Managing change

FiveThings I Wish I Had Known at Age Twenty-One

  1. Those recommended medical test are really  important: A routine colonoscopy would have caught pre-cancer changes before they developed into stage four cancer. Today I am a cancer survivor, but not without paying a big price—three major surgeries, chemo, and radiation. All three damage the body and limit downstream physical abilities. 
  2. Success comes from opportunities not solving problems: I started my career as a CPA and transitioned to business after three years with Price Waterhouse. I envisioned myself as a problem solver. The difficulty with that was that there is always another problem right behind the previous one. I discovered that most problems work themselves out. They are solved in the course of opportunity pursuits. After years of on-the-job training, my motto has become “Not all problems deserve to be solved; of those that do, not all of them need to be solved by me."
  3. Going second-class only costs a little more: That is a joke phrase, but it was intended to remind me that trying “to get by on the cheap” usually requires a do over in the end—costing more time and money than if things had been done right to start with. I wasted a lot of money and time because the people around me were always trying to save me money.
  4. You must learn to manage change: “Change” is such a constant in business and life that I wish I had understood its behavior and how to manage it from the start of my adult life and business career. Instead, I had to learn it the hard way—from my mistakes. 
  5. Every decision, action or inaction defines our future: With an earlier deep appreciation of the Opportunity Wedge, I would have made a conscious effort to elongate the wedge—make it more like a rectangle—keeping the lines, that represent who I am and who I could be, parallel as long as possible.
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The most important lesson to learn from Relative Perception and Limited Resources is that small changes (or proportional changes) are more likely to succeed.

Exercising Incrementalism is one of the best change management techniques.  Breaking a planned larger change into a series of smaller incremental changes is more likely to achieve the desired end result with less overall negative impact on the organization.  However, incrementalizm alone is not a silver bullet.  Granted it is possible to make changes so small that the effect of the downward spike goes unobserved, but frankly, when it comes to real life business, there are few changes that fly under the radar screen.  For example, we know that a massive doubling of a company’s sales force can create chaos,  but even a small change has negative consequences.  To illustrate, assume that a company adds just one new sales person.  That change might not have had a material negative impact on the entire organization, but the salesman sharing office space with the new person is likely to see a drop in his commissions as he unavoidably gets drawn into some degree of a mentoring or training role.
Virtually all change becomes, at a minimum, a short-term investment paid in the form of lower productivity, decreased performance or lower satisfaction.  We make changes because in the long run, we expect a payoff in terms of increased productivity, performance, or satisfaction.  The better we manage change, the smaller the frontend cost and the sooner targeted gains are realized. 
The right way to implement change is proportional to the ability of the organization to deal with and absorb the downward spike of the Change Curve and in many cases that will dictate the need to pursue the desired end result through a series of incremental steps using the “change management” technique of Incrementalism.

To illustrate the need to keep change proportional to the organization’s ability to absorb the change, consider a successful restaurant that wants to expand.  The owners decide to open a second facility across town.  It is easy to imagine the downward spike in terms of performance and customer satisfaction at the existing facility as management’s attention is redirected and existing staff begins to train additional staff.  Image the consequences when some of the best members of the kitchen and wait staff are transferred to the new facility.  That doubling of the organization requires a significant, hopefully short-term, negative investment that can put the business as a whole at risk.  Yes there are things that can be done to flatten the downward spike of the Change Curve and facilitate an early upward movement.  Unfortunately most small businesses making a similar move will fail to do those things, and their customers and pocketbook will suffer as a result.
Now consider the impact on existing facilities upon opening a third location.  The organization’s initial expansion has led to increased depth among its management team.  There is a larger existing staff to draw from for the purpose of training new additions, and there is backup that allows some transfers to the new location without excessively cannibalizing the existing facilities.  Opening a fourth location will have even less of a negative impact on existing facilities.  With continued growth the organization can develop and financially support people dedicated to the specialized task of project management involved in bringing a new location on board, and the larger and larger organization spread over more and more facilities means that transfers have a smaller negative impact.  So as the base organization gets larger the size of digestible incremental change increases; however what makes the larger changes digestible is that each successive incremental changes becomes smaller in relative size—the percent of change related to the base organization is smaller.
The undeniable conclusion is that the right way to make change is to do it step by step—incrementally.  You might say that is not always possible.  The growing food chain has to take that first big step—opening its second facility.  But even there it is possible to find a way to break the project into multiple steps designed to minimize the downward spike.  For example, additional staff can be added ahead of time in small digestible steps not after the fact.  What about the added cost?  If you can’t afford it, don’t do it, because the alternative is to bet the company!
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We all like to be recognized for our contributions and achievements.  Effective change management looks for opportunities to provide an upward push against the downward spike of the Change Curve with awards and recognition tied to the KASH formula.  Examples include:
  • Certificates for completing training courses designed to deliver “new knowledge”
  • Lapel pins recognizing milestone achievements
  • T-shirts, hats, and/or jackets with goal-oriented messages reinforcing the purpose of the change
  • Cash awards for individual or team accomplishments
Nothing encourages success more than success.  Many a weight loss regime has been given an important boost by an early, quick weight loss.  Setting initial goals that are quickly achievable, and then recognizing their accomplishment through ceremony and awards, reassures those going through a change that “it is working.”
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Limited Resources

Relative Perception influences the downward spike of the Change Curve but an even more profound influence is the natural limitation on resources.  Large changes have put many companies out of business.  The depth and width of the downward spike becomes too big to overcome.

