Who’s Afraid of…Organizational Change?
For over 30 years, I’ve been helping industry leadership teams develop their organizations through strategy and strategic planning. That’s a fancy way of saying I’ve been helping clients change their organization structures. It’s also a way of saying that for 30 years I’ve been helping clients recognize and then overcome their fears so that their firms can grow and be more successful.
Most (but hardly all) of the organization structure changes that I’ve helped put in place have involved the journey from a legacy matrix or regional organization model to a market-sector driven or hybrid model. (For more on each of these models, see Mark G.’s excellent article below, Organization Structure—Beyond the Boxes.)
In my opinion, changing the firm’s organization structure in an intentional, planned manner (as opposed to as a reaction to a crisis) is the second most difficult thing for a leadership team to do. It’s really difficult to intentionally, methodically drive change in an organization when things are going well (as they are for most firms right now). Alternatively, it’s super easy (but a dismal undertaking) to drive change when there is red ink all over a firm’s P&L. (If you’re wondering, the most difficult decision for a leadership team, in my opinion, is to plan to sell or recapitalize a firm in an intentional, non-reactive manner when things are going well.)
Our strategy team is currently assisting a number of ENR 500 clients migrate their organization models to better handle the mountain of work that they face. And while communications and reporting technologies have advanced over the past 30 years—allowing leadership teams to have more fulsome discussions and make better, more grounded organizational development decisions—unfortunately, to hijack a phrase from Led Zeppelin, “the fear remains the same.” And it is this fear that is the root cause of so many organizational development/change failures.
There are two sets of fears—enterprise and individual—that are at play. Here’s what they look like and how they can be addressed:
Fear of screwing things up royally: These are the legitimate enterprise fears of a leadership team that cares about the well-being of their clients, people, and shareholders. They include “What if we’re wrong to take this step, and we’ll damage what we’ve worked so hard to build?” and “What if we are misreading the premise or rationale for changing our organization structure, and instead we should do nothing or pursue an alternative strategy such as an acquisition?” and “What will the unintended consequences of this change be for our clients, our people, our strategic partners?” and “Will we add unnecessary layers of bureaucracy that will slow down our decision-making or destroy our entrepreneurial culture?” All valid. All need to be addressed.
Three steps to success: There are three steps to address this first set of fears. Step 1 is good, solid planning. Test and validate the rationale for change. Connect the preferred model with the firm’s strategy. (Strategy drives structure drives operations.) Research models that are deployed among peers and competitors. Step 2 is multiple meetings to discuss and flesh out concepts and details. Make sure everyone is on board and has their say. (Sounds easy, but who has time to have multiple planning meetings these days?! We’re all so darn busy!) Step 3 is a reasonable timeline for migration of the organization structure. (One to two years is recommended.)
There is no “I” in “we”: But selfish, individual fears are there in abundance when it comes to organizational change and are, in my experience, the most difficult category to address. These fears include “Will I lose the autonomy I have in my individual role in the current organization structure?” and “Will I lose the ‘power’ (real or perceived) that I have in our firm right now?” and “Will others be elevated above me?” (otherwise framed as “Will I be seen as a ‘loser’ in this reorg?”) and “Will I lose direct access to the CEO?” (and go from the inner circle to somewhere more resembling Siberia) and “How will this change impact my compensation, my bonus?” and “What will happen to my people, my clients?” All of these and more are rattling around the minds of managers when they engage in organizational change planning.
Drive out dysfunction: I say that these individual fears are the most difficult because they are—for the most part—never shared, never articulated by the individuals. These fears typically are strongest among the discipline, service, market, or regional managers who are at the heart of any organizational change. They are the ones we require to implement the change, while they are also the ones most impacted by it. And they are either unable to articulate those fears (completely new career territory with no roadmap), or they are unwilling to voice them (because they do not want to appear vulnerable or selfish). They lack trust in their teammates and the initiative. And this lack of trust is the first of the five dysfunctions of a team as described by Patrick Lencioni in his classic management book from 2002. To address these fears, you have to spend an enormous amount of time (again, who has an enormous amount of time these days?!) in team development meetings and one-on-one coaching to get all of these fears out on the table, talk through them, engage in conflict around them, and drive towards what’s best for the firm. It’s an extraordinarily difficult undertaking. But as those teams that have gone through it know, it’s critical for success and pays huge dividends for the firm going forward.
Better, not different: Organizational change is hard, mostly because we as professionals and individuals naturally resist change. And we (rightly) abhor change for change’s sake. That is why I recommend that teams approach organizational development initiatives not as “changing” their organization structure, but rather frame the initiative as “improving” the organization structure and working collaboratively to achieve that. It’s a subtle difference in messaging, but a valid a powerful one.
To connect with Mick Morrissey, email him at [email protected] or text/call at 508.380.1868.