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(originally published by Booz & Company)


Change Management: Who’s in Charge?

Managing this continual change will become a key competency of leaders at all levels within the organization and will be supported and enabled by HR systems and structures that adapt easily to shifting transformation program objectives. We see this change leadership capability evolving along three fundamental dimensions:

1. Leading the change. Although people are assumed to be rational creatures, generally speaking, significant change brings out the emotional side in most of us. Part of navigating change successfully is responding sensitively to these emotional reactions. Senior executives play an important role here and need to understand more clearly how essential it is to lead the change. But our experience indicates that this responsibility falls most heavily on the shoulders of line and middle managers, who are, for the most part, ill-prepared to deal with employees’ nonrational responses to change. As a result, resistance often grows unchecked, and cynicism spreads.

To handle people’s concerns in a sensitive (hence effective) manner and therefore deliver the required commitment, organizations must embed a change leadership capability that inculcates new skills, tools, behaviors, and ways of working throughout the organization, but especially among line and middle management. These individuals are the role models who will, in turn, inspire the rest of the organization to embrace and execute the transformation. Forward-thinking organizations are already building management training programs specifically geared to encouraging the development of change management skills and capabilities.

2. Engaging the organization. Transforming an organization — whether through cost reduction or innovation — requires commitment and engagement at every level, starting at the very top of the organization. The secret to successful change leadership is the ability to have the organization embrace on an ongoing basis the vision of a desired future state. Employees should be motivated and willing to adopt new ways of working at any time. This capability is not just fundamental to the success of transformation initiatives, it is central to effective leadership in today’s ever-shifting global business environment.

To truly engage the entire organization, leaders and managers need to get hands-on with their teams. They need to not only model desired new behaviors and ways of working, but also find the time to actively coach subordinates to establish their buy-in and commitment. It is no longer enough to expect people to accept new behaviors; executives need to lead people in defining those behaviors and motivate them to adopt them, while tackling inappropriate ways of working. This process is all the more powerful in organizations where staff already respects and values management’s capabilities, and where executives have a change management tool kit in place to engage, influence, and motivate their teams.

3. Establishing appropriate HR systems and structures. Organizations can support the changes being made at the individual level in terms of training and development by building HR systems and structures — for example, clear descriptions of roles, key work objectives, and an appropriate compensation plan — that reinforce the development of an embedded transformation leadership capability. Recruitment processes should ensure that future hires not only fill critical skills gaps in the new operating model, but also demonstrate an aptitude for adapting to and absorbing change. Reward and recognition systems should motivate people to engage in desired change leadership behaviors at all times. Employment contracts, performance appraisals, and sales incentives should all be tailored to encourage the development and retention of managers capable of delivering change.

There is no question that transformation programs today are more successful than they have been in the past, and that this improvement is directly attributable to the increased focus on the people side of change. The more organizations focus on and value these three critical dimensions of change leadership — leading the change, engaging the organization, and establishing appropriate HR systems and structures — the more effective and prosperous they will be in the Darwinian business environment of the 21st century.

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  1. DeAnne Aguirre, Louisa Finn, and Ashley Harshak, “Ready, Willing, and Engaged: A Practical Guide for Sponsors of Change” (PDF), Booz & Company white paper, September 2007: Identifies the eight levers that engage people at all levels in the organization to assist in a transformation, whether on a large or small scale.
  2. DeAnne Aguirre, Christopher Hannegan, and Gary Neilson, “Navigating the Network: Communications That Create Lasting Change in Today’s Dynamic World” (PDF), Booz & Company white paper, August 2007: Companies facing the prospect of radical change often succeed in engineering the business aspect of the change, but fall short in genuinely engaging key stakeholders in understanding and embracing the change.
  3. Richard Rawlinson, Christopher Hannegan, Ashley Harshak, and David Suarez, “Change Management Graduates to the Boardroom: From Afterthought to Prerequisite” (PDF), Booz & Company white paper, June 2008: Results of the Booz & Company survey on change management (mentioned in this article) of 350 senior executives who have led major transformation initiatives at large organizations worldwide.
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