Why Corporate Change is Difficult, But Possible

January 27th, 2012

By Dr. Jim Taylor

ChangeNow, more than ever, the corporate world is in a state of constant change. Whether increasing global competition, the emergence of new technologies, or the high turnover of company staffs, life in the business world is constantly in flux.

Despite this reality, companies themselves don’t always adapt quickly or well to these ongoing tectonic shifts. This inability to evolve with the changing corporate landscape means that companies may be operating under paradigms that are outdated or not optimally productive. The result? A company that is not on the leading edge of their market and a company that, rather than riding the next paradigmatic wave, will be playing a perhaps-never-ending game of catch-up.

It is not a question of whether or not your company will change in this ever-shifting marketplace. It is whether it will change and survive or it won’t change and it will die.

I’m going to assume that you want your company (and, by extension, your job) to be one of the survivors. So the question is how can you help your company to change in ways that will ensure that it not only survives, but thrives in these uncertain economic times?

Why Corporate Change?

The first question that a company needs to ask is: why should it change? There are a number of reasons. Perhaps the single biggest reason for change is that the current approach is no longer working. Whether the continued use of outmoded processes or the development of new technologies that reshape an industry, not being willing to change means violating the Law of Insanity: doing the same thing and expecting different results. The simple reality of the current marketplace is that if something doesn’t work, you better change it.

As I mentioned above, change is necessary to adapt to the ever-changing corporate world. Has there ever been a time of greater uncertainty and instability in the business world? I don’t think so. Could there be more incentive to change than the need to bend to shifting corporate winds? Well, it’s definitely better to bend than break.

Another reason is simply to stay fresh and vibrant. It’s too easy for a company, particularly one that is old and well established to get stuck in its ways of doing business. Change ensures that the company stays energized and focused on its mission.

A fundamental component of a strong and resilient company is its ability to be constantly searching for ways to improve and maximize performance. In a marketplace with more competition than ever before, the constant pursuit of improvement ensures that it never falls behind.

A company can’t just focus on the present if it hopes to still be alive and well into the future. As a result, it must be looking and planning ahead regularly. Key questions to ask include: What is the next big thing in our industry?, What are the challenges that we might be facing in the near future?, And What changes can we expect—and adapt to now—before they become an imperative in the near future? If you can answer and plan for these questions, you will have a leg up on your competition.

Three Obstacles to Corporate Change

Of course, if change was easy, every company would do it and every company would be successful. But the fact is that there are some substantial obstacles to corporate change.

Especially when a company has been successful and it is led by a management team with significant tenure, it is easy to be lulled into a sense of comfort and complacency. People feel better when their world is familiar, predictable, and controllable, in other words, when it continues the way it always has. Change disrupts that comfort and that makes people, well, uncomfortable, not a very desirable state for most.

For these reasons, people don’t like to change and, unfortunately, may do whatever they can resist it. So, even if the leadership of a company wants to change, there may be resistance at various levels of the corporate structure to that change. As long as there is substantial opposition to change, it is likely that it won’t be able to take hold within a company.

Lastly, a company can develop an inertia in which it doesn’t change simply because it would take too much effort to change. Think of a company as an asteroid hurdling through space. That asteroid has probably been traveling on its current trajectory since its creation and it will continue to follow that path unless a significant force is exerted on it. The same holds true for companies.

Four Building Blocks of Corporate Change

Before a company can begin the process of change, it has to lay the foundation of change with four essential building blocks.

First, a company must see the value of change. This value can be based on two possible incentives to change. The company can want to change because it views the change as beneficial. Or the company sees the need for change, for example, change is the only way it will survive. It is often necessary for the head of the company to “sell” the need for change to their team by providing a compelling rationale.

Second, once the company sees the value of change, there must be top-to-bottom consensus for change. As I noted above, if there isn’t complete “buy-in” by everyone involved in the potential changes, then there will resistance that will sabotage the efforts at change.

Third, once the value and consensus has been established, the company must have absolute clarity of the specific changes that will be made. This understanding will ensure that everyone is on the same page about the changes and it is clear to all of the why, what, when, where, and how of the changes.

