Summary of: 4 Tips for Managing Organizational Change by Greg Satell, Harvard Business Review, August 27, 2019
This article focuses on major transformational change happening at the organizational level. What is transformational? Well, it will look different depending on the size of the organization and whether it is a startup or a mature player in their field.
For instance, a small business that has outgrown its Quickbooks and Excel spreadsheets is facing a transformational change when they implement their first ERP system. Another example is a Fortune 500 life insurance company that wants to be the first in the industry to have a 100% digital life insurance application. It touches agents and a host of other teams inside the organization—truly transformational to the organization.
Not many changes succeed
Satell cites a McKinsey study indicating that few (26%) of these transformational projects are successful. Interestingly, an earlier McKinsey study from the 2000’s found that 70% of transformational changes fail. So, the statistic hasn’t improved. Bottom line: It seems like organizations are getting worse at making big changes in their organizations sustainable, despite many attempts to make them happen.
When it comes to change, start small (not big)
While there are four tips in this article, I want to focus on only one—the first one: start with small groups. This tip seems counterintuitive to common wisdom about how an organization may kick off a large change initiative.
Imagine it is the beginning of the year and the CEO holds an annual town hall meeting to recap the previous year and to cheer about it. She pivots to foreshadowing the new year with updated key metrics and how the organization will meet those metrics. Then, the CEO announces a major change in the organization. No one has heard about it (or very few people at best). She ends the meeting with an inspirational message that she has confidence that the organization can make the change a reality.
What happens next?
Chaos—that’s what.
All change is a disruption to the status quo. When change is announced it causes a level of chaos and always triggers an emotion in people—and often a negative emotion—such as fear or anxiety.
Without intending to, the CEO in this scenario announced a major change is coming and has put the organization into a tailspin of chaos as individuals and teams start to speculate and sort out how the change impacts them. Chaos is not productive. It zaps precious time and energy from daily activities. The chaos usually starts to settle down when the change activities start to roll out and provide the clarity that did not exist at the Town Hall announcement.
Satell’s experience is valuable here—start with a small group.
He states in the article that the common reaction at the Town Hall announcement is that the change is a done deal. In other words, it is moving forward regardless of any obstacles the change may cause to anyone in the audience. It is not hard to see how this can create uncertainty, resistance and perhaps some resentment.
How do you move forward with this? Not very easily.
Why small groups are a better option
A small group does not mean that only the C-suite is in the know, although leadership will be key in any organizational transformational change. A small group could be four teams highly impacted by the change. Starting with small groups allows leaders to hear the team’s pushback and obstacles.
Small groups are valuable in many ways.
- First, it gives insights that the C-suite most likely doesn’t have because they are not engrained in the day-to-day operations or closest to the customer.
- Second, it helps inform messaging and future change activities that will be rolled out.
- Third, it builds champions for the change early. These change champions can influence others who may be reluctant to embrace the change.
Small groups can swell into transformational change. I think about how Rosa Park’s single act of civil disobedience sparked a big civil-rights movement. Don’t underestimate the power of starting small.