Effective Business Problem Solving Part Two –

Initiating Change

 By: Rich Kramarik

Strategic leadership is about looking to the future with the ability to see around corners, look through walls with x-ray vision, find the shine under the tarnish and use this information to chart the course of the company.  The CEO does this by making strategic decisions that will ensure a viable future for the business and by constantly tuning the organization to fit the current business environment. The resulting drivers are the solutions discussed last month in part one of Effective Problem Solving.  The biggest challenge, however, is not in identifying the correct solutions, but in convincing the employees that the changes required to implement these solutions are essential and manageable.

 Let’s face it – we all know it. Most people become comfortable in their surroundings and the natural tendency is to resist changing that comfort zone. The interesting challenge is that all of us react differently to change. Among the reasons we resist change are:  

• Fear of the unknown: This evokes many emotions and reactions, most commonly anxiety. It is okay to be anxious, but when your employees worry about things they can’t do anything about – that’s called stress.
• Fear of failure: No one wants to be a failure. No one wants to get fired for making a mistake.  Most employees just want to do their job and be safe.
• Difference of opinion: Employees often have different points of view.  They mostly just want to do their job and go home.  Employees are not normally thinking about company survival and changes required to beat the competition.
• Loss of power: All change creates loss for someone or of something. In this sense, some employees may be losing power and influence and therefore resist any change.
• Lack of Trust: If the employees don’t trust the CEO or company management, then there will be tremendous resistance to change.

 Knowing human nature, the effective CEO initiates change by addressing the employee resistance to change by using several possible strategies:

Company and Personal Advantage

Help the employees perceive the change as an improvement. Guide them to see the value by facilitating the identification, organization and interpretation of facts, opinions and or raw data surrounding the change. Have them work on looking at what ways the change improves the business success or the development and delivery of meaningful products and services. Show the employees how their role fits into the new organization and way of doing business.

Compatibility

Help the employees understand in what ways the change is consistent with past experiences, processes and/or present values. Review the ways the change enhances traditional methods and approaches. Have employees study how they can modify traditional methods to take advantage of new opportunities that will become available because of the change.

Complexity

Help the employees grasp how they can make the change easy to implement for themselves and for each other. Have employees show how the change will simplify complex work or processes. Have them work to discover how the change will make it easier for your clients to do business with your company.

Observability

The more visible the change, the more likely the adoption will be, so discover ways for how employees can provide opportunities for others to see how well the change is working.

Communication

It is necessary to build sufficient knowledge as well as change attitudes toward a new idea to influence the decision to adopt or reject a new idea. Most people are influenced by the opinions of friends and colleagues who have already accepted the changes. Lead, foster and allow communications on the change.  Encourage employees to adopt changes into their repertoire of methodologies and make sure that the employees who are ready for change get sufficient support to be successful and then give them the opportunity to model their success for others.

Time

People need time to understand new ideas, change attitudes and make a decision to accept the change. CEOs must accept that radical change does not happen over night. However, we must also make sure that we don’t put off for tomorrow what we can and must change today.

In his book, “Crossing the Chasm,” on the topic of sales and marketing, Geoffrey Moore talks about the different characteristics of buyers. He starts with the “early adopters” and works his way through to the “late majority.”  In a similar way, Everett M. Rogers published his “Diffusion of Innovations” theory which characterized the degree to which a person is open to change.  Knowing how a person is open to change can be a big help in initiating and accepting change. Everett Rogers talked about:

Innovators
Rogers says that innovators are the first 2.5 percent of the population to adopt new ideas. They are intellectual risk takers who are socially connected with other innovators. Innovators are daring and experimental and have the ability to understand and apply complex technical concepts while able to cope with a high degree of uncertainty.

Early Adopters

Early Adopters make up the next 13.5% of the population. They tend to be a more integrated part of the organization than the innovators. Friendships are often made and they are highly influential in developing similar opinions among their colleagues. They serve as a role model for their friends and colleagues since they are well respected by their peers. They are the embodiment of successful, discrete users of new ideas. They decrease uncertainty about a new idea by adopting it, and then convey subjective evaluation of the innovation to their peers through interpersonal networks.

The Early Majority

The Early Majority makes up the next 34% of the population and they usually adopt new ideas just before the average members of the organization. They interact frequently with their peers, and although they exercise less influence with peers they do provide interconnectedness in the organization's interpersonal networks. Members of the early majority take their time adopting new ideas. They follow with deliberate willingness in adopting innovations, but do not generally consider themselves agents of change.

