Does Your Organization Need a Change? If It Does, Avoid These 5 Traps

Few people embrace change in professional or personal situations. You know the clichés – “If it ain’t broke, don’t fix it,” “The devil you know is better than the devil you don’t know,” and “You can’t teach an old dog new tricks.” It’s human nature to resist change.

But for an organization to achieve sustained success, it must be open to change. The first step to welcoming change is to recognize the need for it. How can you tell that your company needs a systemic or organizational change? Clues can be seen in several places, including your financial statements, your technology, project reports and the marketplace in general. You may also notice signs from your customers, employees and anyone else invested in your organization’s success.

If you know it’s time for a change, read on for ways to proceed successfully. If you’re not sure, take some time to find out. Look at company statements, reports and press coverage. Listen to customers, employees and other stakeholders. And trust yourself. Sometimes you can just feel that something isn’t right.

Here are four key areas to look at when deciding if your company needs a change:

Finance
• Reductions in working capital and cash flow.
• Declining revenues and profit margins.
• Unwarranted increases in expenses.
• Slower turnover of accounts receivables and inventory.

Strategic Planning
• Lost market share and declining sales.
• Excessively high customer concentration.
• Inconsistent results, i.e. targets for product development or new market penetration have been repeatedly missed.

Operations
• Outdated equipment or equipment failures threatening productivity.
• Technological changes needed.
• Obsolete inventory.

Personnel
• C-level executives constantly fighting fires rather than focusing on developing or growing the business.
• Lack of delegation or effective decision making.
• Poor employee morale.
• Multiple resignations of key personnel.

Common Mistakes
Companies that have committed to make an organizational change typically begin with enthusiasm and energy. But for several reasons, this positive outlook rarely lasts.

Here are five common traps that impede organizations during the change process, along with strategies for avoiding them:

1. Lack of Integrated Vision and Strategy
Companies that are anxious to “fix” the organization often sacrifice long-term success for short-term results. For a company to realize the benefits of a solid organizational change, quick fixes can be implemented. But the organization must be willing to incorporate these solutions into a long-range plan that aligns with the company vision and strategy. Whether it’s cultural, behavioral or performance based, the plan must align with specific business results.

Success Tip: Create an overall vision and supporting strategies to guide the organization and make all the pieces fit together. This will center people’s efforts on common values and provide a clear understanding of how they support the overall organizational mission.

2. Tolerating Complacency
Change is hard. Many companies fail to accept the challenge and choose to let the status quo reign. If the appropriate people are not fully engaged in the project – they may sign on, but then take no action to support the initiative – the project manager and related teams are set up to fail.

Success Tip: Build a strong case for change throughout the organization. Make sure everyone understands “what’s in it for me?” Communicate how the change needs to take place and what the expectations are. Define which groups are critical to implementing change and ensure you have the right leadership and resources to be successful. Leadership must support the change and lead by example through day-to-day actions.

3. Poor Communication
If every audience that will be affected by the change – customers, employees, vendors, investors, and the media – is not informed along the way about critical issues that directly impact them, resistance will be the result. Uncertainty and fear are natural responses to a large change, and individuals respond in various ways. Some may act out or become passive-aggressive and cause conflict.

Change initiatives, no matter how well-intentioned and planned, fail without appropriate communication. When you undertake change without having a communication strategy and plan, the result is that communications (1) happen inconsistently (2) portray the wrong message and (3) fail to address the needs/concerns of stakeholders.

Success Tip: Develop a communication strategy, conduct a stakeholder analysis, understand your stakeholders’ requirements, (what, when, how, who) and anticipate potential conflicts. If you think you’re communicating enough, think again. You can never over communicate.

4. Too many obstacles.
Change initiatives often fail because leadership allows too many obstacles to impede forward motion. They fail to put the appropriate resources, time and people on the initiative or they over commit resources so that the initiative is doomed from the start. Other obstacles include competing or conflicting projects and declarations of premature success.

Success Tips: Clearly define a plan for change. Identify a sponsor for the change and prioritize and allocate resources. Establish clear communication channels with the sponsor and project team. Clearly define an escalation process to quickly resolve issues. Celebrate and leverage any smaller, visible improvements to encourage substantial, visible success.

5. Companies don’t “anchor” in the change.
After the initial change, the passage of time often leads to a reversion back to the “old way of doing things.” When people aren’t held accountable for specific deliverables and metrics aren’t established for the long term, employees tend to revert back to their old behaviors and managers tend to move on to the next priority.

Success Tips: Cultivate solid leadership skills and create expectations for performance-based change, i.e. centered on market share, productivity, profitability, etc., to ensure that cultural and behavioral changes stick. Encourage a shift in mindset by all.

Remember, this type of work is challenging and time-consuming. Whether your organization is changing technology, culture, processes, organizations, or its entire business focus, change takes time, patience, creativity, persistence and focus – and a lot of hard work!

Celebrate your wins along the way and recognize the losses. Keep people engaged, and you’re more likely to achieve success.

About the Author:
Renate Rooney is the founder and president of Renate Chisholm Rooney Associates, LLC, Harvard Massachusetts, a management and operations consulting firm committed to helping companies transform their vision into value and achieve desired business results more quickly, more efficiently and more profitably. We work with executives and their employees to help them solve problems related to growth and reorganization. She can be reached at 978-456-7377 or rrooney@rcr-associates.com.