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We live in a world of change. That’s nothing new. It’s always been so. And the only way to make sense of change is to plunge into it, move with it, and join the dance.
That’s not to say that change is easy or without risk. Most studies show a 60% to 70% failure rate for organizational change projects. That disheartening rate has stayed fairly constant since the early 1970s.
Fortunately, some smart practitioners have figured out how to beat the odds. One of them is Dr. Michael Canic. He’s president of Making Strategy Happen, a consulting firm that helps committed leaders transform ambition into strategy and strategy into reality.
A specialist in the psychology of human performance, Michael is author of Ruthless Consistency: How Leaders Execute Strategy, Implement Change, and Build Organizations That Win.
In this conversation, Michael explains how to create a compelling case for change, how to avoid common change “traps,” and how “doing less” can be a smart strategic move.
Rodger Dean Duncan: What are the keys to making a case for change that appeals to people’s heads, hearts, and hopes?
Michael Canic: The key to a compelling case for change is to articulate as stark a contrast as possible between pain and gain—the pain that will result from not changing versus the gain that will result from changing.
The reason for not just focusing on the gain is because pain is a more reliable predictor of change. For example, think of how a recession causes us to eliminate the waste we knew we should have eliminated long ago.
Here’s an example of a case for change:
If we don’t optimize our product portfolio in response to customers’ changing needs, then revenues and margins will continue to shrink, we will be viewed as yesterday’s company, and our future will be at risk.
If we optimize our product portfolio in response to customers’ changing needs, then revenues and margins will rebound, we will be viewed as a leading-edge company, and we will secure our foreseeable future.
After you create the contrast between pain and gain, position it as a management choice: Are we willing to not change and risk suffering the pain, or are we committed to changing to realize the gain? That decision will largely define management’s legacy.
Duncan: You cite four “poisons” that prevent organizations from embracing necessary change. What are those poisons, and what’s the antidote?
Canic: The first poison is complacency. It’s the narcotic that dulls the drive for change. Complacent organization drift into that comfortable state of “things are good enough.”
The second poison is arrogance. Similar to complacency, but with an extra shot of ego, it’s the smug feeling that you’re successful, you’re better than others, so why change?
Next is the fallacy of extrapolation, the persistent yet mistaken belief that present trends will continue into the future. Your customers love your products and your organization is growing. Why wouldn’t that continue?
The final poison is psychological inertia. This is the natural tendency to keep doing what you’ve been doing the way you’ve been doing it. It becomes mindless habit. You don’t even question it.
The antidote is to develop and communicate a compelling case for change, a case powerful enough to overcome those four poisons.
Duncan: “Do less!” is one of the approaches to business success that you recommend. What does that mean?
Canic: Every company tries to take on too much — too many strategies, too many initiatives, too many projects. The trap, when you’re an ambitious leader, is that you see the opportunities, the possibilities, and you become like the kid in the candy shop who grabs at everything.
Inevitably, when you take on too much, at least some of those things will fail. When that repeatedly happens you create an expectation and an acceptance of failure. Worse, you create a culture of failure because people learn that some things might get done, some might not, and that’s okay.
It’s far better to do less. Focus on the critical few, concentrate your efforts, and then expect results.
Duncan: Fear is often regarded as the number one disincentive to change. Why is that, and how can leaders create a “safe” environment for change?
Canic: People fear change because change brings uncertainty. It’s natural to think, Will I like this or not? Will I be good at this or not? Will I be more secure or less secure in my job? Will I have more status and authority or less?
To lessen uncertainty and reduce fear, it’s crucial that leaders overcommunicate during times of change. Not just what is changing, but how it will change and, most importantly, why. Answering “how” lets people know what to expect and how they will be supported. Answering “why” provides the context for change. And people are more likely to accept change when they understand the compelling case for change.
It’s equally important that leaders connect with their people at a human level. That means inviting, acknowledging and empathizing with their concerns. It also means taking appropriate action in response to those concerns. Finally it means projecting confidence that, collectively, you will figure it out and successfully navigate the change.
Duncan: What do you see as the difference between training and development, and what should leaders emphasize for their people?
Canic: Training is simply one method for developing knowledge and skills. Other methods include, for example, coaching, mentoring, job-shadowing, and peer advisory boards. Of course, there are also books, articles, webinars, podcasts as well as a range of delivery options for what we call training.
The goal is to develop your people. Once you’ve determined the knowledge and skills they require, the question to ask is, What are the most effective and efficient methods for imparting them? The answer may or may not include training.
Duncan: What role should coaching play in a leader’s day-to-day activity? Why?
Canic: Coaching is a mindset. Coaches take responsibility for the performance of their people. Coaches ask, What do I need to do to help my people perform at their best? And coaches recognize that different approaches have different effects on different team members at different times. If the goal is to continually elevate performance and results, then leaders should think of themselves as coaches, not just managers.
What does that look like in practice? First, coaches regularly provide performance-related feedback and guidance that is specific, meaningful and actionable. Next, they reinforce desired actions and outcomes, and hold people constructively accountable when actions and outcomes fail to meet expectations.
Sure, you want people who are capable and self-motivated. At the same time, an effective coach can elicit discretionary effort and enable people to over-achieve.
Duncan: Regarding the challenges of change, what lessons should leaders take from the Covid pandemic?
Canic: First, is the need to cultivate strategic agility. The ability, especially in volatile and uncertain situations, to forecast likely scenarios, make decisions, and take rapid action. Businesses need to develop and maintain that agility, even in non-pandemic times.
Next, is to openly question assumptions. Before the COVID pandemic, many companies resisted the practice of letting employees work from home thinking it was unmanageable and that productivity would suffer. Yet here we are and, for the most part, not only have leaders figured out how to manage remote workers, but research shows that those workers are generally more productive.
Finally, the COVID pandemic has shown that when we’re compelled to change, we can change. It again reinforces the importance of establishing and communicating a compelling case for change before the launch of any strategic initiative.
This column was first published by Forbes, where Dr. Duncan is a regular contributor.