Explainers

The Principles of Change Management That Transform Organizations

Overcoming skepticism is often the biggest challenge that organizations face—but together, change is possible

The biggest obstacle to leading change within organizations is rarely a lack of strategy, inadequate funding, or even overstretched teams. It’s the shared belief that change is impossible. Talk to any team facing a monumental change, you’ll often hear statements like “This place will never change,” or, “I’ve heard this promise before and I don’t buy it,” or even a resigned and aloof, “Good luck with that.”

How Skepticism Prevents Organizational Change

This skepticism (and often outright cynicism) is so challenging to the change management process because it creates “a genuinely worrying prospect, a future without hope of meaningful change.” Unfortunately, if teams aren’t willing to try anything new because they’re already convinced that nothing will change, they’re probably right—it’s self-reinforcing. This isn’t to say doubt isn’t merited, or that teams have to wholeheartedly embrace change from the very start. In many cases, a certain level of skepticism is a rational response to a promised change initiative because:

Change management takes a long time. It can take months, years, or even decades to implement change. And for teams feeling immediate, concentrated pain, “eventually” may as well be “never.”

There’s no guarantee you’ll achieve success. Not only does implementing change take time, folks have been burned by false promises and prior failed attempts—why should they believe that this time will be any different?

Change management isn’t linear. There’s no straight path from beginning to end, and no blank slate to start from, which makes it hard to feel like progress is being made. Ironically, when successful implementation does happen, teams forget they’ve ever worked any other way, and that they have the capacity to change.

Venting about the status quo is easier. Complaining is a way to bond with others—who hasn’t indulged in grousing with coworkers over drinks? Not to mention, it’s much easier and less risky than actually trying to implement change.

Organizations Can Choose to a New Direction

And yet, change does happen. If there’s one silver lining to be found in all the sorrow and stress of the pandemic, it’s definitive proof that the cynics are wrong: organizations were forced to adapt to a changed environment. Management made major changes like shifting to remote work and adopt hybrid work policies, acknowledging mental health, triaging supply chain dilemmas, and rolling out new products and processes in response to COVID-19. At the same time, organizations were increasingly expected to respond to social issues, beginning with a greater investment in DEI efforts.

Organizational Change

NOBL has helped world-famous organizations stop talking about change and instead start making change. Reach out to see how we might be able to help your organization.

The good news is that change doesn’t have to happen in reaction to extreme events. Organizations can choose, on their own terms, to work differently. They can consciously design the company culture they want, incentivize desired behaviors, and implement and scale these over time. Our experience with hundreds of clients in dozens of industries has shown that together, change is possible. In fact, we’ve adopted that phrase as NOBL’s internal creed: our single most pervasive and persistent belief as an organizational culture.

From One to Many: How Organizational Change Starts

The Human Side of Change Management

According to social cognitive theory—a model for understanding how individuals learn—you need to address two key factors:

Self-efficacy is a person’s belief that they can succeed in a specific situation—that they have the ability, and perhaps more fundamentally, the option to do something different. Various factors contribute to this belief, including:

  • Performance accomplishment: If they’ve changed before, they can manage change again. Remind people that they have definitely changed over the past year. Once you’ve gotten used to a new way of working, it’s easy to forget you ever did it another way.
  • Vicarious experience: They can learn from others’ experience. If a colleague has changed, they can, too.
  • Verbal persuasion: Others can convince people that change is possible by sharing facts, anecdotes, and perhaps a little enthusiasm. Note that this typically doesn’t work with the truly skeptical; they need direct evidence of change, and no argument will trump their evidence.

Outcome expectancy is what individuals expect to achieve. People need to believe different behaviors will lead to different outcomes, and understand both the benefits of action and the cost of inaction—a trade-off often left out of organizational change narratives.

Change Is a Self-Fulfilling Prophecy

Of course, one person’s actions alone can’t lead to complete organizational change. (Even Steve Jobs, who is popularly known for his authoritarian leadership style, took 1.5 years to turn around Apple on his return.) But simply by doing something different—by making little changes to the day to day activities that individuals do control—an organization can build momentum and social proof. According to Stanford researchers, “Just learning that other people are changing can instigate all these psychological processes that motivate further change. People can begin to think that change is possible, that change is important and that in the future, the norms will be different. And then, if they become persuaded and decide to change, it starts to become a reality.”