The Late Majority

The Late Majority represents the next 34 percent of the population to adopt new ideas. They are likely to respond to increasing network pressures from peers, but they approach innovations with a skeptical and cautious air. The late majority does not adopt change until most others in their system have done so because they require the pressure of peers for motivation.

Resisters
The Resisters make up the last 16% of the population to adopt innovative changes. They influence few opinions and are often somewhat isolated. They usually make decisions based on what has been done previously and are suspicious of both innovations and change agents. Resisters often see themselves as having limited resources and they must be certain that a new idea will not fail before they can adopt it.

Everett Rogers' work suggests that change becomes self-sustaining when about 15 or 20 percent of an organization accepts it. Early adopters are the most influential agents for change because they have links to both the innovators and the more conservative groups. We might think that acceptance by the majority is an indicator that changes have been fully integrated, but the job isn't done until the resisters are won over.

In summary, human nature is to avoid change.  CEOs and management resist initiating change even when it’s in the best interest of the company.  There are several strategies that we can use to ease initiation and acceptance of change.  And, finally the CEO can target the innovators and early adopters to drive faster and more successful change.  This article highlighted the strategies and theories.  If you need help perfecting your ability to have your decisions accepted and implemented, call Paladin and Associates.

Effective Business Problem Solving – Initiating Change Case Study

By: Rich Kramarik

Since our businesses are people intensive, it should be no surprise that the place we see the most resistance to initiating change is dealing with the poor performing employee. 

 Company One:  The CEO’s administrative assistant had to be told every specific thing that needed to be completed.  If she wasn’t told, bank deposits didn’t get made, shipments didn’t get sent, copier toner didn’t get ordered, and phone messages didn’t get recorded.  The staff complained that the administrative assistant was hurting their productivity and customer satisfaction.  Clients told the CEO about troubling experiences with the assistant.  The CEO was so frustrated on some days that he was totally distracted away from his work.  But, he couldn’t initiate the change.  He couldn’t bring himself to release the assistant.  After several months of this “torture,” he asked for our help. 

He expressed his concern over making the change as one of how would the work get done if he released her.  It would take time to find a replacement and then more time to train the new person.  His view was all this would be harder than living with the poor performer.  We helped him put a plan in place to hire a new person for a related position who could over lap with the administrative assistant and learn her duties as well as the duties of the other position.  Then when the new person was trained, the administrative assistant could be released.  He felt comfortable enough with this plan that he tried it.  The problem was solved.  Change initiated by using the strategies in the main article of this news letter.

 Company Two:   The CEO needed a solid performing sales manager.  Sales were OK, but not as good as they should be when compared to the competition.  Company growth depended on a new spurt of sales growth.  To make a long story short, the CEO hired and released three sales managers over a period of a year.  She was now on her fourth.  She asked for our help. 

 The sales managers were never accepted by the rest of the staff.  They never really got the help and support of the rest of the company.  Clearly that was a two sided problem – everyone, the sales managers included, was being a bit thick headed.  Each sales manager the CEO hired was a decision made by the CEO alone.  The fourth sales manager didn’t make it either. 

 Before the CEO hired the next one we suggested getting the rest of the staff involved in the hiring decision.  The CEO had the staff discuss and decide market focus, review opportunity by market, discuss and decide what markets had the best long term opportunity, and more.  Then the CEO involved the key management and staff in the interview process and decision on which candidate to hire for the sales manager position.  Again, using the strategies from the main article of this newsletter, the CEO was able to find success in initiating change.  The next sales manager was accepted by the staff and everyone was rowing the boat in the same direction from the day the new sales manager was hired.

 Company Three:  Often initiating change has nothing to do with staffing.  In this example the CEO was a victim of what I call analysis paralysis.  The CEO never initiated a change because he just kept finding new alternatives or opportunities to study.  At one point I made a list of all the items under study by the company.  The list filled two pages.  This was clearly too diluted a focus.  The CEO was asking us how to get growth going again, because he could not see what was preventing company growth.  In a sense the CEO was using some of the strategies from the main article in this newsletter, but he was going overboard.  We helped him cut the two page list down to the three top priority items and got the CEO and the rest of the company focused on these three.  Within a short four months they were making decisions, implementing changes and found that lost growth. 

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            Bob De Contreras                                                  
            Rich Kramarik