Monday, June 25, 2012

Embedding Change in Your Firm's Culture

Corporate culture is defined by the shared values and behavioral norms that determine how things get done within an organization. It's influence is pervasive, yet companies often attempt to change some aspect of their operations without considering the role of culture. That's typically a recipe for failure.

If you want to understand a firm's culture, don't look at what is written in terms of values, policies, procedures, or strategy. Look at behavior. Listen to what is said in conversation. See which metrics are emphasized. Culture is always expressed by what people do, and at a deeper level, by the factors that influence their behavior.

That's why change (in what people do) must always align with culture (what influences what they do). But most change efforts I've witnessed failed to connect the two and predictably fell short. Making the connection must go in one of two directions: (1) fitting the change to the current culture or (2) changing the culture to accommodate the change. 

Option number one is easier, although it may constrain making the depth of change that is needed. Kotter artfully describes this approach as endeavoring "to graft the new practices onto old roots while killing off the inconsistent pieces." To do this successfully, of course, you need to understand your culture to gauge how compatible the new practices will be. Most firms, however, have never really assessed their culture. 

Option number two is more difficult, but may be necessary--such as when severe marketplace changes force a radical rethinking of how you conduct your business. Kotter points out that culture change should not be a starting place for transforming practices, but the result of establishing new patterns of behavior and new ways of reinforcing those behaviors. In large part, culture is changed through experiences rather than by directive.

A few strategies for anchoring change in your corporate culture, with emphasis on the second option: 

Capitalize on your incremental success. Kotter found that new approaches tend to settle into the culture only after employees see that they work and are superior to the old methods. That's why you want to establish interim milestones that can be reached quickly and then share the positive results with employees (even in the face of inevitable setbacks).

Don't assume that people will simply notice. Keep in mind that many employees will enter the change process with anxiety or skepticism. They will be more prone to see shortcomings than successes. So you need to counter with whatever evidence you can find that the change is producing desirable outcomes. It helps, naturally, if you are appropriately measuring results. 

Talk it up. Conversation and stories play an important role in shaping culture. That's because what we most talk about reflects what we most care about. If I spent a few days in your office, I could learn much about your culture based solely on what I heard in conversation. So if you want to change the culture, you need to also take steps to change the conversation.

Some ideas: Open every internal meeting or conference call with a tip or comment related to the change (e.g., how "safety minutes" or "quality minutes" are part of the routine in many firms). Share specific stories about how the change is working in your firm or in other firms that have already made a similar change. Use multiple channels to get the word out. Be sure your leaders, in particular, are regularly talking about the change.

Just as what people most talk about reveals what most matters to them, I believe that the more people talk about something the more it will matter to them. That in turn shapes culture that influences behavior. So talk it up.  

Remember culture is ultimately defined locally. While we talk about "corporate" culture and recognize that many national and international companies have succeeded in creating a distinctive culture, in a practical sense culture is defined at the local level. Since culture is learned primarily by experience, those reinforcing experiences must be manifested where most employees live--the local office.

This obviously adds to the complexity of culture change. But the challenge is by no means insurmountable. If your firm has multiple offices, corporate leaders should focus on helping local leaders implement the change and the corresponding shift in culture. Equip local leaders with the tools and support they need to proceed in a relatively consistent manner across the organization. Have common talking points. Communicate with them regularly. Track local metrics. Stay involved with all offices. 

Lead by example. Effective leaders at all levels enable change and cultural alignment to happen. They not only talk about it but exemplify it by their own actions. That's the topic of my next post, the last in this series on corporate change. Hope you're finding this helpful.

Monday, June 18, 2012

Motivating Change Through Reinforcement

Companies don't change until people do. And what ultimately counts as change is doing things differently. It's behavior change.

As I've written in this space before, the best way to change employee behavior is through positive reinforcement. But most managers in our business struggle with both the concept and application of positive reinforcement. We assume that occasional financial rewards serve as reinforcement. We are sparing in praise and recognition. Too often, we provide little feedback at all.

Positive reinforcement is creating favorable consequences to increase targeted behaviors. To be effective, it should be valued by the recipient, contingent on performance, certain and immediate when the desired behavior occurs.

Change, on the other hand, often works in the opposite direction. It forces people out of their comfort zone. It's inconvenient. It creates uncertainty. The desired results are usually delayed. To achieve successful, lasting change, the leader is advised to interrupt the old "rewards loop" and find ways to reinforce new behaviors. A few tips on doing this: 

Follow the previous steps in the change process to set the stage. Giving employees a compelling reason for change, describing a desirable vision for the future, and actively engaging them in defining how things will be done differently all help create a positive environment for change. Indeed, these steps form the basis for a system of positive reinforcement related to the change.

For example, promoting employee engagement through the change process can be a powerful motivator. Giving employees a sense of contributing to something greater than their individual jobs and celebrating incremental success towards established goals can directly serve as positive reinforcers. 

Establish smaller, short-term goals. Stretch goals are popular in many companies, but behavioral research indicates that they do more to demotivate than motivate. The big problem is the sense that they're distant and out of reach. Better to define goals that can be reached every few weeks or so. That gives you more opportunities to apply positive reinforcement.