There’s nothing more gratifying than seeing organizational change happen in real-time with our clients. Old hands that couldn’t envision things ever getting better “don’t recognize the place” while new members are thrilled to feel a sense of efficacy in their workplace. Altogether, when folks see whole business units work together anew, it not just broadens a sense of possibility for the future but a deeper belief in oneself.

The Leader’s Role: Proving Organizational Change Can Happen

While there’s evidence that feelings of skepticism and cynicism are actually increasing in institutions, many leaders choose to either ignore it or even surrender to it. Many leaders feel that to address it is to somehow fuel it, and some even feel that skepticism itself is impossible to change. Neither is true.

Teams need to know that leaders are aware of their skepticism. They need to hear a vision for change that’s grounded in reality, especially if this is a second or third attempt at change management. Leaders are keen to remember that where there’s change, there’s always skepticism. A leader might hear it for the first time, but it’s undoubtedly been among their teams since the beginning.

Moreover, leaders have to do more than say that change is possible. Indeed, too much early enthusiasm and pressure can reinforce skepticism. Top management in particular have to demonstrate the company’s ability to change, starting with themselves. A leader’s personal change and transformation can be revelatory, especially for tenured folks who might have developed a fixed mindset about what’s possible.

Managing Change Top-Down and Bottom-Up

After personal change, leaders must promote change management by empowering teams to take key roles in change projects. This effort includes many responsibilities, from storytelling to accountability, but one that’s often overlooked in practice is removing obstacles: teams rarely have the power that their leaders have to say “no,” whether to bureaucracy, competing priorities, or even other teams. When it comes to change management, a good leader isn’t necessarily the quarterback, but instead a lineman, protecting teams and buying them time for managin change.

Finally, once teams do make a successful change, then leaders have a responsibility to champion and amplify it. This is when cheerleading and enthusiasm are their most impactful, and when skeptics and cynics are most likely to change their beliefs: when they see irrefutable proof that change is indeed possible, together.

A New Change Management Model for Ambitious Organizations

What organizations really need, then, is a structured approach to change management that ensures change isn’t just a one-time event driven by a lucky or persistent “rebel,” but rather, a muscle within the organization that grows stronger with practice.

To develop this new change process, we borrowed ideas from traditional change management, as well as complexity science (a new scientific field that emerged in the 1980s and 90s), human-centered design, and agile and lean methodologies. Most importantly, we experimented with real teams and their messy problems. Over a span of five years, and in partnership with some of the world’s most famous organizations, we tried dozens of novel combinations of change management processes, aiming for the following outcomes:

Rapid proof. If the shared belief that “change is possible” is so critical to long-term enterprise change management, could we produce short term wins that serve as tangible evidence that change is, indeed, possible? Could we confront skepticism and even cynicism, not with arguments or empty gestures, but with real proof of change?

Overcoming resistance. Could we confront, head-on, the feelings of loss (of control, time, competence, and so on) that folks naturally feel amid any significant change?

Enduring impacts. Could our changes stick? And not just when it was safe to experiment—would teams continue to embrace change management and adaptation when uncertainty and pressure mounted against them?

Increased capacity for change management in the future. Could we design a process that would ultimately work within organizations without our support in the long-term? Would they be more comfortable managing change in the future?

The Success Factors That Impact Change Management

As we chased those outcomes, we found that the following mindsets and methods were essential to successful change management:

Co-creation: When we let go of our need to be perceived as experts, and just asked teams what they’d always wanted to try, we saw a dramatic increase in and efficacy of change management. Teams who designed their own change initiatives had greater motivation and resisted loss less. So we embraced our role as coaches in their process, helping teams troubleshoot blockers and stay on track, rather than leading change and trying to prove just how smart we were.

