E XECUTING O RGANIZATIONAL C HANGE What are some practical strategies for implementing change?

H OW DO WE GET

Eight Steps to transforming your organization 1.Establish a sense of urgency  Examine the market and competitive realities  Identify possible crises and opportunities 2.Form a powerful coalition of managers who are willing to work together 3.Create a vision and develop strategies to accomplish that vision 4.Communicate the vision 5.Empower others to act on that vision 6.Plan for and create short-term wins to highlight visible performance improvements 7.Consolidate improvements to increase commitment and to accelerate change 8.Institutionalize the change  Emphasize the connection between new behaviors and organizational success  Develop the means to ensure leadership development and succession

Surprises about organizational change For anything to change in an organization, someone has to start acting differently. What looks like a people problem is often a situation problem – To change someone’s behavior, you first change that person’s situation What looks like laziness is often exhaustion – When people try to change things, they are usually dealing with behaviors that have become automatic, and changing these behaviors requires more energy. What looks like resistance is often a lack of clarity – When you ask people to change, you also need to explain how. Heath, C. and Heath D Switch: How to change things when change is hard. New York: Broadway Books.

What are the critical elements of management & change? Rational Elements Planning and Direction Emotional Elements Motivation and Energy Situational Elements Organization and job design

How do you manage change? Provide Direction to the Rider Motivate the elephant Shape the path

How do you provide direction to the rider?

Case in Point: What would you do? Suppose you are an HR manager and you have been encouraging line managers to give more frequent feedback to their subordinates. You decided to have a training seminar for your line managers so that they could practice the recommended new management practice. 2 were very enthusiastic about the new practice 5 were weakly positive 2 were too busy to use the practice 1 was skeptical and opposed to the whole idea After the training you visited 10 of the managers to see how the training worked Find the bright spot Why do we fail? Problem focus: “Bad is stronger than good” bias

Case in Point: What would you do? Imagine you are in a gourmet food store. The store manager has set up a table where customers can sample imported jams for free. On Mondays the table showcases 6 different jams. On Tuesdays the table showcases 24 jams. As expected, 24-jam table attracts more customers to stop by for a free sample. On which days you the store sell more jars of jam? Mondays____Tuesdays____ Script the Critical Moves Decision paralysis deters people from making decisions. As we face more and more choices, we become overloaded. Most familiar path is always the status quo. When there is ambiguity, people would choose the status quo.

Employees want to know what the destination is. When we provide a compelling destination, we are helping the Rider’s great weakness – to get lost in analysis Usual strategy is to have SMART GOALS – Specific – Measurable – Actionable – Relevant – Timely The problem with SMART goals is that they assume not much change but a steady state They do not explain why the journey is worthwhile. In other words, how do you motivate the elephant – our emotions?

How do we motivate the elephant? Two critical models of change ANALYZE – THINK – CHANGE (Speaking to the rider)SEE – FEEL – CHANGE (Speaking to the elephant)

Major weakness of our emotional side are Positive Illusions – Our self-evaluations are always more positive than the reality – 94% of professors think that they are better than average teachers. – 25% of people believe that they are in the top 2% in their ability to get along with others. – Most people think that they could provide more accurate self-assessment that their friends. Easily demoralized and hates to fail Hates doing things with no immediate gains Needs constant confidence building

How do we find the right feeling? When should we focus on negative feelings? – If necessary, we need to convince people they are facing a crisis and have no choice to change (Burning Platform) – If you need quick and specific action, negative emotions are helpful. When should we focus on positive emotions? – When the situation requires creativity, flexibility and ingenuity, we need to focus on positive emotions. – Positive emotions are designed to broaden and build our repertoire of thoughts and action.

Case in Point – Which loyalty card is better and why? Every time customers got a car wash, they get a stamp on their loyalty cards. – Some customers get the loyalty card A. When they fill up their cards with 8 stamps, they get a free car wash. – Some other customers get the royalty card B. In order to get a free car wash, the customers need to get 10 stamps but when they receive their cards they already have 2 stamps added. What are your expectation: Plan A: What % of customers earned a free wash? Plan B: What % of customers earned a free wash? Shrink the Change When we set small and visible goals, and achieve them, we start to feel that we could succeed. We break the habit of losing and get into the habit of winning (ResultsPlan A: 19%Plan B: 34%)

A short test: Read the following four sentences and decide whether you agree or disagree with each item. 1.You are a certain kind of person, and there is not much that can be done to really change that. Agree_____Disagree_____ 2.No matter what kind of person you are, you can always change substantially. Agree_____Disagree_____ 3.You can do things differently, but the important parts of who you are cannot really be changed. Agree_____Disagree_____ 4.You can always change basic things about the kind of person you are. Agree_____Disagree_____

How do you grow your people? Fixed Mindset: We believe that our abilities are basically static. Growth Mindset: We believe that abilities are like muscles – they can be developed by practice Which mindset will most likely take risks, accept feedback, and take long- term view? When people make choices, they tend to rely on one of two basic models of decision-making: Consequences Model: when we are making decisions, we look at the cost and benefits of our choices and chose the one that maximizes our satisfaction Identity Model: When we are making decision, we ask ourselves three questions: Who am I? What kind of situation is this? What would someone like me do in this situation?

How do we shape the path and make change easier? Tweak the environment Make the right behavior a little bit easier and the wrong behavior a little bit harder. Eliminate the Fundamental Attribution Error: We usually attribute people’s behavior to the way they are rather than the situation they are in. Build Habits People are incredibly sensitive to the environment and the culture (the norms and expectations) of the communities they are in. Good habits are important because they allow behavior to happen without our rational side to tell us. The example of the checklist – a simple and powerful tool to shape the path

How do we create a herd behavior? Case in point: Columbia University students, having volunteered for a research study, were asked to sit in a room and fill out a long survey. Some were alone in the room; others were put in a room with two other students. As they filled out their surveys, a “crisis” emerged. Smoke began to pour into the room through a wall vent. The smoke continued to flow in irregular puffs, until eventually filled the room. In which condition more students would get up and find someone to alert the smoke? Alone condition: % ________ With two others: % ________ In ambiguous situations we look to others for cues about how to behave. In times of change nobody knows how to behave. When you are leading an elephant on an unfamiliar path, it is more likely to follow the herd. Example - Drinking

Follow the bright spots Script the critical moves Point to the destination Follow the bright spots Script the critical moves Point to the destination How do you provide direction to the rider?

Find the emotional connection Shrink the change Grow your people How do you motivate the elephant?

Tweak the environment Build new habits Rally the herd How do you shape the path?

As a manager, what is expected of us?

T HANK YOU !