Organisations which master extreme change today will lead their industries tomorrow. This article suggests five activities to help your organisation better manage extreme change.
Much is being written about the chaos associated with the rise of the global economy and about the continuous and complex changes it is causing. These extreme changes can be incredibly difficult for organisations and people. Organisations whose names were “household words” are passing away—victims of extreme change. People are affected even more as the environment of continuous change makes job security a thing of the past. It should come as no surprise that Gallup is reporting low levels of engagement across the global workforce. 1 Think about the implications of low engagement for global productivity. Even worse, think about the implications for the work-life quality of millions.
By the phrase “extreme change” we are referring to disruptive change, of course, but also to any form of large scale, complex, change effort (or a series of them) that challenge the ability of the organisation to respond. Managing extreme change means more than surviving change once. It means developing the ability to get better at change over time—learning how to get better at managing an uncertain future.
We highlight engagement in this article not only because it enables performance improvement generally, but because we believe it enables extreme change. Multiple studies have suggested that a key reason why large-scale change efforts fail is because they are unable to engage the workforce in the change. Why is engaging the workforce so important? Because an engaged workforce is more likely to invest their energy, creativity, expertise, and discretionary time at just the right moment when they are most needed—during periods of extreme organisational change. Managing extreme change begins with managing workforce engagement.
What are the “lessons learned” about managing organisations and people during periods of extreme change? What actions can help organisations and people survive and thrive? What can organisations and people do to ensure that engagement and performance remain high in times of extreme change? In this article, we suggest some specific actions that may help your organisation (and you personally) better manage extreme change.
The set of actions we suggest are not comprehensive by any means and are not a stand-alone new approach to organisational change. Rather, they are a set of things that we believe in and have seen work in real life. We hope that they inspire more thinking, discussion, and experimentation.
We believe extreme change can and must be managed because the stakes are so high. More than that, we believe that extreme change (if managed well), can become fuel for continuous improvement—and truly set your organisation apart.
Organisations and Extreme Change
Organisations can manage extreme change, and even benefit from it. The goal is to create real competitive advantage by learning to manage extreme change better over time. While several actions can help, we will focus on a few actions we have seen make a real difference in managing change. Here are five suggestions that could help.
Integrate Change into Everything
We are frequently surprised at how often an organisation will ask for help in designing a “stand-alone” office to focus on leading change better. In our experience, these change offices are expensive and ineffective in the long-term. The ultimate goal of your organisation is not to create a high-performing change office, but to enable your organisation to perform change faster, better, and cheaper than its competitors. For this reason, we suggest that you view change not as a stand-alone activity but as part of normal business operations and integrate it into normal day-to-day work activities. A key action in accomplishing this is to give mid- and first-line leaders the authority and accountability to make needed changes as they arise and to align these changes with overall business strategy. Moving the decision authority for small-and medium-sized changes to the line has several advantages:
- It assures faster action on change initiatives,
- It engages mid-and first-line leaders and their teams by giving them real power to act on behalf of the organisation, and
- It relieves top management of the burden of having to approve small changes, thus providing them more time to focus on the largest and most important change-related issues.
Delegation is a wonderful asset in building engagement and in better managing extreme change. 2
Better Equip Front-line Leaders
Until recently, much emphasis has been placed on the C-suite’s role in extreme change and that role is important to be sure. However, data from Gallup 1, Bain & Company 3, The Wall Street Journal 4, McKinsey 5, and others is indicating that front-line leaders play a key role (perhaps the most important) in building and maintaining workforce engagement. For example, a study by Gallup found that frontline leaders account for up to 70 per cent of the variance on engagement 1. Simply put, great front-line leaders set the stage for managing extreme change.
However, in spite of the growing evidence of the importance of front-line leaders in creating and sustaining engagement, organisations have been slow to implement changes in how front-line leaders are developed. In our experience, leadership development activities for front-line leaders focus more on building business-relevant technical skills than on building relationship and talent development skills (two skills more relevant in building engagement and performance). Relationship-building is most important during periods of extreme change because of the fear and uncertainty the change can cause particularly in the early stages. Leaders who are able to quickly build relationships with their team are better positioned to establish the trust necessary to sustain high performance during extreme change.
Where relationship-building skills help leaders develop trust, talent-development skills help leaders engage people in change by reframing the change effort as an opportunity for enhanced workforce development. 6 Leaders with talent development skills are able to develop people even during moments of extreme change. These leaders can see the potential to develop people in every change effort. In fact, they help employees reframe extreme change from something difficult and threatening to a real opportunity for personal development.
