As waves of organizational change sweep across the business landscape, a huge question arises: What must a leader do to make sure change produces highly profitable results?
To find out, I uncovered exactly what executives did who planned and implemented organizational change that produced $10-million - $1-billion in profit improvement.
I discovered that highly profitable organizational change requires three key ingredients. If any ingredient is missing or incomplete, then even the best plans will fail to achieve the desired results. My 3-ingredient model for all successful organizational change is the following:
Ingredient 1: Leading the Organizational Change
Ingredient 2: Handling Employees Who Resist ? or Undermine -- Change
Ingredient 3: Managing Yourself as You Lead Organizational Change
Leaders at some of America's finest companies used this 3-ingredient model to produce highly profitable organizational change. These organizations include IBM, Harley-Davidson, Intuit, City of Indianapolis, Robert Mondavi Corporation, Outback Steakhouse, Ritz-Carlton, Excell Global Services, VF Corporation, and Washington Mutual.
Ingredient 1: Leading the Organizational Change
Leading profitable organizational change requires four key actions.
Action 1: Fit Your Organizational Change into Your Corporate Culture
I found the only organizational changes that improve profits are those that fit into the company's culture. Brilliant changes that do not fit into your organizational culture will not achieve the desired results.
Action 2: Creating A Big, Exciting Vision for Your Organization
A company's real vision is not the cliché-filled mission statement adorning the company's lobby or annual report. Instead, a company's vision is a huge, compelling goal the organization aims to accomplish. For example, Ritz-Carlton Hotel Company's vision is the following: Our key goal is to be the premier worldwide provider of luxury travel and hospitality products and services. Intuit's big, exciting vision is this: Our key goal is to revolutionize the way people do financial work.
Action 3: Goal-Setting to Implement Changes
Goal-setting forms the steps that create the staircase leading to the organizational change. Employees need measurable targets with deadline dates.
Action 4: Teamwork to Produce Profitable Organizational Change
Executives leading organizational change need to get employees to use teamwork plus interdepartmental collaboration. For instance, at Egghead.com, the large company that sells technology products and services, president and COO Jeffrey Sheahan and CEO Jerry Kaplan cleverly package four meetings each week to assure teamwork and goal achievement.
First is a lunch meeting of Egghead's top five executives to discuss strategy.
Second is the "5 - 15 Report" from each manager which Sheahan reads to see how the manager is progressing on measurable goals.
Third is the meeting of all middle managers where each manager announces how he or she is doing at achieving measurable goals.
Fourth is a 20-minute "Social" for all employees; at this stand-up meeting -- no sitting allowed! -- ice cream and cake are served as employees publicly praise colleagues who accomplished wonderful things.
Ingredient 2: Managing Employee Resistance -- or Undermining
Surveys of executives reveal many organizational changes fail due to people problems. These people problems are "R-n-R": Resistance and Rebellion. Once I received loads of TV and print media coverage when I delivered a speech at a national conference in which I declared, "The major emotional reaction of employees during 3 organizational change is that they feel like their spouse or lover just walked out on them!" My statement summarized the shocking zing of betrayal practically everyone has felt for various reasons. Resistant and rebellious employees feel betrayed by their company making changes.
Prescriptions to manage the people problems include over-communicating reasons for change, "de-employing" employees who stop adding financial value, incentive pay, peer pressure to "get with the program," and celebrating successes.
Another bottom line concern is this: Employees who did fine before the change may do poorly after the change is implemented. I call them "old-style" and "new-style" employees."
Here are vital differences:
Old-Style Employees
New-Style Employees
During a speech I delivered at a company, an executive stood and dramatically announced: "As our organization undergoes major organizational changes, we always seek to cure the wounded. But, we will shoot the dissenters." Every manager in my presentation remained silent for a few moments. Then, they all burst out laughing as they recognized the wisdom of what they heard. Some resistant employees need to be "de-employed." After all, a company's purpose is to grow and prosper -- not transform rebellious employees.
Ingredient 3: Managing Yourself during Organizational Change It is waste when managers use many great techniques to lead change -- but ignore something incredibly important: How they manage their emotions and attitudes.
To learn more about this, I conducted unique research. I had leaders of highly profitable organizational change fill-out my Abilities & Behavior Forecaster? pre-employment test. My research revealed these magnificently successful leaders scored amazingly high on four of the Forecaster? test's 18 scales, namely, Optimism, Teamwork, Creativity, and Intelligence.
The fact that astounding leaders in America's best-run companies are very optimistic, teamwork-focused and creative implies that attitudes are contagious. These stellar leaders are role models. Employees "pick-up" and copy the behaviors and attitudes of these tremendous leaders. This, in turn, helps leaders implement highly profitable organizational change.
