Leading Successful Change

In December 2005, I attended a Business Executives Symposium in Venice, Italy, organized by Promostudio, on the eve of The Nobels Colloquia in Venice, a yearly gathering of some of the best minds in Economics. One of the presenters was Professor Douglas Anderson (left), Dean of the Jon M. Huntsman School of Business, with whom I had the pleasure to share dinner along with his wife and Nobel Laureate Amartya Sen, Professor Jean Paul Fitoussi and my colleague Klaus Regnault. During dinner, I had the opportunity to learn more about his viewpoints on how to lead towards successful change.

Professor Anderson says that the pain of change comes from not from the change itself but from the losses, the endings, the anticipations and the transitions they are resisting. Beliefs, fears and unmet needs shape behaviors and they in turn shape consequences. If we are going to encourage change, we need to deal with the mindset, the beliefs set. It's no use to talk about how great the outcome of change will be without addressing the psychological component in a very direct way.

Professor Anderson emphasizes that this story tells us that the pain we associate with change is not so much the new thing that we need to take on but is the old thing that we have to let go. Michael Beer of Harvard Business School offered a perspective on the issue of successful change in his classic book, "Organization Change and Development: A Systems View." He summarized a successful organizational change process with a simple formula:
Successful Change = (D x M x P) > C
D = Dissatisfaction with the Status Quo
M = A new model for how the Organization will be run
P = A planned process for managing the change
C = Cost of the change to individuals and groups

Beer's insight into successful change says the combined effect of the dissatisfaction, the new model and the planned process must be greater than the cost to people and groups (even emotional and psychological cost). The relationships among these three are multiplicative. If any one of them is missing, there will be a zero value and the cost will be far too great. Result: no successful change.

Since change is the function of leadership, being able to generate highly energized behavior is important for coping with the inevitable barriers to change. Just as direction setting identifies an appropriate path for movement and just as effective alignment gets people moving down that path, successful motivation ensures that they will have the energy to overcome obstacles.

Professor Anderson reminded his Venetian audience that, during transitions, we need to let the grieving process take place, just like Elizabeth Kubler Ross described it in her work: Shock - Denial - Anger - Depression - Bargain - Acceptance and Exploration of the New State. It's easy to get stuck in one of these stages and we might cycle back into one of them. In corporations, it's easy to see how leaders react to external changes in the market by forming a task force that will bring about change in the company to adapt; yet, very rarely they ask themselves: "What must I do to change?"

Learn how you can lead towards successful change