Recent Gartner Group studies on change programmes suggest that as many as 85% of them fail to deliver results executives expected. In most cases, the underlying issues were not the wrong supplier decisions or technology, but the fact that the organisational culture / people issues weren't addressed.
If you are responsible for making change happen - whether on a small scale (eg changing working processes to fit in with new IT systems) or larger scale organisational change, it's therefore fairly important that you gain the full commitment of all stakeholders and 'users' - not just lip service compliance.
In this article we introduce the Change Equation - a simple, but highly effective tool that we have found works for a wide variety of our clients, including senior directors and project managers.
Developed by Beckhard and Harris the Change Equation is an immediately useful tool that:
- Is easy to understand
- forces you to ask serious questions about the likelihood of success of the project
- helps you prioritise actions
- provides a common language for the team leading the change
- provides an influencing logical flow when you are communicating or presenting the project
Background
In recent years, many "change projects" have been driven by technology implementations or upgrades (SAP, CRM systems etc) with business processes and working practices being changed to fit in with the new system.
In today's turbulent economy, however, change is just as likely to be driven by something else: a new competitor entering the market, a layer of middle management being made redundant or the acquisition of another company.
Successfully implementing these types of change is no small task. We are reminded of an old proverb:
"A vision without a plan
is just a dream. A plan without a vision is just drudgery. But a
vision with a plan can change the world."
From our experience using the change equation is a quick but effective way of ensuring that your team, customers and stakeholders really understand why change is necessary, why your proposed "future" state will be better, and what they need to do about it now! With all of this is in place, you will greatly improve the chances that your change will be successful.
Explaining the Change Equation
Richard Beckhard and Rubin Harris first published their change equation in 1977 in "Organizational Transitions: Managing Complex Change", and it's still useful today. It states that for change to happen successfully, the following statement must be true:
D x V x F>R
Dissatisfaction x Vision x First Steps> Resistance to Change
D = Dissatisfaction with how things are now (or how it might become if no change happens)
V = Vision of what's possible (tangible and concrete)
F = First steps that can be taken towards achieving the vision
R = Resistance to the change (monetary, psychological, etc.)
So the idea is that the product (multiplication) of DV and F must be greater than the overall resistance to change. So if any of the 3 components are close to zero, then it's unlikely that the change will be able to overcome the resistance.
Let's look at each element of the equation in a little more detail….
DISSATISFACTION: Your team has to feel some pain with the current situation before a successful change can take place. Without this, no one will likely feel very motivated to change.Dissatisfaction could include competition pressures ("We're losing market share") or workplace pressures ("Our order processing software is crashing at least once a week"). Dissatisfaction can be any factor that makes people uncomfortable with the current situation.
How many times have you been in the situation where you're trying to get something done, get a new process or system implemented, get rid of outdated tools or maybe even something like lose some weight and then it just ends up falling by the wayside.
One possibility for the failure is that the dissatisfaction for the current situation either isn't very strong or doesn't really exist.
This happens a lot in corporate environments where there's a 'company' mandate to get something done, but there's never an explanation for why the status quo is a problem…in short, there's not a pressing need for the change to occur and eventually the initiative will either die a quiet death or get escalated with more urgency.
This also of course comes into play if you're trying to sell a solution to a customer. You know your product is better, you know and can communicate the long term benefits and you know and can communicate exactly how they could implement your solution. However, if it turns out the prospects really don't mind the current situation; you are never going to close the sale. This is exactly what's covered in Spin Selling, a great sales book by Neil Rackham http://www.amazon.co.uk/SPIN-selling-Neil-Rackham/dp/0566076896
Top Tip: If key stakeholders don't see the currentpain, maybe they will be open to a discussion of the future pain if they don't change things. Discussions around the "impact of doing nothing" are useful here….
VISION: When you're trying to change, you are changing to something, but unless you can paint an extremely clear picture of an end result that everyone can understand and buy into, you will not have support and more than likely the initiative will fail.
A detailed vision that people can believe is important is so that you have everyone that's impacted pulling in the same direction. If everyone is clear on what the outcome is, then they can start actively finding better ways to solve problems to get there.
It's hard to get excited or make tangible progress towards a goal that is fuzzy. A goal of 'Make More Money' might be exciting, but it's not specific and because it's not specific it's not credible. Does it mean make an extra £10 per week or £10,000 per week? My commitment level would be different for those two scenarios and non-existent without some clarity.
Finally, without a compelling vision you aren't giving anyone a reason to take action. You might be in pain and you might know what steps you can take for action, but without having a destination, it will be very easy to get off course and lose your way. This is like the really smart person that hates their job, but they don't really know what they want to do…so they stay in a job they hate because it's not possible to overcome the resistance to changing without a viable vision of where they're going!
Top Tip: Make sure you understand the business vision as the technical deliverables - what are the measurable business targets as a result of the project? If your immediate clients don't know this, then go and find out from the right business executive…
FIRST STEPS: Everyone involved in the change must be convinced that the change is realistic and executable.
