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The Heart of Change

http://www.flickr.com/photos/nomadic_lass/

The Heart of Change:
Real-Life Stories of How People Change Their Organizations.

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In some eras, stability matters. Businesses are preoccupied with consolidating their positions. But today’s economic environment is turbulent, and companies of all kinds must either change or die. Yet, people still find change difficult. Most people don’t do it well because they have never had a successful change experience. Too often, managers try to instigate change with appeals to reason – with reports, spreadsheets, budgets, plans or mission statements. But these tactics cannot create the widespread sense of urgency organizations need to alter their course. Instead, the “heart of change” resides in the heart itself – the emotions of individual employees. Only deep feelings can motivate people to change familiar behavior, and only individual behavioral changes can drive organizational change. Changes in vision, systems, products and culture all have their roots in behavioral change.

Step One: “Increase Urgency”

So, how do you reach the heart to create a sense of urgency? A story or artifact that demonstrates the problem works better than endless explanation. One vivid, creative and inexpensive demonstration constructed by a frustrated manufacturing company manager provides a good illustration. The company had no central purchasing system or policy; instead, each factory bought its own supplies. Convinced that this was a waste of money, the manager asked a summer intern to find out what kinds of gloves each factory used and how much they cost. The manager knew things were bad, but he was astonished to discover that the factories used 424 different kinds of gloves, which they purchased for prices ranging from less than $5 to more than $15 per pair. Next, the intern obtained a sample of each glove and sorted the samples into categories by price and division. The manager put them on display in the central office boardroom. The executives who toured the display were speechless. They sent the glove display to every division and many factories, telling and retelling the story. The experience became the first step in developing a new, company-wide purchasing system.

Note that the impetus for change did not come from the top. The manager knew he needed to reach executives, but he engaged people throughout the company because of the vividness of his message. Of course, he had to present the glove display without blame or anger. When people feel defensive or fearful, they focus on self-preservation, not creative solutions or progress.

Step Two: “Build the Guiding Team”

Once employees feel that change is urgent, many are eager to help. Choose a team of “the right” people who are committed to working together. An organization’s politics and history – especially if it has undergone mergers – can undermine efforts to construct a strong team. Confronting problems or changing old patterns can be difficult, given people’s tendency to “duck the issues.” Or, work gets “dumped” on weak people, setting the team up to fail. “Ducking and dumping” are common, but you can avoid them with trust and good leadership.

One company that grew quickly through acquisitions reached the point where it had to look inward and begin to put the pieces together. The close-knit, homogenous executives who were used to the tempo of takeover negotiations found this change in direction hard to take. One executive said, “Before we used to get a deal done and then work like hell to make it work. It was exciting. Now there’s none of that.” But the firm’s new leader recognized that it needed a different kind of team. He invited people from all functions and divisions to participate. At times, the team’s diversity felt unwieldy. Members often debated their direction and priorities – but that was the point. To create this new kind of group, the new leader had to buck company history and trends.

Choosing the right people means both “pulling” – inspiring team members, often throughmodeling – and “pushing” – redirecting those who are ineffective or entrenched in old ways, or taking them off the team. Sometimes, consultants or managers try to solve team problems by creating “complex governance structures,” which may even work a little better than a poorly constituted team. But endless subcommittees and reports aren’t solutions. Instead, they often become ways to “duck” formal or informal power structures. Direct, honest communication, though painful in the short term, creates trust and works better in the long term.

Step Three: “Get the Vision Right”

Once you achieve consensus that change is urgent and put a leadership team in place, the team can begin to craft a vision. A vision is not a budget, plan or strategy – although these pieces help implement the vision. Ultimately, developing a workable vision requires “venturing into unknown territory.”

One British company used an exercise called “painting pictures.” Deregulation left their industry at a turning point. The possibilities for a future direction were divergent and confusing. Members of management selected seven broad options, and for each one outlined possible products, revenue, employees, customers and competition. They examined the assumptions behind each option, and what it would take to achieve it. They wrote short descriptions and discussed them in detail, down to what their offices might look like, that is, the “painting.” After the meetings, participants received a one-page summary. “You could almost hear the sigh of relief that they weren’t being sent another Excel file or an e-mail with 16 new attachments.” Once the options had been “painted,” people could be assigned to develop plans and budgets – now that they had some specifics.

A good vision motivates people, as the widespread problem of “efficiency versus service” illustrates. Simply telling managers to cut costs does not motivate them; if anything, it makes them feel stifled. In contrast, in one government agency, the staff was inspired by a vision of better service, and began to focus on “removing impediments. And removing impediments in the bureaucracy inevitably leads to eliminating wasted expense. It follows logically.”