A behavior-first approach: Decades of social science tell us that behaviors change attitudes, not the other way around. Yet so many change management models obsess over communications plans and catchphrases, desperate to persuade people into changing. Just as a smoking cessation patch beats a scary PSA in helping folks actually quit smoking, creating a safe environment where teams can try new behaviors together works better to produce change than any comms plan or sizzle reel. In our process, when communication efforts do kick in, it’s to tell the story of teams who are already managing change—not idolizing change itself.

Different methods for different types of change: Generally, change management within organizations happens in two ways: some changes, like reorgs, mergers, and leadership transitions, need to go mostly right the first try. That’s because they affect the entire organization and are painful to reverse. So while no change can be guaranteed, these transformation projects need to be as “fail-safe” as possible.

Other elements of organizational change—new processes, tool implementations, corporate culture rituals—actually benefit from rapid iteration, and can be reversed without much cost or harm. These interventions should be designed as “safe-to-fail,” where rapid experimentation and constant iteration lead to better solutions, all without causing irreparable harm.

Most enterprise-wide change programs (like a reorg or strategic pivot) involve both types of change management, as well as a way to continually connect the dots between the two. Once we started applying these principles, we saw a major uptick in our success rate, as clients gained a deeper understanding of how the different changes we were making impacted each other.

Change management as competitive advantage: The most successful organizational changes are led by executive teams who see change as an ongoing competitive advantage, not just a one-time endeavor. These leaders demanded not just our coaching and expertise, but an expectation that we would leave their organizations better equipped to respond to change.

Putting these lessons together, we are excited to finally unveil our approach to organizational change management that we call “Change Making.”

Introducing Organizational Change Making

In practice, Change Making is a complex process due to the very nature of organizational change itself. At a conceptual level though, it’s easy to grasp.

NOBL’s Change Management Process

First, in any new organization, we orient ourselves. Our primary goal of this step is to understand where the organization needs to go, and what resistance to change management to expect. This isn’t a traditional change management consultant’s “discovery” phase: in fact, because of our training in complex systems, we don’t believe you can describe an organization accurately just through interviews and surveys. The real understanding comes when you start the change process, which reveals where power lies, what triggers resistance, and which divisions lean in versus those that “wait and see.”

As a result, this step is also much faster than a typical discovery phase, and culminates in a portfolio of change initiatives sourced from staff themselves. We ask team members to suggest proposed changes, and facilitate retrospective meetings with cross-functional groups to identify way to improve current processes. We’ll deploy surveys, too, but largely to define a set of baseline metrics to compare against over time.

Second, we bring together a diverse group of key stakeholders and align on the road ahead. With most clients, this looks and feels like a highly effective offsite or retreat for their executive team, people leaders, rising stars, and cultural torchbearers. We’ll share the overall future direction of the organization (framed in simple “from ____ to ____” statements) and the ideas for change projects that their folks generated. The group works through those ideas to arrive at an initial portfolio of desired future outcomes (e.g. “greater customer centricity”) and prioritized interventions. Our goal is not only to determine the work ahead, but also create buy-in early in the process and enlist an army of advocates for implementing change across the organization.

Third, we divide the desired changes into “Fail-Safe” and “Safe-to-Fail” paths. For a fail-safe change program, while the cost of failure may be high, the solution set is usually finite, even small. (For example, even though consultants “reinvent” the matrix org structure each year, there are really only a handful of ways to organize people in a company.) We determine the possibility set, weighing the tradeoffs of each, and then engage leadership in a process of balancing those tradeoffs against the future growth plans of the organization. Then, we plan the roll-out of these changes while reducing change resistance.

For safe-to-fail changes, we organize cross-functional teams, or “Squads,” to prioritize, test, and improve upon the initial set of ideas suggested in the Orient step. This process looks akin to agile software delivery in that the project team meets weekly to define what they’ll try, and then reports back on what they’ve learned and any necessary adjustments. Once successful, we then implement the change on other teams.