A not infrequent example is that of a small company in a relatively fast growing market that wants to significantly increase sales results.  A new sales manager is hired (or worse, their top salesperson is promoted) and given the objective of doubling new account acquisition.  The plan seems simple enough.  To double sales, double the sales staff.

Only the objective is never realized.  In fact, if you double your sales force quickly, sales typically fall through the basement.  Why?  It takes time for new additions to become productive.  So while new salespeople aren’t yet productive, the original salespeople are spending much of their time mentoring, training, and answering the questions of the new people.  Never forget Parkinson’s Law: work creates work.  Deploying new resources is work.  Like it or not, the introduction of new capacity actually decreases productivity until those new resources are deployed and fully productive.  Do it too fast and you can put an organization out of business.
For an enterprise purposefully pursuing long term success, there is no such thing as unlimited resources.  It makes no difference if you could actually double the sales force, triple it or quadruple it because you have the funds.  It makes no difference if un-deployed labor, capital, or material is available.  Deployment, not availability, is the issue.  Resources have to be deployed to become productive and deploying them consumes existing resources and energy.  The concept of limited resources due to deployment is like an hourglass.  You may have access to labor in the case of the sales staff example, but the only way you can successfully deploy those additional resources is incrementally.  You have to get them through the neck of the hourglass, if you are to deploy them without a large negative impact on performance. 


As an enterprise grows and begins to compartmentalize into specialized segments or departments, sub-optimization, another natural negative change, will occur in the absence of clear leadership and frequent communication.  Sub-optimization is the condition where a specialty area gives their own objectives a higher priority than that given to the common objectives of the organization.

The tendency is a natural phenomenon and must be managed and controlled.  Where conflict exists between the unit goals and those of the organization as a whole, sub-optimization is damaging and distracting.  For long-term purposeful success the organization must be consistent and proactive in maintaining harmony between the unit’s goals and those of the organization.  Communication is essential in that process.  A sales department’s goal to achieve quota can lead to over promising and under delivering.  The legal department’s objective of protecting the firm from liability can result in one-sided unrealistic terms.  A shipping department’s goal to avoid overtime can result in late deliveries to customers.  The marketing department’s goal for maintaining a uniform message can strangle the organization’s efforts to reach diverse segments of the market.
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Managing Change-KASH

In order for the downward spike of the Change Curve to be stopped and the upward movement to occur to the point of achieving the targeted higher performance, those involved must have four things: new Knowledge combined with the right Attitude to acquire necessary Skills which through use become Habit.

The people affected must acquire new knowledge—for the sake of illustrating what I mean by new knowledge, think of a user’s manual or training.  The receptionist trying to deal with a new phone system has to be trained, and equally important all the people in the office have to understand how their piece of the system works including its new benefits and features.  If they have been given that prerequisite knowledge, or eventually dig it out themselves, then with the right attitude they will acquire new skills (the skill to use the new equipment and features).  In short they will know how, but until those skills become habit, higher performance will go unrealized.  It is only over time that those skills become habit and allow the Change Curve to reverse its downward trend turning upward from its low point, the valley of despair, to climb up to targeted performance.  It is like a golfer or other athlete who develops muscle memory.  Taking advantage of the new equipment and benefits has to become instinctive.  If you have to take the time to check with others, refer to a checklist or open a user’s guide, the new system will still be getting in the way of performance.

When a receptionist dealing with a new phone system says “If you ask me this has just made things worse,” she is the victim of a lack of proactive change management. Sooner or later, in the example of the phone system, the organization will survive and get some of the desired benefit of upgrading its phone system—but not before hurting its performance and frustrating its people and customers for some period of time.  But other changes, left to similarly fester, can literally put a company out of business.  It is a scenario I have seen played out many times. 

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The Change Curve

Business success occurs through change.  The organization seeking purposeful long-term success pursues Excellence and Lead Positions.  It practices Constant Innovation.  It diligently simplifies and eliminates.  It practices Management Judo and guards against developing weaknesses internally.  The organization that does not do those things is at the mercy of the natural forces that change us for the worse.

I am reminded of a TV commercial.  Unfortunately I can’t remember what the ad was for.  It showed a harried office receptionist trying to handle incoming phone calls.  She says, “They told us that this new phone system would make everyone more productive.”  There is a long pause.  She looks into the camera and says, “If you ask me they have just made things worse.”  To understand why things got worse, you have to know what change looks like.  We make changes like the new telephone system because we want to move to a new level of performance or benefit as illustrated here. 

In the real world that is not the way change behaves.  Change creates a sharp downward spike in performance—the bigger the change, the bigger the downward spike.  The less investment made in preparing for and managing change, the bigger the downward spike.  The Change Curve turns upward only over time, and the rate of that upward climb is dependent on how effectively the change is managed. 

PS: My new novel, The Claret Murders just got another great review from one of the professional review organizations.  This is what Kirkus had to say: "Collins keeps the story motoring with writing that is frank but not scant, muscular but not tough-guy, something akin to the 1960s TV show The Man from U.N.C.L.E.”  You can get e-book copies (Kindle, Nook or Ipad) for just $2,99 or the printed copy for $15.99.