According to a study back in 2013 by Towers Watson, only 25% of change initiatives are successful in the long term! (See Victor Lipman, Forbes, Why Change Management Fails)
Quite dismal results when you think of the huge investment made by many corporations to implement change initiatives in their organizations, even more so when you consider that such initiatives are almost always announced as critical for future business success!
Highlights of the study involving approx. 280 large and middle size organizations from North America, Europe and Asia showed that:
- Employers felt 55% of change management initiatives met initial objectives but only 25% felt gains were sustained over time
- 87% of respondents trained their managers to manage change but only 22% felt the training was effective.
- 68% of senior managers said they got the message for change but this fell to 53% for middle managers and 40% for front-line supervisors.
These are quite dispiriting figures and seem to show, unsurprisingly, that the lower down you go in the organization, the less informed and therefore less engaged employees are.
Why do these change initiatives fail? More importantly, what can we do about it?
Commentators suggest the following reasons why change initiatives fail:
- The change initiative goals are not realistically attainable
- The CEO is not at the forefront of driving the change
- Senior managers talk the talk but don’t walk the talk.
- Middle managers and supervisors are not sufficiently informed and don’t really understand the reasons why the changes are needed
- Management wants a quick fix and doesn’t understand that implementing change is a long-term effort.
These are certainly very understandable reasons and the following solutions would seem the very least we should do:
- Look at the territory and not the map. Set SMART change objectives.
- Make sure the CEO is at the forefront and leads the way!
- Make sure senior managers not only talk the talk but walk the talk by demonstrating the behaviors required to drive the change down into the organization
- Prepare for the long term. Lead, plan and budget accordingly.
But what about the crew down in the hold rowing hard to the corporate drum beat?
Doing all the things listed above will certainly increase our chances of getting more buy in from grassroots employees but what more can we do?
How can we get grass roots employees to engage more directly and more often in supporting and implementing enduring and sustainable change? How can we harness the power of the grass roots employees to deliver extraordinary results long-term?
This is really the question at the heart of “The Open Organization, Igniting Passion and Performance”, Jim Whitehurst’s account of his leadership journey when he became CEO of Red Hat, a world leader in open source solutions.
The starting point of Jim’s leadership journey was his realization that the traditional top down, command and control, classical hierarchical organization that he was used to at Delta Airlines could not work for the Open Source culture of Red Hat.
For Jim joined an “Open Organization”, an organization that is not led in the traditional top-down way and that depends on ever-growing collaboration between internal and external communities of contributors who update and improve software (essentially Linux based) by working together, an organization where decisions are taken not top down but bottom up or even from edge to edge of the organization to respond to business opportunities. If Linux is open source and supposedly free, Red Hat is in the business of adding value to free code and providing customers with peace of mind that “their entire system based on Linux is the most stable and secure system on the planet”. And to do that, openness, transparency, participation and cooperation inside and outside the organization is critical.
Moreover, as Jim explains, not only do they need the inputs of more and more employees
further and further away from the centre or from partners and customers if they are to innovate and gain competitive advantage but decisions have to be taken faster and faster. For such organizations, the traditional hierarchical chain of command no longer works because it takes too long, consumes too many resources and because they don’t own the code on which their solutions are based. As he says himself, “you can’t command initiative, creativity or passion”. These are gifts and every day, employees choose whether to bring them to work or leave them at home. Suppliers and customers likewise.
So leading such an Open Organization requires a new management paradigm where decision-making is no longer the prerogative of hierarchy and where decision making is top down but one where decision making is bottom up, where employees are trusted to do the right thing and where management is hands off enough to allow the people in the organization to direct them and make their own decisions.
I would highlight 7 key leadership principles that are key to managing change successfully in Open Organizations and indeed in all 21st century High Tech, innovative organizations.
- Start with Why!
For Jim Whitehurst, you must start with “Why” because starting with “Why” and building a compelling sense of Purpose creates an extraordinary degree of engagement among all stakeholders and catalyzes creativity, innovation and organizational commitment. Jim Whitehurst quotes Whole Foods CEO John Mackey and Babson College Professor Raj Sisodia:
“People are most fulfilled and happiest when their work is aligned with their own inner passions. Personal passion, corporate purpose and business performance all go together”. If you can create a compelling reason for people to participate, they will.
So a compelling Purpose is the first driver of engagement and if your change initiative doesn’t have a clear compelling Purpose that employees identify with, you won’t get the levels of engagement from employees required to drive change successfully.