Finally, there must be significant commitment to change from the top to the bottom of the company. As we’ve learned here, change is very difficult. Without dedication to the change by everyone involved, a critical mass will not be mustered to initiate and maintain the efforts at change.

Returning to my “company as asteroid” metaphor I used above, for an asteroid to be moved from its current path, one of two types of forces must be exerted on it. The only ways that asteroid—or your company—can be moved is either by one massive force that knocks the asteroid off its course or a series of smaller, but consistent blows that incrementally shift it away from its present route. These four building blocks act as those forces that are needed to dislodge the asteroid from its current trajectory.

Six Steps to Corporate Change

The reality is that no change will occur if obstacles exist. So, the first step is to identify what the obstacles are and then systematically remove them. Obstacles can be team related (e.g., resistance to change), financial (e.g., costs of change), structural (e.g., change can’t fit into the current organizational framework), or procedural (e.g., no clear process).

Second, a company needs to identify and implement best practices related to the changes. Recognizing that your company isn’t the first to make changes to adapt to shifts in an industry, there is no reason to reinvent the wheel when there may already be effective practices that will foster the mandated change. Researching and selecting those best practices then enable your company to customize them to best fit your own needs and goals.

Third, the very idea of substantial change to an organization can be overwhelming; there is so much that needs to be done at so many levels of a company to implement meaningful change. Change goals help break down the monolith of change into more manageable pieces by giving everyone within the company clear guidelines and timelines to accomplish their specific responsibilities. Change goals enable a company to more easily “wrap its arms around” the enormity of change that lies ahead.

Fourth, the motivation to change has little value without a framework and process to implement those changes. Think of it this way. Say you wanted to drive to Denver, but you didn’t know how to get there. You, of course, wouldn’t be able to get the Mile High City. The process for change is like your road map (or GPS directions) to Denver; you know your destination and your way there. This step is probably the most important in the change process because it must be both comprehensive and detailed in terms of how the change will be implemented. This process provides the company with the leadership, support, resources, and time it needs to make the change goals a reality.

Fifth, even when there is buy-in and a clear path to change,  you still may need to encourage your team to confront the challenges and endure the struggles that are inevitable when you initiate change. You can support the change process by offering incentives that will continue to motivate your people from start to completion of the change goals. These inducements can range from simple recognition of their efforts to celebrations as change goals are achieved to more tangible incentives such as promotions or raises.

Lastly, your company should put into place a set of metrics that will provide for assessing progress in the change process as well as demonstrating the benefits of the changes that have been implemented. These data will offer the company clear evidence of what is and is not working, thereby offering feedback on the effectiveness of change, the need to recalibrate, the progress in fulfilling the change goals, and the ultimate value of the changes once they are in place.

In sum, change is hard, yet change is necessary. Only by taking a deliberate and committed approach to corporate change will your company have a chance of actually producing the change that it wants or needs. And, if there is any more motivation needed these days in this crazy new global business world, the motivation to survive should push you to make the changes you need to remain an influential and vital player in your industry.

(This article was also posted at Dr. Jim Taylor’s Blog.)

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One Response to “Why Corporate Change is Difficult, But Possible”

  1. Tom Carter |

    I used to teach courses and seminars on business management, and one of the topics stressed was change and why it’s so hard to do. I had one particularly difficult experience that I used as an example of how and why efforts to change a business could fail.

    It was a relatively small telecommunications company. The company’s largest office was located in Moscow, with corporate headquarters in New York and smaller operations in several other countries. When it was acquired by a very large telecommunications company because it was in imminent danger of completely failing, one of the steps taken was to hire an excellent manager with a strong reputation as the new president. He then hired me as the Director of Administration and sent me to Moscow.

    He and I were going to overcome the problems caused by a small, entrenched group of friends who had started the company. However, “the friends” saw the two of us as interlopers, aliens sent in by the big corporation to change what they thought was just fine. For all the reasons listed in this article, we failed. After about four months, a revolution among the board of directors resulted in him being ousted as president, and two months later I was out, too. Didn’t accomplish much, but I learned a lot from it — and it was a pretty comfortable life, too!

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