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Is your board ready for change management?

RECORDED WEBCAST  | 

Achieving and maintaining a reputation for thorough corporate governance while undergoing change management processes is vital for boards of directors. Board members are crucial in evaluating business objectives, strategies and executive suite initiatives. However, is your board equipped for change management? This webcast, presented by the National Association of Corporate Directors (NACD) and RSM’s Bob Mulcahy, explained what barriers for change may be in your organization and how to overcome them.

Key takeaways on the four barriers to change management: 

Change management is hard! If people were rational actors, management teams could just explain why the change makes sense and all would be well. Unfortunately, when people are emotionally invested in a way of doing things, they tend to resist factual arguments and instead counter with motivated reasoning.

The following sources will give you some background that will be helpful as we address the issue of change management:

  • Motivated reasoning is the phenomenon that people reason differently when they have an emotional stake in the conclusion
  • The backfire effect was coined by Brendan Nyhan and Jason Reifler. 
  • Happily, there is some evidence emerging that the backfire effect isn’t quite as strong as some earlier researchers assumed. 

Management teams have to figure out how to appeal to employees in ways that go beyond explaining the benefits and processes around the change; in essence, they have to break down employee barriers. Below are four barriers to change that management teams should consider, along with some ideas for how to break them down:

Change barrier 1: People follow the herd

The default way that people decide what to do is to look around to figure out what everyone else is doing. If a critical mass of other people are doing something a particular way, then it must be OK to do it that way.

A fun illustration of this effect can be found here.

The challenge for management teams is to create the perception that the herd is moving. For example, if an organization is trying to drive adoption of a new process but only a small percentage of employees have embraced it, management teams would undermine the change if their message was “only 12 percent of employees are using the new process; we need to do better,” because that would confirm to employees that the norm is that few people are using the new process.

A better approach would be to, for example, count the number of hours people had spent using the new process or the number of units produced: “Our employees spent 12,000 hours last month using the new process.” Even though someone could do the math to determine that is just a small percentage of hours, most people won’t, and the size of the number suggests herd movement.

Change barrier 2: Change often lacks structure and accountability

Change can be vague: “We need to spend more time talking to our clients.” How much more? How often? And so on. The better defined the change, the easier it is to make it a habit. Also, and just as important, the easier it is to hold people accountable.

If instead the change were: “Everyone needs to pick three clients this month and have a needs analysis conversation with them,” that’s much better defined. Then, accountability would start with, “How many conversations did you have this month…”

David Rock, a professional coach who laces his techniques with neuroscience research, has interesting thoughts on the power of structuring change to form habits which you can find here.

Change barrier 3: Change gets piled onto all the other stuff

Change management at its heart is negotiation. Management teams present the change and employees can either accept the changes or not (which can take the form of ignoring the change or undermining it or rejecting it outright). The key to successful negotiation is to not to come out of negotiations feeling like you won; a successful negotiation is one where both parties feel like they won. This approach lays the foundation for good long-term relationships, but also forces you as a negotiator to take time upfront to really try and understand what your negotiating opponent really values.

Influential thoughts on the nature of negotiation by Roger Dawson can be found here.

A powerful approach to this is that for every “ask” that management teams have of employees, they should also be willing to put forth a “stop.” That is, tell them what to stop doing to make room for it. Telling employees to stop doing things that are making money for the business sends a powerful message that the management team truly believes that the change will result in greater value for the organization.

Nick Tasler discusses these techniques here.

Change barrier 4: Change can feel overwhelming

A change that doesn’t seem like that big a deal to a management team might feel overwhelming to employees. Thus, the management team’s job is to, in the words of Chip and Dan Heath, “shrink the change.” That means introducing change in a controlled manner that feels natural, reassuring and surmountable.

Click here to read about Chip and Dan Heath’s guidance.

In their book, the Heath brothers point to some delightful research studies that demonstrate shrinking the change:

Change management is still more art than science, and what works one place may fall flat somewhere else. The critical point is that management teams have to have some awareness of how motivation works. And they have to be willing to try different techniques, learn from what happens and then refine their techniques.

Event details

Who should attend
Corporate executives and leaders, board directors, and audit committee members representing all industries and company sizes

Fee
Complimentary

More information
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