Using change management and measurement to “thurvive”: The necessary components for organizations to thrive and survive
By Tara O’Neil
Adaptability
All species must adapt to worldly changes not only to survive, but in order to thrive. Darwin’s survival of the fittest theory expresses that it is not those that are the strongest or most intelligent that survive, but those able to adapt to changes in their environments. Organisms must adapt to endure environmental factors that are constantly changing-- and organizations are no different. Consider all the organizations that have a strategy involving innovation, becoming the largest in the industry, or providing exceptional service. Industry leaders excel at adapting to maintain top performance, but once that adaptability falters, it can mean quick destruction of reputations, organizational value, and workplace culture; making adaptability imperative to their success and survival.
The cold reality of it all is that change is hard and many of us struggle with just embracing change, let alone thriving in it. How many new year's resolutions, habit-breaking goals, or promises to significant partners of behavior change have you seen fail? Probably quite a few, and perhaps some of your own, even when there is a plan for that change. Since organizations are just a collection of humans put together in a system, the difficulty of successful change permeates through to our workplaces as well. That struggle of adaptability is best seen in all the data describing organizational change interventions. Studies have shown that approximately two-thirds of all change management initiatives fail (Shin, 2012; Choi, 2011), risking losses, employee turnover, and confidence in leadership.
Change management will only become increasingly more important in the coming years, with employment predicted to grow by 8.4 million jobs to 169.4 million jobs in 2028 and workers older than 65 staying in the workforce longer (Employment Projections: 2018-2028 Summary, 2019). With more jobs and more people to manage, and as the war for talent continues, organizations need to adapt, grow, and change with the market just to stay relevant. While many organizations have failed from poor change management, some have survived, and even fewer have thrived under constant change. Let us take a gander at some examples of change management failures and successes to identify key strategies successful companies have used to adapt.
Change Management Examples
One of the most famous failures of change management was the “New Coke” formula change that Coca Cola released in 1985. As Pepsi started climbing in sales, Coca Cola was determined to dominate the market and shift their formula to appeal to Pepsi drinkers as well. They did a series of focus groups, testing, reformulating, and the focus group ratings were overwhelming-- the New Coke formula was a hit! If all their measurements prior to releasing the new product were pointing towards a profit, why did their product fail so drastically that they discontinued the product and went back to the original formula less than three months later? They measured the wrong group. Their focus groups were filled with Pepsi drinkers, who were likely already more open to a new taste. By only getting their approval for the new product, they left out the majority of their market-- all their customers that regularly bought Coke! By excluding the majority of their stakeholders, their measures were incomplete. With better sampling, they could have avoided the profit loss and disruption to their revenue.
With all of the ways to do change management wrong, consider the ⅓ of the change management initiatives that succeed. A company that saw a need for organizational change, implemented it, and succeeded was Toyota. Toyota was falling behind American car manufacturers, and to stay competitive, they needed a change in their system. An engineer, Taiichi Ohno, noticed the inefficiency of storing large quantities of heavy equipment and raw materials just to move them again when they were needed. Ohno convinced his managers to switch to a more efficient just-in-time manufacturing system, where supplies and materials arrived right when they were needed to be used. The change fundamentally altered their supply chain processes, and developed this approach for supply chain management that organizations like Dell, McDonalds, Harley Davidson, and Apple use today (Kiger, 2016). Ohno and the managers were able to show the outcomes the organization would gain if the change was implemented. Unlike Coca Cola’s “New Coke” measurement blunder, Toyota used measurement appropriately to be the catalyst for their change.
Oh, and they made Ohno a Toyota executive.
Measurement before Change Management
The point is, you need correct measurements to show a positive outcome on your organization - if there was no organizational benefit, then what was the point? And more importantly, what’s the point of continuing to manage the change, which we already established is no small feat, if it makes no difference? First, before you can see if your change is effective, make sure that it’s worth putting in the effort. Evaluate what the expected changes to your organization will be. Is it a culture change you are after, or a change in a system or process? If you can’t measure it, and you don’t know how exactly it would change your organization, then assess if you want this change simply because you don’t like something, or because you think it would have a positive affect. If it is the latter, there’s most likely a way to measure it if you have the right resources.
