Late in the 1800s, a large freight ship owned by the Magellan Tea Company carried massive amounts of cargo across the Atlantic Ocean, enabling textile trade between Europe and the United States. After a few years, there were issues with the crew’s ability to meet scheduled deliveries and minimize cargo loss. Magellan’s owners hired a consultant to observe the shipping practices and make recommendations for improvement. The consultant quickly learned the underlying cause of the Magellan Tea Company’s issues was crew morale. Crew conditions on the freight ship were deplorable, and many crew members complained of the ship’s foul odor.
The consultant provided the ship captain with a long list of recommendations for crew hygiene and odor control. The first items on the captain’s list involved providing the crew with a change of undergarments. Early the next morning, the captain called the crew members together on the deck and announced, “To begin our new hygiene program, I would like for each of you to change your underwear every day. Smith, you change yours with Jones. Johnson, yours with Vickers. Peterson, yours with Michaels…”
Clearly, the captain did not have the expertise to understand what the consultant really meant when he said “change.” Many organization’s leaders find themselves in similar situations. When a change is attempted but not communicated properly, failure often results. Therefore, organizations take painstaking measures to incorporate what is called "change management" into any significant transition or change to how business is conducted.
Changing how a business operates occurs every day in virtually every organization. In other words, change is an inevitable part of business. Changes can include the introduction of new technology, a new competitor in the marketplace, or even the acquisition of another company. Change management becomes a key component in any change effort.
Change management is an art, not a science. It involves an orchestrated combination of communication, training, bargaining, and listening techniques to help people adopt new ways of working. Note the word “combination.”
Holding a safety training session for a group of employees alone is not change management. Merely sending a one-way communication email regarding a new company policy is not Change Management. Rather, these things become change management when a series of techniques is used to thoughtfully consider how to change the hearts and minds of the people involved in a process. Change at this level is what makes change stick.
To ensure sustainability, change management typically involves a series of steps:
Why go through all of this? Why not just tell people to change and deal with it?
Many skeptics will say, “We don't need change management,” and prefer mandates with a dictatorial approach. However, the need for change management becomes critical when quality, staff retention, company morale, and/or safety are concerns.
Change management happens at both at an organizational level (organizational change management or OCM) and at an individual level.
Let’s walk through an example at an organizational level. Milliken Enterprises, a global brewing company, acquires Hipsteria, a regional craft brewery in Portland, Oregon. Milliken has been losing market share to local craft brewers. The move to acquire Hipsteria is a way for Milliken to regain market share and remain profitable. Once the acquisition is signed and approved, Milliken has two options moving forward:
Option 1: Milliken mandates Hipsteria adopt all of the Milliken global brewing procedures. Hipsteria’s employees are told “our way or the highway.” Several results might occur:
Option 2: Milliken decides to take a soft-handed approach and try some change management magic. Milliken’s management team visits with Hipsteria to understand their current customer base and what makes Hipsteria great. Milliken takes time to listen to the Hipsteria staff, understand what is important, and collaborates with the staff to develop an inspirational action plan for moving forward. Better results occur.
Effective use of change management can make or break an organization. Organizations avoiding the artful orchestration of the steps virtually become programmed to resist change. Once the organization becomes averse to change, the downward spiral toward the organization’s leaders being usurped through a takeover, mass exodus of talent, bankruptcy, or divestiture becomes inevitable.
Change Management can also be utilized at a very tactical and personal level. This is frequently seen when a new technology is introduced into an organization.
For example, the accounts payable department is replacing paper invoices with electronic invoices. The AP staff may respond to this change, and the path toward adoption is what is called the “change management curve.” The curve typically includes the following steps:
The objective for change management is to engage each of the individuals involved in the change and move from A to F as efficiently and quickly as possible. Change management, crafted properly, results in seemingly skipping A, B, and C.
Whether change management occurs at an organizational level or an individual level, communication, training, bargaining, and listening tactics can make the difference between success and failure.
This article has been adapted from a chapter from the author's book, Jar(gone).
Trenegy is a non-traditional consulting firm dedicated to helping companies clarify the latest business jargon, putting it into useful terms and solutions that actually benefit your company. Find out more: info@trenegy.com.