But don't small goals lead to small achievements? That hasn't been the experience of those companies that use frequent milestones to provide regular positive reinforcement. It's the series of small wins that lead to large victories (much as individual plays in a ball game). It is helpful, of course, to have the long-range vision in view. But measure progress in small increments. 

Use measurement and feedback. Going back to the sports analogy, do you think the scoreboard is just for the fans? No, players unquestionably benefit from knowing the score, how much time remains, the down and distance, the number of timeouts, etc. Measurement has the same performance advantages in the workplace. The challenge is coming up with effective performance metrics.

Keep in mind that the traditional operational metrics may not be that effective in reinforcing behaviors. Instead, I suggest new measures for new ways of doing things. For example, counting new behaviors (e.g., how often client expectations are benchmarked), measuring client satisfaction, tracking work process turnaround times, monitoring employee feedback on new procedures. Be sure to measure both behaviors and outcomes. 

Monitor your PNR. This stands for positive-to-negative ratio, a measure of how many positive interactions occur in your organization for every negative one. Obviously, your efforts to use positive reinforcement to motivate new behaviors will fall short if negativity prevails. Various studies have concluded that worker productivity (and human relationships in general) are greatly impacted by PNR. The goal should be at least a 5:1 ratio--five positive interactions for every negative one (but not more than 13:1, per Gallup).

How to track? Ask employees to keep score for a few days. Count the number of positive interactions compared to negative ones. There's no specific definition; it comes down to whether the employee experiences positive or negative emotions in those interactions. If you really want to be challenged, have your colleagues score the interactions they have with you. But be prepared to take your medicine with humility. 

Beware of inadvertent reinforcers. Positive and negative reinforcement is not just what managers do. There are many reinforcers--animate and inanimate--that influence behaviors. Many of these work at odds with the changes you're trying to make in your firm. And sometimes the misplaced reinforcement comes from firm leaders themselves.

Let's say your firm is implementing a new QA/QC process. You've established several goals and measures to support frequent positive reinforcement. But despite your best efforts, many employees seemingly refuse to follow the new procedures. Why? You conduct some root cause analysis to determine the cause.

What you find is that a number of unintended reinforcers are at work. Employees bypass the process because it saves time, because it adds cost to the project, because others aren't following the process, and because employees didn't like the process to begin with (they were not involved in its creation). Further, company management exacerbates the problem by seemingly placing greater emphasis on production than quality.

These are the kind of factors that are always present in any change effort. You will need to mitigate the ones you can and overwhelm the ones you can't eliminate by being persistent in your efforts to positively reinforce the targeted new behaviors.

For more on positive reinforcement from my previous posts, I encourage you to use the search bar on the right.

Monday, June 11, 2012

Getting Employees Involved in Change

If you're planning a substantial change in some aspect of how your firm does things, be sure to engage the experts--your employees. 

A common mistake companies make in corporate change efforts is telling employees what they need to do differently instead of asking them. That's a poor way to gain their commitment to the change. Plus it's unlikely that management can come up with specific solutions as good as what those who must ultimately implement them could do.

Not to suggest that firm leaders need to seek staff consensus before proceeding with change. They appropriately determine what must happen and why, in most cases. But the how is best left largely to those who are closest to what is being changed. At least they should be involved in designing the specifics of the change. Some guidelines to keep in mind: 

Solicit input from affected employees. Change is hardest when it is unilaterally imposed. Giving employees a voice empowers them to be contributors to change rather than victims of it. Whether you solicit feedback from every employee will depend on various factors, such as the type of change, the extent of its impact, or the practicality of polling everyone. Usually you can invite input in some fashion from all affected staff without unduly burdening the change process. Not all will contribute, of course, but at least they won't feel excluded.

Assemble a representative implementation team. While you may choose to seek input from everyone, you'll want a smaller group engaged in moving the change process forward. This implementation team should be fairly representative of the employees subject to the change, so that staff feel their interests are being considered in the process. You might even encourage employees to convey concerns and suggestions to the team member who they best identify with, much as a citizen would with his governmental representative.

Of course, this becomes more difficult the larger the firm and the more complex its organizational structure. But don't go overboard with the concept of representation. Keep in mind that the purpose is to unite the team in pursuit of a singular approach to change, not divide it into various competing perspectives. Which points to an important consideration in determining who will serve on this team: You want people who can work well together despite being independent thinkers and creative problem solvers. 

Remove structural barriers. Overcoming people's natural resistance to change is hard enough without encumbering the process with organizational hurdles. Such impediments always exists, and sometimes they can become insurmountable if not dealt with appropriately. Examples of change-inhibiting structural barriers include:
  • Organizational structures that promote competition rather than cooperation
  • Policies and procedures that conflict with new approaches
  • Failing to eliminate old ways of doing things so that employees don't have to change
  • Metrics that don't align with new goals or approaches
  • Managers or departments that don't support the change effort
Once you have prepared an implementation plan, spend time identifying structural barriers that will hamper success. Then determine how to eliminate or mitigate them. 