Before you propose a change, get some metrics together. What is the organizational problem you are seeing? Collect some data to back up your case. Do the culture pulse surveys exhibit the problem you want to solve? Where is the data that shows the inventory bottleneck and how it affects the rest of the supply chain? If you don’t have data to back up the problem you believe is there, then you will have a difficult time rallying people behind this change, and an even larger problem showing if the change was effective.
Measurement after Change Management
Once you have the data that shows the problem, you need to demonstrate how your change will be observed in the data after the proposed intervention. Will the manufactured goods increase? When do you expect to see an organizational culture change, and how will you measure that the culture has shifted? For a change to be sustainable, first stakeholders need to see that it is worth the time, effort, and start-up costs, and that it makes their lives better. Essentially, show them ROI for all of their efforts.
Where change management successes set them apart from the failures is showing that the predicted returns are the actual returns. Maintaining measurement after the initial outcome data will demonstrate the continuous success of the program or intervention, and can give you an indication of areas that still need improvements or tweaking.
Other critical success factors
Although measurement is important for success, there are some other notable success factors you need to take into consideration. First is communication. Change is inevitable, but that doesn’t make it easy. In a survey on the necessary components of change management, an overwhelming majority of 65% of employees stated that communication is the most important when leading an organization through change (Park, 2016). Making sure the workforce is aware of this change and why it is happening is a large part of reducing workplace rumors. Being transparent goes a long way, and in the face of organizational change, employees deserve to know what is going to happen, how it will affect them, and how they are expected to work with and manage the change.
Communication is key, but it should be expanded not only to employees, but all stakeholders. Taking stakeholders into consideration and getting their buy-in is the second critical factor for success. If the change will affect the surrounding community, investors, upstream and downstream suppliers, then the organization needs to take steps to ensure that everyone understands the coming changes. Having this clear communication helps set expectations and buy-in from stakeholders that could otherwise reject the change and turn a good idea into another change management failure.
The third critical factor for success is recognizing when the change isn’t working, and having the courage to abandon the idea. No one wants to see a project they put so much time and effort into fail, but when the intervention simply doesn’t work or add value, there’s no sense to expending more time on it. Being adaptable is the ability to change in order to fit into new environments, but also recognizing and scrapping old ways that are hindering your ability to survive.
Essentially, you need to measure to set the stage for change and increase the odds of success. But being communicative, taking stakeholders into consideration, and being able to abandon ideas will set you up to thurvive.
Tara O'Neil is a second-year graduate student in the Industrial-Organizational Psychology and Human Resource Management (IOHRM) program, and is also pursuing an MBA. Before entering the IOHRM program, she received a Bachelor's degree in I/O Psychology from Marywood University in Scranton, Pennsylvania. She currently works with Dr. Denise Martz on research, as well as leads a team in HR Science's Research Team. Last summer, she worked in the People and Culture department at Pursuit in Glacier National Park as an HR intern. Click here for Tara's LinkedIn profile.
References
Choi, M. (2011). Employees’ attitudes toward organizational change: A literature review. Human Resource Management, 50, 479– 500.
Employment Projections: 2018-2028 Summary. (2019, September 4). Retrieved November 11, 2019, from https://www.bls.gov/news.release/ecopro.nr0.htm.
Kiger, D. (2016, February 22). Analyzing top examples of just in time inventory and production management. Retrieved November 11, 2019, from https://davidkigerinfo.wordpress.com/2016/02/22/analyzing-top-examples-of-just-in-time-inventory-and-production-management/.
Park, M. (2016, February 3). Where Change Management Fails. Retrieved November 11, 2019, from http://rh-us.mediaroom.com/2016-02-03-Where-Change-Management-Fails.
Shin, J., Taylor, M., & Seo, M. (2012). Resources for change: The relationships of organizational inducements and psychological resilience to employees’ attitudes and behaviors toward organizational change. Academy of Management Journal, 55, 727– 748.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the IOHRM program, Departments of Psychology and Management, Colleges of Arts and Sciences and Business, and Appalachian State University.