Leaders that can move into environments of extreme change and quickly build personal relationships and identify opportunities for employee development are essential assets in every aspect of the business. Building training programmes that help leaders develop these two skills and integrating them into the overall leadership development programme can give your organisation a real advantage in managing extreme change.
Build Workforce Resilience
A common feature in environments of extreme change is high levels of workforce stress and anxiety. This may account for low levels of employee engagement and performance. A recent study of 500 organisations reporting over US$1 billion in revenue by the Harvard Business Review found that one way organisations can fight the rising pressures in their workforce is to take actions that increase organisational resilience. 7 Organisational resilience is defined as a set of personal skills and processes that enable individuals at all levels to reduce stress, to perform well under it, learn continuously, and keep their work and life responsibilities in harmony.
The central idea behind resilience is that organisations experiencing extreme change can create a foundation that helps employees build the capacity to not just survive extreme change but to emerge from it stronger and more engaged. Organisations that help employees learn to balance work and life responsibilities, maintain physical health, build new skills and expertise, and plan for the future outperform their competitors when they accomplish all of these things simultaneously. Specifically, resilient organisations experience lower turnover, less ill health, and an increase in employees’ creative drive and energy. Building a resilient workforce can help your organisation manage extreme change.
Ensure Continuous Learning from Change
As Professor Drucker noted, an ability to learn faster than competitors is a critical capability for any organisation. 8 This is particularly true for an organisation’s ability to continuously learn how to perform organisational change better. In our experience, the inability of organisations to learn from past change efforts is common, frustrates the workforce, and wastes time and resources.
Extreme change creates valuable new change-relevant knowledge of all kinds. But creating new knowledge is not enough. This knowledge must be used, shared, and remembered. To ensure this happens, organisations need formal processes that link learning and change. For example, when new knowledge is created, this knowledge must be identified, shared across the organisation and actively used. In addition, this information is recorded in a “change repertoire” which is a living database of internal best practices for leading change. Leaders constantly review, discuss, and implement relevant new knowledge as it emerges. New knowledge is used to revise change related training programmes and other pieces of the human resource (HR) system. In this way, the whole organisation learns to perform change better.
Focus on Higher Purpose
Studies have repeatedly shown that people are engaged by opportunities to make real and lasting changes in their organisations. However, people are at least as engaged by changes that help the larger world in some way. Examples include helping the environment, a disadvantaged group, or their country. Organisations that are able to link changes to a higher purpose are better able to maintain high levels of workforce engagement during extreme change.
Managing extreme change could be one of the most challenging things an organisation or an individual can do; but it is also one of the most rewarding. Extreme change is here to stay and it can and must be managed by our organisations and by ourselves. We have suggested five activities which, we believe, can help your organisation better manage extreme change. The organisations which master extreme change today will lead their industries tomorrow.
1 Gallup, 2013. Global Workforce study, http://www.gallup.com/services/178517/state-global-workplace.aspx.
2 O’ Reilly, C, Tushman, M, 2002. Winning Through Innovation: A Practical Guide to Leading Organizational Change and Renewal, Harvard Business School Press, Boston.
3 Kaufman, J, Markey, R, Burton, SD, Azzarello D, 2013. Who’s Responsible for Employee Engagement, Bain & Company http://www.bain.com/Images/BAIN_BRIEF_Who%27s_responsible_for_employee_engagement.pdf.
4 Rubenfire, A, 19 June 2014. Are You Spending Enough Time with Your Boss, The Wall Street Journal, https://blogs.wsj.com/atwork/2014/06/19/are-you-spending-enough-time-with-your-boss/.
5 De Smet, A, Mcgurk, M, Vinson, M, August 2009. Unlocking the Potential of Frontline Managers, McKinsey&Company, https://www.mckinsey.com/business-functions/organization/our-insights/unlocking-the-potential-of-frontline-managers.
6 McFarland, W, 2015. Creating Talent-enabled Change Leaders, The Public Manager.
7 Harvard Business Review, 2007. Analytic Services, Building Resilience from Disruption.
8 Drucker, PF, 2008. The Essential Drucker: The Best of Sixty Years of Peter Drucker’s Essential Writings on Management, HarperCollins, New York.
Ms Goldsworthy and Mr McFarland are co-authors of the award-winning book—Choosing Change: How Leaders and Organizations Drive Results One Person at a Time.
Copyright © 2018 Singapore Institute of Management