Making Major Organizational Changes

Making Major Organizational Changes

The Best Laid Plans of CEOs and Subcontractors Will Undergo a Stress Test

Change is hard. Major organizational changes usually start strong, but they soon lose momentum and cause stress, sowing chaos in the ranks. They can ruin a company, even as it’s being retooled for success.

Some statistics say that long-term organizational change has only a 25% chance of success. It can also be personally risky: a third of CEOs fired by their Boards of Directors were let go for mismanaged organizational change.

We all fear change.

But change is vital. A company that refuses to adapt to changing circumstances is doomed to failure.

If you want to succeed, you need to plan ahead, focus on potential setbacks, and have everyone—employees, clients, customers, shareholders—on deck and operating at peak proficiency. Keep in mind that every single person involved in the transformation of your company has evolved to fear change.

Fearing Change

Your brain wants to avoid threats and seek rewards, which usually works out pretty well for us. Unfortunately, necessary organizational changes register as not only threats with your employees, but as existential threats, because they can affect access to resources—for example, a paycheck. Workplace changes almost always cause fear and stress.

The fear and stress of change isn’t something most people can consciously control. Even if your staff supports a much-needed corporate overhaul, the necessary changes to routine can throw at least some of the team off their productivity.

Once this negative process begins to happen, it’s difficult to derail.

On a personal level, stress causes a hormonal cascade that affects performance in two ways. For about five days, stress increases your work performance, accuracy, memory, strength, and endurance. However, as the body fatigues and stress hormones build up, a person becomes “stressed out,” which can cause mood swings, the inability to concentrate, and even long-term medical problems, like heart disease and diabetes.

Stressed out?

The Yerkes-Dodson Bell Curve graphs how stress affect the average worker. Performance improves for a short time, and then drops off. (Image courtesy Wikimedia Commons)

This is a major reason why organizational changes fail. If your people can’t perform, neither can your company.

Planning for Stressful Situations
Before you begin your journey of organizational transformation, consider DICE.

The best way to avoid stress is to plan for change by identifying where problems are likely to occur and focusing efforts accordingly. The Boston Consulting Group came up with a useful framework for making those predictions.

DICE stands for the four factors that BCG considers key: Duration, Integrity, Commitment, and Effort. Management assigns a score to each criterion, then plugs them into an equation (D + [2 x I] + [2 x C1] + C2 + E) to determine the probability of success. Although this is an admittedly subjective exercise, it works by anticipating where problems will arise.

  • Duration: The longer change is expected to take, the more difficult it will be to do successfully. Longer tasks cause more stress, and may require more frequent milestones.
  • Integrity: The team assigned to make changes will have flaws. Perhaps they are overworked, under-skilled, or freelancers who are less vested in the company.
  • Commitment: Top managers have to truly believe that change is necessary and that the planned processes will work. If not, they’ll subconsciously undermine efforts, even if they don’t mean to do so.
  • Effort: You must determine how busy the team members will be in implementing changes. If they also need to carry a full workload during the transition, they’ll have less time and energy to make necessary changes.

No honest assessment of expectations will yield a perfect score for every aspect of your planned organizational changes. Don’t let that stop you! This tool will help you focus on the right amount of time and resources in order to get the best possible results.

Going Fast or Slow
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Breaking up major organizational changes into gradual, incremental modifications are much less likely to cause stress for customers, clients, and employees. However, major changes—despite the discomfort they inevitably cause—are, sometimes, the only thing that will keep your corporation popular and profitable.

Look at the cases of two iconic social media companies: Twitter and Facebook.

Facebook was founded in 2004. Twitter was founded in 2006. Twitter arguably had the better launch pad, but today, Facebook has close to 2 billion users and generates US$10 billion in profit annually. Twitter has only 328 million users and continues to lose money.

While both companies have made changes over the years, Facebook went through a transformational period from about 2009 to 2011. The collective outrage against Facebook’s major overhauls was legendary. Now-beloved features like the real-time News Feed (2009), Timeline (2010), and the cover design (2011) all met enormous resistance. There was so much resistance that investors were worried about a mass defection to Google+.

That didn’t happen. CEO Mark Zuckerberg weathered each public outcry without flinching, and he has been richly rewarded for his risks. Since then, however, with the exception of Messenger (2014), changes to Facebook have been introduced incrementally, generating the occasional bemused round of complaints, but nothing that threatens the brand.

On the other hand, former Twitter CEO, Dick Costolo (2010–2015), was notoriously resistant to change. His managers had proposed increasing the character limit on tweets, charging corporations, that used Twitter, as an advertising platform, and other changes. Perhaps because he was spooked by the reaction to Facebook’s dramatic changes, Costolo refused.

It wasn’t until September 2017 that the current Twitter CEO, Jack Dorsey, announced the first major change to Twitter since its inception by doubling the character limit for tweets to 280. Some users have complained, but no one suggested changing to another platform.

Will this turn around Twitter’s profitability problem? Probably not in and of itself, but this newfound willingness to commit to major, platform-transforming modernization could begin a round of fearless, major organizational changes that might make all the difference.

Keeping People Happy and Productive

If you were asking your employees to run a 5K, you would supply water and snacks, right? Wouldn’t you anticipate that some of your employees would be unable to run the entire 5K? Some would walk, or give up entirely. You might even arrange for a company car to pick them up along the race route.

Unless you work in fitness, it would never occur to you to measure their value as employees by their ability to run a 5K. It’s great to be in shape, sure, but you can be an excellent accountant without a gym membership.

When you ask your workers, clients, and customers to go through a major organizational change, you are asking them to undergo a much more grueling mental and physical challenge than a 5K race. Everyone handles stress differently, and some of your people, even your best people, are not going to be able to handle these organizational changes gracefully.

Those folks may make it more difficult for your calmer, cooler staff to function at their peak performance.

So make a corporate plan to identify and address stress. Watch for signs of long-term anxiety: fatigue, irritability, loss of focus, headaches, weight change. Talk to employees that you suspect are suffering in silence.

Some companies temporarily relax their work-at-home and flex-time policies. Others actively encourage everyone to take evenings and weekends off, even (especially) if your corporate culture usually rewards round-the-clock accessibility. Encourage exercise and other healthy habits, while discouraging multitasking.

Keep your company as calm and routine as possible during the transition period. Human beings are not delicate; your staff doesn’t need to be coddled. But if you want them to do well, help them to feel well.

Upheaval is unavoidable, but you and your organization can and will get through it, to come out far better on the other side.

2017-11-20T05:26:06+00:00 By |Categories: Career, Communication, Development, Psychology, Uncategorized|