© Copyright 2005 Michael Mercer, Ph.D.
Michael Mercer, Ph.D., is a conference speaker and consultant with The Mercer Group, Inc. in Barrington, Illinois. He delivers speeches and seminars at conferences and companies. Dr. Mercer's "Forecaster?" pre-employment tests are used by companies across North America. He authored "Absolutely Fabulous Organizational Change?" and also "Hire the Best -- & Avoid the Rest?". You can subscribe to Dr. Mercer's free e-Newsletter at http://www.DrMercer.com. You can call him at (847) 382-0690.
How can you get more attention for your conference and... Read More
Perhaps the most common theme I've heard in working with... Read More
Project management is a very important business concept because it... Read More
THE MARGINAL PERFORMER: Every manager must, from time to time,... Read More
Cold Water Comments - What They Are and How to... Read More
Unfortunately, at least two thirds of much of the training... Read More
Do you ever need to find some good ideas, or... Read More
The study of Behavioral extension involves investigating the source of... Read More
The overriding goal of ISO-14000. (History 1995)As ISO-9000 becomes a... Read More
OVERCOMING FEAR OF FIRING "It was obvious that this employee... Read More
There is a new trend taking hold in business today... Read More
When we want to hire people for a corporation or... Read More
DECIDING WHAT TO DELEGATE: Once the benefits of delegation are... Read More
Creativity can be defined as problem identification and idea generation... Read More
Sometimes.In fact making some small changes to the circumstances when... Read More
Lack of Operations Manuals stunting your growth?CONTENTS:1. Do you lack... Read More
You can't build a reputation on what you are "going"... Read More
You're so excited you're practically bouncing off the walls. This... Read More
"Where did it go? It was here yesterday. Wait. Here... Read More
Purpose: Show how immersion leadership training makes strategic initiative success... Read More
Most people treat meetings as a free resource that can... Read More
If I was a fly on the wall what would... Read More
Ineffective communication is a major, yet avoidable, obstacle to business... Read More
What is the Process Approach to Quality?The ISO 9001 2000... Read More
The time will come when you'll need to interview someone... Read More
One amazing, but sadly true, fact of today's advances in... Read More
Your impact at meetings will determine in a big way... Read More
Every meeting is a laboratory where you can observe and... Read More
Talk to as many consultants as you can before hiring... Read More
Traditionally, in American businesses, the same person occupies the role... Read More
Many business people and managers are spending too much time... Read More
If you are a department, division or subsidiary manager, your... Read More
We all spend time on planning vacations. If it's not... Read More
Another IT White Elephant!It seems that almost every day we... Read More
Creativity can be defined as problem identification and idea generation... Read More
Last month, my featured article was about creating a "Stop... Read More
Times of cost cutting and downsizing has dramatically impacted the... Read More
An allegation of harassment in the workplace is a growing... Read More
Here are seven dangers of outsourcing your software development. They... Read More
Today's successful organizations are the ones which carry on open... Read More
Workers compensation secrets are hidden deep within piles and piles... Read More
The ability to solve complicated problems quickly is more important... Read More
We had a problem with handling materials in a production... Read More
GROUP DECISION-MAKING: Many managers feel they are well-versed in areas... Read More
A trainer dryly discussing how to motivate people in an... Read More
"Here is Edward Bear, coming downstairs now, bump, bump, bump... Read More
When economic conditions turn tough or when the heavy work... Read More
I have been very fortunate to travel to several countries... Read More
Every business has problems. That is why the average life... Read More
The end of the television season in May included the... Read More
Unfortunately, at least two thirds of much of the training... Read More
When you are acclaimed for excellence during times of crisis... Read More
Recently, I attended a webinar with nearly 400 other Chief... Read More
Many business people and managers are spending too much time... Read More
"The best Leader is one who knows how to pick... Read More
There's a common phrase used by Organizational Development and Human... Read More
It has been said, there is no better way to... Read More
Sometimes when I conduct my workshop on Effective Meetings, one... Read More
An ongoing series of articles exploring the seven critical areas... Read More
Creativity can be defined as problem identification and idea generation... Read More
Transitioning from Vertical Hierarchies to Decentralized / Flatter OrganizationsThe need... Read More
Marriages and corporate mergers in America have at least one... Read More
Many HR managers believe that by sending their workers to... Read More
The quickest way to cancel out all the thought, work,... Read More
Many managers believe that treating their team members as responsible... Read More
It's all very well having a flashy (and expensive) advertising... Read More
Business Management |