Throughout this process, we integrate the changes being made across both paths. For example, to become more customer-centric, an organization might try a reorg to focus on critical customer segments (a fail-safe change) while also redesigning their decision-making processes to include more customer feedback and insights (a safe-fail change). We stitch these changes together to produce the desired outcome of greater customer-centricity. We’ll also survey the organization at this point to measure project outcomes and their impact on the organization’s change goals.

Fifth and finally, we equip the organization to no longer need us for change management. Throughout our process, we train internal champions in our change management approach, but this is the moment when the group codifies those lessons into a unique “Change Management Playbook” for the whole organization. For our enterprise-sized clients, this step typically involves forming a center of excellence to lead change management within the company in the future. Organizations that have continued to use a modified version of our approach to Change Making have identified millions of dollars in both operational efficiency and new opportunities.

Change Management for the Real World

We expected to find the answer to, “How do you actually make change in organizations?” in existing literature or practice. And while we found inspiration, we didn’t get a real answer until we experimented in partnership with our clients. Over the past seven years, this change management model has consistently produced meaningful change across a radically diverse set of companies, cultures, and contexts. We firmly believe that, in the world of organizational change management, it stands alone in terms of both potential impact and holistic understanding—not so much because we favor what we’ve created, but because we’ve tried the rest.

Why Organizations Must Design for the Future, Now

In 2020, COVID forced organizations to change: it’s “easier” to go remote when the only other option is closing up shop. Teams rallied around the flag, while leaders had leeway to respond to rapidly changing conditions. But now that the initial crisis has passed, organizations have options. Do teams continue remote work indefinitely, or return to the office? Can—should?—teams maintain the harmony they established during the pandemic? How must leaders adapt now that there’s greater ambiguity and subjectivity? And how can organizations address the increased burnout in their stressed, overworked employee?

Workforce Macrotrends Will Demand Greater Change Management Skills

As leaders start to sift through these questions, they must also keep an eye on some of the fundamental changes that are occurring within the economy:

Power is shifting to workers. A variety of factors, from concentrated demand to lingering COVID restrictions, is creating short-term labor shortages and allowing employees to be more demanding. In the long term, the broader trend of declining birth rates means the labor pool is shrinking—a major shift that managers who “came of age in an era of abundant workers” will be forced to adapt to.

Technology is forcing organizations to reconsider how jobs are performed. Thanks to the widespread availability and ease of digital and communication tools, remote teams weren’t just able to scrape by, they increased productivity by 5%. Meanwhile, other organizations—manufacturers in particular—are increasingly relying on automation in order to manage their labor shortage.

Organizations are being asked to solve bigger problems. Consumers believe that businesses are the only institutions that are both competent and ethical enough to effect change, and increasingly expect them to take a stand regarding social and environmental issues.

This is the time to think strategically about work, and design your organization for the future—not just in response to COVID. After so many months of change happening to teams, it’s a unique opportunity to reclaim your agency, and decide what changes you want to make. By applying the right change management approach to your biggest challenges and rallying others, change really is possible, together.

What’s Next in Change Management for Forward-Thinking Organizations

Ultimately, while Change Making creates lasting systemic change within organizations, it always starts with the individual: an ambitious and empathetic change leader who believes that a different way of working is possible; who wants to create cultures that allow people to do their best work. Some of the most pressing issues we’re addressing with them right now include:

How do we set strategic direction in a more complex world?

How can we design hybrid work that doesn’t produce wildly divergent employee experiences?

How can we re-balance the responsibilities for establishing work-life balance and maintaining employee morale?

How we can deploy talent development systems that act as a competitive advantage?

When future historians look back, 2020 may very well be considered a pivotal year in the world of work; a clear dividing line between old and new ways of operating organizations. The adaptations teams made in order to survive revealed that many of the fears organizations had about change management were simply unfounded. If teams take nothing else with them from the trials and tribulations of the past years, we hope it’s the knowledge that change is possible—and that now, as we move into an uncertain future, they have the necessary skills, and the opportunity, to manage change.

Realistically, of course, this transformation won’t happen overnight, as teams are only starting to figure out optimal working conditions. But the sooner you start, the greater your competitive advantage.

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Published January 15, 2022

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