Step Four: “Communicate for Buy-In”

When employees first hear about a big change, their responses often reflect fear, cynicism and anxiety. Communication that ignores these feelings becomes propaganda and arguing about emotions sounds defensive. Instead, present the vision clearly and honestly, and confidently address responses such as anger. To get this right, most teams need to practice, using notes, role-playing and feedback.

What a company says must match what it actually does. One company’s change effort to cut costs stalled when employees challenged the message, particularly questioning the purpose of the existing fancy executive offices. Bosses balked. They said spending for renovations would contradict the cost-cutting vision. Then, a new CEO came in and “nuked” the entire executive floor. Workers began to share the exclusive elevator. The firm sold artwork and added conference rooms. Executives moved around as massive renovations tore everything up. Ultimately, the new space was less expensive to run and more efficient. The savings eventually paid for the renovation. Most importantly, the drastic action demonstrated that the leadership viewed transformation seriously, even if it discomfited those at the very top of the hierarchy.

Step Five: Remove Barriers to “Empower Action”

The classic “barrier” is an “old school” boss, such as the stubborn manager who greeted all new ideas with, “We tried it and it didn’t work” or “We thought about it and decided not to try it.” One crucial customer grew so frustrated that he asked for the manager to be fired. Instead, the company assigned the manager – on pain of taking on the task or losing his job – to be a quality inspector in that customer’s plant for several months. The experience turned his attitude around completely. He came back full of ideas about how the company could improve its products. The moral: Do not jump to the conclusion that someone is “hopeless.” Verbal explanations did not work. Training probably would not have helped. The manager changed when he “saw” things differently through the prism of his new experience.

Executives often see the entire middle management structure as a “rock” that impedes change. But change cannot happen unless steps one through four are carried out correctly. Perhaps the leadership has not demonstrated or communicated urgency; maybe the team isn’t functioning; maybe the vision is not well developed. Systems – especially evaluation procedures and standards – are other common “rocks.” Do not set people up for failure by asking them to change and take risks within a system that offers tiny rewards for achieving transformation and “a hammer on the head” for failing. Reward people for innovation. Fear, anxiety, cynicism and other negative thought patterns are behind most resistance to change. To counteract “the power of the mind to disempower,” reward new kinds of behavior, provide role models who have been through a successful change, share sufficient information and cultivate a realistic attitude that everything can’t be done at once.

Step Six: “Create Short-Term Wins”

The vision is long-term, but initially shoot for some quick immediate successes. Short- term successes confirm the work of transformation leaders, boost hard-working staffers, undermine skeptics and stoke everyone’s belief in the change effort.

One firm’s change team created a “Big Four” goals list. Even though they eventually needed to make many changes, they posted only the top four targets. Employees read and discussed the messages. When a goal was accomplished, the team crossed it off and added a new one. Workers felt energized as they saw progress. One employee said, “We’re really knocking ’em down.” However, never exaggerate or propagandize the effort to establish “wins.” In an e-mail “message of the week,” one transformation team claimed, “90% of our pre-go-live objectives have been met.” Workers knew this high estimate was patently false. After that, they mistrusted even documented good news. Morale deteriorated. One manager warned, “…any form of hoopla is a mistake.”

Step Seven: “Don’t Let Up”

Step seven may seem to contradict step six, since it de-emphasizes short-term wins. But, people must remain aware that the job is not finished. Instead, use short-term wins as an impetus to heighten urgency, reigniting the initial fire of the change campaign. In one firm, cross-company teams with broad powers – dubbed “action labs” – led the change efforts. One action lab created a video that mocked executives’ negative behaviors during a budgeting process. The characters included a “Merchant of Fear,” a “Glory Hunter” and a “People Protector.” One lab member reported, “I think top management burned the film.” But even so, executives referred to it: “Watch out, this is beginning to look like Merchant-of-Fear talk,” they would say.

Exhaustion is another pitfall at this stage. People feel urgency, they’re making rapid changes, they’re still doing all their old work – and it is just too much. Hopelessness takes over; people feel there’s no way out. The solution is straightforward: drop some of the work. One company rigorously examined the merit, value and necessity of each task. As a result, management quit requiring departments to produce 25-page monthly reports. It cut regular reports to two pages, saving thousands of hours of writing and reading.

Step Eight: “Make Change Stick”

Groups enforce their embedded cultural norms without even thinking. Because culture goes so deep, changing it may be the hardest kind of transformation. Many people assume that cultural change must come first. After all, if people can open up to new values and processes, the rest must be easy. In fact, culture changes only after people have tried out new behavior and are convinced that it works. These new attitudes do not become culture until they go deep. If they last only as long as the change leaders are in charge, real change has not happened. Most companies find that they must teach the innovative norms to new hires in training sessions, and must promote staff members who exemplify the fresh values.

The Heart of Change

Featured image courtesy of Nomadic Less. Few Rights Reserved.

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