can help you with your organisational and cultural change. Contact us to find out how.

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