Sometimes removing structural barriers can be the most painful part of change. In fact, this often constitutes a moment of truth--a test of how serious firm leaders are about making the change. I've been involved in change efforts where leaders confused activity for progress,  failing to address the barriers that stood in the way of real success. Beware of cosmetic changes that fall short of addressing the root causes of obstacles. 

Secure adequate time commitments from team members. Change efforts take time and most, if not all, of that time will come from nonbillable labor hours. Most firms have the capacity--in terms of potentially available nonbillable time--to implement change initiatives, but the common failure to manage that time impedes progress. Successful corporate change cannot be achieved with leftover time.

I advise managing change initiatives like projects. There should be specific goals, milestones, tasks, assigned individuals, budgets, and measures. Once you've determined what needs to be done, don't stop short of determining how much time it will take. And whose time? Where is that time coming from? Assuming that you don't have people with excess time on their hands, you need to figure out how to shift responsibilities or offload work from team members.

As a corporate change leader, I sometimes had team members sign a contract committing a certain portion of their time to the change effort. Signing one's name to an agreement can give the assignment much greater weight than simply volunteering (leftover) time. We would assign an internal project number and track team members' time, as well as their meeting critical milestones. If someone failed to give the promised commitment to the effort, I would sometimes fire them from the team. 

Reward people for their contributions. As noted previously, change is hard work. For those who contribute to its success, there should be appropriate recognition and reward. Be sure to set intermediate milestones that can be reached every few months. Celebrate progress and acknowledge contributions. Many change efforts are vitally important to the firm's future, and those who make it work--including rank-and-file employees who exemplify the new approach to doing things--deserve kudos.

Next week, we'll explore the role of positive reinforcement in facilitating change. Since I've already dealt with this topic at length in previous posts, I'll focus particularly on its application to corporate change efforts.

Tuesday, June 5, 2012

Communicating Your Change Vision

The first step in the change process is to create a sense of urgency. The second, corresponding step is to create a sense of expectancy. Together, these comprise the proverbial stick and carrot. Employees are motivated both by the desire to avoid the consequences of not changing and to enjoy the benefits of making the change.

The Edict--"we have to change"--launches the change process. But it cannot sustain it. This is due in part to the fact that progress towards change lessens the sense of urgency over time. Plus, using the Edict to motivate change amounts to employing negative reinforcement, which tends to produce only compliant effort--doing the minimum necessary.

You need to give employees a clear vision of a positive outcome to sustain the change process. Sounds simple enough. Yet company leaders often stumble in communicating a vision that resonates with staff. Below are some tips for effectively presenting your change vision: 

Make sure your vision appeals to employees. Simply setting a vision isn't enough. It must be compelling to those you count on to make it happen. Consultant Kevin Eikenberry writes that vision others will embrace should have the following characteristics:
  • Positive--something others see as desirable
  • Personal--something that benefits them personally and directly
  • Possible--a destination people can see themselves reaching
  • Visual--something people can "see;" it's tangible, imaginable
  • Vivid--clear and specific; they will know when it's achieved
Engage employees in creating the vision. How do you know what will appeal to employees? Ask. Better yet, involve them (or a representative sample of them) in defining the change vision. Have them focus on how the change will benefit them personally, not just in terms of how it helps the company. Ideally the vision should be something they can get excited about. If they own it, they are much more likely to work hard towards accomplishing it.

Communicate it clearly. One of my routine talking points about communication is that success isn't defined in how well you send the message but how well it is received. Reception problems can result from numerous causes, but the biggest one is the fact that your audience suffers from too much communication. You have to break through the clutter to get your message across. 

While I've written on this topic before, I can't improve upon the list of pointers included in John Kotter's seminal book Leading Change
  • Simplicity. Eliminate jargon and "technicalese" so that the message is readily understood by all.
  • Metaphor, analogy, and example. Word pictures and stories help make your vision tangible and inspiring.
  • Multiple forums. Use varied channels for spreading the word--meetings, emails, newsletter, posters, etc.
  • Repetition. Because people are overloaded with information, you need to communicate the message many times to allow it to sink in.
  • Leadership by example. Enable people to see the vision in action, in addition to hearing about it. Plus if leaders act inconsistently with the message, it won't be believed.
  • Explanation of seeming inconsistencies. This is another potential strain on the credibility of your vision. An explanation may suffice, but you may also have to address real inconsistencies within the organization.
  • Give-and-take. Two-way communication is always more influential than one-way messaging.
Report on and celebrate progress. Vision is less powerful when it's perceived as off in the distance. Change often takes time to complete, but you can't keep people waiting to reap some kind of reward for their efforts. So it's important to define intermediate milestones that can be reached every few months or so. Make them significant and celebrate their achievement.

Don't underestimate the importance of keeping the message alive. With everything on their plates, employees can be surprisingly quick to dismiss change efforts that "go silent" for a period. You must keep them informed and encouraged that things are progressing as planned.

Perhaps the most critical juncture in any change process is when motives shift from "we need to do this" to "we really want to do this." That's the essential role that vision plays in effective corporate change.