“The Change Equation”: A Rationale for Effectively Managing Change

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“Change has no constituency.”

So famously said Jack Welch, legendary former CEO of General Electric many years ago.  And, if you’re trying to bring about significant change in your company – even for the better – you know it’s true.  None of us likes change.

  It’s new, unfamiliar, often threatens our comfort and even, at times, our sense of security.  For most of us, change is experienced as a negative, as a loss.  We tend to evaluate the plusses of an existing situation against the negatives of the new one, failing to see that most, if not all, changes bring positives that our former situation didn’t have.

It may surprise you to learn that research among lottery winners reveals that even they, “victims” of what most of us would think of as positive change – that is, getting rich – are not necessarily happy campers.  The reason?  Their new-found wealth changes forever the life they once knew, and the loss of that familiar life outweighs the healthier bank account for a surprising number of them.

So, what does that mean for you if you’re trying to bring about productive and positive change in your company in order to drive improved business results?  First, it means that “forewarned is forearmed.”  You’re much more likely to be successful if you go into your change project expecting resistance – and you plan for it! – than if you kick it off naively expecting you’ll be welcomed with open arms.

Elements of the Change Equation

But how do you “plan” for dealing with the inevitable resistance that change always brings?  In the course of our years of consulting to clients of all sizes and in many industries all over the world, we’ve always been guided by the “Change Equation.”  Here it is:

Change = Force (A, B, C, D, E) > Resistance

A = Sufficient dissatisfaction with the status quo

B = Belief that change is possible

C = Clear agreed-to goals (vision)

D = Awareness, understanding of first steps (momentum)

E = Contact with, support from others (“I’m not alone”)

— adapted from Beckhard, Harris & Gleicher.

In words, the Change Equation simply says that “change takes place when a force (F) is applied that is greater than the resistance (R) to change.  And the “force” needs to be composed of all the elements listed in parenthesis.  So, at least, now you know what ingredients your change project must have in order to have a chance of succeeding.  No guarantees here.  Change is hard.  But at least now you can begin “forewarned” with some fundamental principles to go by.  Let’s review them.

 Making the Case for Change

Whoever said “you shouldn’t waste a good crisis,” understood the “A” element of the Change Equation.  Making change when things are going badly in your company, generally speaking, is going to be much easier than when conditions are sunny.  For example, a US auto-industry supplier we worked for, whose entire business consisted of supplying steel to the US auto industry, was in a strong change position in 2008 when that industry was imploding.  The workforce clearly understood that diversification meant the difference between “life and death” for the company, and faced with this “crisis,” employees understood it was “now” or maybe “never.”

On the other hand, if you’re like another client of ours who decided, at a time when business was very healthy, to make “doubling the size of the company in five years” the cornerstone of their strategic plan, you need to be prepared for some significant resistance born of the question:  “Why do we need to do this?”  This means you’ll need to very intentionally and concretely develop and communicate a sound and compelling “case for change” that provides a clear rationale for  “fixing” something when most folks are likely to feel that “in ain’t broke!”

Your case for change will also need to convince people that the change you seek is really doable, element “B” of our Change Equation.  So our auto-supplier client had to clearly demonstrate “how we can diversify in time to save the company.”  The client in our second example had an arguably even more difficult task:  to clearly show how a company that was performing very well already could actually ramp up business sufficiently to double its size in five years.

Creating a Compelling Vision

Regardless of which of the above situations most resembles yours, the real key to building your convincing case for change is motivating people to support you by creating a compelling vision of where you want to go – element “C” of the Change Equation.  Obviously, for our auto supplier, survival is much more attractive than going out of existence as a company.  Our second client, though, given their rosy business situation, had to create a very vivid picture of an even more desirable state that would be achieved when the company doubled in size.

The power of a compelling vision is legendary.  Consider Henry Ford’s:  “To democratize the automobile.”  Or Sony’s, initially set in 1950’s post-war Japan when Japanese products were synonymous with “junk”:  “to become the company most known for changing the worldwide image of Japanese products as being of poor quality.”   Both these visions implied massive change, yet, as we know, both enterprises succeeded notably in successfully marshalling their forces toward the achievement of unprecedented business results.

Mobilizing Concerted Action

Speaking of “marshalling forces,” that’s exactly what Change Equation elements “D” and “E” are all about.  Once you’ve created and communicated a compelling case for change along with a long-term vision, you need to translate that vision into action.  The sooner you can do this and generate “quick wins” in line with your stated vision, the sooner you begin to build momentum for the change you’re trying to bring about.

To do this, you’ll need to identify opportunities for people in your company to get involved  in meaningful ways toward achieving your change vision.  Consider efforts such as optimizing a flabby process, reducing waste or rework in a production facility, or accelerating the focus and speed required to achieve a key project deliverable that may be behind schedule. Within clearly defined boundaries, you must provide people who are closest to that work with the chance to make concrete improvements in those areas.

If you have no experience in this arena, consider importing tried and true empowerment methodologies such as GE Work-Out, for example.  (Approaches like this one have been proven effective over many years, and outside providers can be relied upon not only to demonstrate how they work but also to transfer these skills into your company for the long-term residual benefit of your workforce and your business as a whole.)

Building Change Momentum

Above all, once individuals and teams experience early successes in supporting your change project, make sure you publicize and celebrate those results vigorously.  You want to reinforce the behaviors you’re looking for and encourage them in others who may not yet have accepted the change.  You need to “fan the flames,” as it were, until these “small fires” catch on and become “bonfires.”

Once this happens, you’ll be well on the road to overcoming the predictable resistance that every change agent encounters.  More importantly, you and your company will also be benefitting from the forward progress and better business performance that all too few change agents actually succeed in bringing about.  And that’s the kind of change that everyone is happy to accept!