Establishing a Culture of Change

When a company hires a consultant to assess their systems, they are really asking if everything is being done well. They’re also asking is there anything that should change — and therein lays the rub.

Change is difficult for many people and particularly hard if you don’t know why things should change. I’ve had the opportunity to see the inside of many companies and one thing I’ve noticed is that every one of them has an optimal rate of change. For example, I recently had the pleasure of working with a great company where there were many long term employees. The executive management team had been with the company nearly twenty years.

I was asked by the CEO to assess their technical capabilities and readiness for a growth spurt that he expected because the economic conditions were right for a series of acquisitions. As I went about interviewing the staff, I found that many of them had no idea why I was there and were nervous about what my report might mean for them. I found that the line managers where doing their job as they had always done it without taking a critical look at why they did it a particular way.

The problem wasn’t that they were unintelligent people, but rather that they had no experience with doing their job in a different way. Additionally, when a major change was suggested, it was endlessly discussed in committees until the suggestion died of boredom.

This is an example of a culture that was ossified and change was an anathema. There are many companies out there with that same kind of mindset. The attitude is that change upsets people and therefore it’s a bad thing. In these kinds of cultures the only way to inject change is to show that change can be a positive thing by initiating changes that bring a large benefit to a small cross-functional group. Those changes can be easily absorbed and the small group becomes the seed for spreading the word that change doesn’t hurt.

One of the risk factors in initiating change is understanding the rate of change the organization can absorb. It’s a bit like planting ground cover, a few little plants here and there, wait awhile and pretty soon they’re everywhere. The same thing happens when you introduce change in an organization. If you gradually introduce the change and let everyone get used to it in small increments, the change will be more likely to be accepted. But if you try a big bang and change everything at once, people get uncomfortable and odds of making a successful change go down.

There’s no easy answer to changing an organization’s attitude toward change. You have to understand the organization, its goals, and its culture to assess what rate and volume of change it can absorb. While evaluating your own organization’s tolerance for change you will want to think about:

  1. Does your company routinely explore new ideas and processes? There is always some risk in doing new things, but if they openly accept change, the organization is probably more attuned to risk evaluation and does things that generally mitigate risk.

  2. What is your organization’s level of risk tolerance? Some organizations are much more risk averse than others.

  3. How critical is the change to the company strategy? If the change is incidental to the operation of the company, easing the change in a bit more slowly may be more acceptable. However, if it’s mission critical, the company may support a more rapid change because everyone will understand that the change is important to growth or even survival.

  4. Can the risk be mitigated, if not eliminated? Lowering the risk by putting together detailed plans for change and phasing the change in will help by giving the company a chance to absorb the changes more gradually.

  5. How does your organization plan for and implement change? Does it have a formal change process or is it ad hoc? More companies are finding that a formal change process is desirable particularly in light of the regulatory requirements of Sarbanes Oxley.

Preparing the company for continuous change is one of the things can be done to reduce the risk of change. Putting mechanisms in place to respond positively to change and take advantage of it will give the business a better chance of survival in a world that is constantly changing. Knowing the organizational and using your best judgment on what rate of change can be absorbed is the best way to keep the company moving forward.

Mike Scheuerman is an independent consultant with more than 30 years experience in strategic business planning and implementation. His experience from the computer room to the boardroom provides a broad spectrum view of how technology can be integrated with and contributes significantly to business strategy. Mike can be reached at [email protected].