Change management is becoming one of the most wanted soft skills an employee can develop. Still, only 30% of the transformations are successful. How are companies working to be better at it?
The only constant is change, though being able to quickly adapt to change is something different. In this age of rapid technological change and workforce challenges, companies need to get ready to change fast. Still, research from McKinsey and Company shows that 70% of all transformations fail.
The most successful companies in change management are the ones that can be both stable and dynamic, developing a common culture that helps everyone change at the same pace the customer does. Employee engagement is becoming crucial to achieving customer-centricity, the problem is how to adapt the company to these new demands. Yet, only 4 percent of companies across different industries, have to reach enterprise agility based on research by McKinsey (October 2018, Leading agile transformation: the new capabilities leaders need to build 21st-century organizations).
How are companies leading change? At the ASQ World Conference held in 2019 in Dallas, Texas, some companies shared some insights on how to deal with change. The following are the main trends shared by major international companies in different sectors:
- Top-down vs bottom-up
- Expert Training vs cross-functional capability building
- Focused on results vs focus on the why
- Leadership to manage vs leadership to buy-in
Top-down vs bottom-up change management
Companies usually see quality as a department, or a specific tool like Lean or Six Sigma, and not as an everybody’s job. The Northrop Grumman achieved a culture of excellence throughout the company by focusing on sustaining an improvement culture from the bottom-up, that is engaging every single employee to improve. They focused their cultural change not on a specific tool, but on specific behaviors they wanted to improve the quality of their products based on customer needs, like for example looking for data before making decisions, considering the customer expectations and being open to collaborate in teams. They started with cross-functional training. Usually, the people that received lean six sigma training were the engineers, so they made sure everybody was receiving it, from analysts to admins, maintenance, managers and specialists. the key was to empower the front-line employees with coaching to use the CI tools on the day to day activities.
Expert Training vs cross-functional capability building
You may know Tata Group as the developers of the NY Marathon App, a big Indian company with more than 700,000 employees. Being not only one company but a group of businesses, their main concern in regards to change management was keeping knowledge and sharing it across the entire group. In 2014 they detected the need to scale the knowledge the companies had when improving their processes, Tata created a repository of best practices shared by all of them. In 2018, there were 530+ practices created as a repository from 40+ Tata companies. These helped them engage employees, share knowledge across all the companies and drive performance and streamline processes. They started using cross-functional teams with the purpose to share best practices instead of experts through EDGE, a knowledge management portal. They use it to promoting best practices sharing, learning and sharing in a simple way. They also complemented it with webinars, consulting across companies, awards to the internal consultants, benchmarking studies, forums, an internal social network and access to online speakers once a week. The results were: improved processes, improved performance, peer recognition, development of leadership skills even for employees not being in leadership positions and increased collaboration.
Focused on results vs focus on the why
Agile Change management is well known in hi-tech companies, but what about traditional companies in the commodity business?
Sectors such as energy, chemicals, metals, and mining are still at an early pilot stage, slowly starting to show interest, mainly because of the fear of compromising safety, technical quality, and the management of risk. Change management done right can reduce risk, increase quality and improve decision making while improving also the employee experience.
The Brazilian commodity company Elektro realized that stable and predictable processes were no longer enough to sustain growth, change management should be part of the process too. The question was: How to implement a change management program that appeals to the employees when results were still the driving force? They realized that focusing first on the Why, that would be the purpose of the change, they would make it a personal purpose for the employees. This way they could build up commitment and engagement, because in the end, they were the ones that are closer to the customer or to the processes to make the required changes. To get from standard to excellence they needed employee collaboration, and they also needed leaders to change. Their main focus became to create a common purpose, work on the employee experience, stimulate self-development and communicate continuously. Still, they were able to measure results by saving on OPEX 8,5%, reduced capital expenditures by 4,7% and reduced man-hours by 4.8%.
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Leadership to manage resources vs leadership to buy-in and engage
A Hospital in Kentucky also emphasized focusing on bringing ideas from the bottom up, finding and sharing the why, and building capabilities, but also found out crucial involving the top the right way.
They identified that getting approval from the top executive was not the same as having their full support and engagement. Again, the same as Northrop Grumman, they realized training has to be for everyone, from executives to front-line employees. If the knowledge was so important, leaders could not be left aside. To boosting any of their initiatives, they focused on bringing on board a recognized influencer or consultant to ensure credibility, identifying the leaders more passionate to lead the effort and turn them ambassadors of the change and developing a plan together. To bring executives on board, they needed to showcase quick results. Therefore, they focused on involving finance in providing real results for the hospital purpose, which are quality and patient safety translated into bottom-line results, and organizing a board that could be updated regularly to show results, roles and responsibilities in daily management huddles. Visual management became crucial to ensure every team was moving in the right direction while sharing concerns and quick wins. They were able to identify more than 1500 ideas improvement and were able to capture a ROI of $6.4 M.
Employee upskilling and knowledge sharing
These new approaches to change management show the increasing importance of working on soft skills, upskilling employees and democratizing knowledge sharing. Other options include internal consulting assignments or deep dives, mentorships and reversed mentorships (younger employees train their leaders on digital tools), culture manuals instead of quality manuals and all types of blogs and informal knowledge sharing tools. Cultural development is becoming as important as product development, even in traditional companies. How is your company keeping up to date?
Luciana Paulise – Coach, book author and speaker
@lupaulise
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