- Ignite Passion!
But a compelling Purpose is not enough. Today’s workers want their work to mean something and they want to be part of something that makes a difference. So organizations must activate passion amongst employees to really achieve great performance.
An employee who feels passionately about his company’s purpose will be engaged and
motivated to deliver extraordinary performance and go that extra mile. And to get that passion, organizations must be prepared to challenge their people to take initiatives, find ways to innovate and of working together to gain an edge on the competition. As Jim Whitehurst says, if you don’t want passionate people, you can always use robots but robots won’t deliver innovative solutions to unforeseen or new complex challenges!
So the second ingredient in managing change: encourage passion in your employees and give them opportunities to express their passion from Day 1!
- Engage your employees from Day One!
As employees today need to understand “Why”, leaders need to engage with their workforce in a much more direct, continuous and positive way. Expecting employees to behave proactively and assume accountability for their decisions means that leaders have to provide much more information and context than ever before and this means much more than simply pushing information down the organization through the usual internal communication channels.
This means constant and ongoing dialogue between leaders and employees at all levels. So in an Open Organization, the leadership role is not undermined or abandoned. Rather, the leader’s role becomes one where he/she constantly provides context and meaning and constantly supports employees in their decision making by “determining the appropriate amount of latitude that each individual is capable of handling, plus develops, coaches and stretches their capabilities along the way”.
This third element of successful change management requires leaders to engage constantly with employees and not only when some change management initiative needs to be implemented. If leaders haven’t been busy building the engagement of their team members from day one, don’t expect to get it when you need to launch an urgent organizational change. It’s too late!!!
- Develop Accountability!
In conventional, top-down command and control organizations, Accountability is simple. I am accountable to my boss who is accountable to his/her boss who in turn is accountable to his boss, etc. But as Jim Whitehurst points out, real Accountability is not asking permission to do something or saying “May I” all the time.
It’s about being accountable for a set of outputs after the fact! And if you want employees to accept real accountability, you need to foster a culture that encourages initiative, trust, transparency, information sharing and all the things that allow employees to feel that they have the means and the support from leaders to take reasonable decisions at their level and are willing to be therefore accountable for the results.
Above all, the best way for leaders to develop Accountability is to demonstrate it themselves and walk the talk by actively seeking feedback from all levels of the organization on whatever issues concern team members. Leaders have to listen to and engage with employees on how to resolve the issues raised rather than simply telling them to shut up or accuse them of being obstructionist. One very frequently used way of getting feedback is the annual employee survey and one equally important way of walking the talk is by acting on the employee feedback obtained in the annual survey in a positive way.
As Jim Whitehurst says, feedback is a gift so take the feedback at face value, don’t shoot the messenger or risk disengaging your employees!
It’s all about trust. Employees who trust their managers are more productive and trust comes from open dialogue and from leaders walking the talk!
So real accountability is a 4th element in ensuring successful change management and again, this has to be from Day One and not only when circumstances require it.
- Enroll your thought leaders, not just your managers!
In classical top down organizations, decision-making is simple. The Boss decides ultimately and the hierarchy dictates who gets heard. In Open organizations like Red Hat, this can’t work.
Those closest to the issue rather than those responsible for overall direction of the organization or team, tend to make the decisions. This of course requires collaboration and mutual respect between employees and their managers in a complimentary relationship. Decisions are made on merit. In other words, they are made on the best case put forward and excellence, not position, prejudice, titles, politics or privilege is the criterion of choice.
So the role of leaders is to ensure decisions based on merit can be made by the right people working together on the right things. And how do leaders do this?
They can do this by building an organization that listens to all employees and allows everyone to voice their opinions openly so that gradually, real thought leaders can rise to the top. Organizations of course usually know who their key influencers are (the thermostats as Jim Whitehurst calls them), those thought leaders within the organization who are generally recognized by their peers for their achievements and expertise and whose contribution is vital for the success of any change initiative. But such thought leaders are unlikely to contribute positively if they are being stifled by a command and control type manager or if they witness colleagues being gagged or not being listended to. If you want your thought leaders to participate willingly and if you want to avoid groupthink conformity, proactively encouraging a culture of open expression where everyone’s voice is heard is a (small) price to pay!
So to ensure the success of your change initiatives, listen to everyone from day one!
- Nurture creative abrasion!