This is where a lot of change initiatives get bogged down. You're dissatisfied with what you've got going on, you are excited about a clear and tangible vision for the future, but you have no idea how to make that vision happen.
Everyone knows someone that would like to lose weight. The problem most run into is that it's not clear how to actually make that happen. They see success stories so they know it can be done, but without having a clear idea of how to start (one that they believe will actually work) the whole process is stuck before it gets started.
First steps doesn't mean you have to have an explicit map for the entire effort, but you need to take action that makes sense and moves the effort forward towards the vision.
Top Tip: Make this first step easy to achieve - once people have committed to the change, even a first step, then research shows they are more likely to feel ownership and see it through..
RESISTANCE TO CHANGE: Whatever the situation, when change looms on the horizon, chances are that you'll hear things like:
"I can't believe that restructuring the sales force is really going to increase sales."
"Off shoring major development work may sound like a good idea on paper but I just don't see how we can make it work cost effectively."
"Our current system isn't great, but what's so wonderful about the new one? How will that be any better?"
"I know that acquiring ABC should be good news for us, but I can't work out what I should be doing about it."
With comments like these flying around, how will you get everyone to agree with the changes you have in mind? After all, you can't do this without them!
Resistance to change includes people's beliefs in the limits of the change ("A new system won't fit with our unusual business process"), stubbornness toward any change ("I don't want to have to learn how to use a new system"), and general inertia or lack of interest at the beginning.
At an organisational level, there is still the issue of individual resistance but there's also organisational resistance. People will ask…What's in it for me? Maybe a change is good for an organisation over all, but if it makes the job harder for the order processing department, it's likely they're resistance will be high. They will need to feel the dissatisfaction and appreciate the vision for themselves to overcome that resistance.
How to Use the Tool
Beckhard and Harris's change equation is most useful as a checklist in the planning and communication stages of a major change. When you're planning your change process, consider each variable to make sure your team (a) feels dissatisfied with the current situation and (b) believes the future state is both desirable and practical.
Consider the order processing system we mentioned earlier, which is crashing regularly. Right now, the system might crash only once a week - this is inconvenient, but it's not painful. So overall, your team may be reluctant to go through the all the work involved in an upgrade.
When you use the equation, you see that the number of crashes doesn't cause the team members to be dissatisfied enough to make the change. It's your job to give them a clear vision of what their lives would be like if they don't make the upgrade.
For example, let them know that even though the system currently crashes only once a week, it will eventually start crashing every day - and then multiple times every day. When that happens, the team will get behind on their work, and they'll have to stay late to get it finished. A picture like this will probably increase their dissatisfaction with the current system. (Of course, it's always possible that they're satisfied with the existing approach, that the change doesn't deliver sufficient benefits, or that the plan isn't practical - in this case you need to revisit the case for change!)
Also, make sure you share enough details about the technical aspects of the change to help people understand how things will be better. Suppose the new system, in addition to fixing the current problems, also has the capacity to handle 500 times more transactions simultaneously. If people don't know this, they may not be convinced of the desirability of the upgrade!
And finally, be clear about what you, and your team, will need to do to make the change from the current state to the desirable new state. In particular, identify first steps that will help you increase people's confidence in the practicality of the proposed change.
Applying the equation: some examples
The equation is a basis upon which we can build quite different approaches to change management. For instance:
- one large public sector organisation successfully used this formula to develop a highly consultative approach to organisational change. The vision was built and shared at a large-scale event involving hundreds of people. Dissatisfaction was captured using an employee survey that was fed back to everyone in the organisation, and discussed at team meetings. Teams were asked to work locally on using the employee feedback and commonly created vision to define their own first steps.
- In contrast, a FTSE 100 company based in the UK, used the formula as a basis for boosting its change management capability via a highly rated change management programme. Gaps in skills were defined and training workshops were run for the key managers in every significant project team around the company. Three areas of improvement were targeted:
Vision: project managers were encouraged to build and communicate clearer, more compelling project goals.
Dissatisfaction: this was translated into two elements, clear rationale and a felt sense of urgency. Project managers were encouraged to improve their ability to communicate a clear rationale for making changes. They were also advised to set clear deadlines and stick to them and to visibly resource important initiatives, to increase the felt need for change.
First steps: project managers were advised to define their plans for change early in the process and to communicate these in a variety of ways, to improve the level of buy-in from implementers and stakeholders.
- In our Project Management workshops we use the first 3 elements of the change equation as a simple influencing structure for presentations, emails etc. Try following this flow…..
- What is the real risk of doing nothing? (D)
- What are the tangible benefits of the change to the audience as well as the wider business? (V)
- What are the next practical steps that this audience can make? (S)
This flow grabs the audience and avoids the trap that many PMs fall into of starting off with step 3 first - in fact often giving all the steps before clarifying the 'why are we doing this?' question