It’s not enough to show you listen. In conventional organizations, everyone is expected to fall in line and conflict is seen as a threat and usually repressed. But as Jim says, you can’t get the best creativity, initiative or efforts from members of an Open Organization, indeed any organization, by saying “Go do this”. The best ideas happen when teams “hash things out”! Open organizations therefore encourage and accept not only bottom up feedback but also organize and develop strong, energetic internal debates which may even occasion conflict and opposing points of view.
What Jim Whitehouse calls “creative abrasion”, something that involves some level of conflict – a disagreement, contention or argument – works best when it is practiced in a community that has a shared purpose, shared values and rules of engagement that help keep the conflict productive rather than destructive”.
If you don’t encourage such debate, you may well end up with what Jim calls a “terminally nice” culture that ends up in real trouble because you never initiated the difficult conversations required to challenge the status quo and get the meaningful inputs required to turn things around.
And the role of leaders in these Open Organizations is even more important: encourage and manage these abrasively creative discussions where everyone is free to exchange their points of view in a candid, positive way. Jim quotes the former CEO of Xerox PARC who
said: “you want an organization that argues with you. And so you want to nurture the bottom up but you’ve got to be careful that you don’t degenerate into chaos”. In a way, leaders have to disrupt the conventional way of getting things done if they want to avoid falling in to the “terminally nice” culture that suffocates successful change management!
Lots of tools now exist to orchestrate such internal debates and in implementing them, you can use the wisdom of the crowd to police discussions. Indeed, peers themselves will step in themselves if discussions become too virulent, if you really have a community of like-minded employees who share a common goal.
So 6th element in managing change, accept being challenged and proactively promote a creatively abrasive, bottom up feedback culture and do it from Day One!
- Involve employees directly in decision-making!
Managing change is fundamentally about decision-making and getting decisions implemented operationally. So change management is not only about big transformational projects but is at the heart of what leaders need to do every day: get their team members to adapt with agility to change and execute effectively.
In a typical command and control organization, the manager says and the employee does but we all know that it doesn’t work like that in real life, especially in Open Organizations, indeed in most 21st century high tech organizations. Leaders need the buy in of employees to execute effectively.
But as Jim Whitehurst points out, classical change management approaches usually focus on the “execution” phase and huge effort is spent on “explaining and selling the changes” top-down to employees, once decisions are made by management at the top.
At Red Hat, they do it differently. Rather than focus on “selling” the execution plan to employees once the plan is hatched, they have moved most of the change management activities into the decision-making process itself and using a host of different feedback mechanisms, get inputs from all levels in the organization before any significant decision is made or implemented. The drawbacks are numerous: the feedback process is time consuming, objectives needs to be explained and understood, leaders have to be prepared to listen and even ready to alter their plans according to the concerns raised and this can be threatening for many managers.
But as Jim Whitehurst points out, the results are worth the effort because the time you
lose in preparing your change is gained back in the adoption phase because you have more employees on board and they will follow you “because they trust you and not because you ordered them to”. As we all know, employees feel more ownership in the changes needed when they are involved in the decision behind them!
This doesn’t mean that a company is a democracy. leaders still remain the ultimate decision makers and may have to make difficult decisions despite all the efforts to listen and engage teams. But if you take the time to explain why and can back it up with a rationale, you can still drive progress and get things done.
So the 7TH element in managing change successfully is in switching the change management from the execution phase to the decision making phase and really making the effort to involve employees in the decision making process on an ongoing basis.
Hurry slowly. It’s worth it!
So 7 simple principles for leading change in Open Organizations.
And they obviously work for Red Hat as they have grown from an organization with revenues of $400 million to one with revenues of $1.5 billion. A great achievement.
But in my view, these 7 essential principles of leading an Open Organization can be applied in any organization, Open Source or otherwise, that seeks to foster initiative and creativity rather than running operations on HiPPO – the “highest paid person’s opinion”.
And if they are applied, they will help to build a really collaborative culture where employees are engaged from Day One and change doesn’t need to be “managed” but is an integral part of the leadership and collaborative team work process on a daily basis.
Remember the 7 Principles of leading in change in an Open Organizations:
- Start with Why
- Ignite Passion
- Engage with your employees from Day One!
- Develop Accountability at all levels
- Enroll your thought leaders as well as your managers!
- Nurture creative abrasive bottom up feedback
- Involve employees proactively in the decision-making process
What do you think?