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Assessing Organizational Readiness for Change

What's Inside This Chapter

The Dismal Statistics on the Failures of Change Management

As should be clear by now, every organization, no matter how successful—and perhaps because they are successful—must embrace change as a central ingredient in its long-term success. Change must become part of the organization's culture, its way of being.

This isn't news. Most progressive, proactive organizations fully embrace the idea of embracing change. In reality, however, too few have developed the capacity or the will to introduce, lead, and manage change effectively. Here's some evidence:

• A survey conducted by Kepner-Tregoe in 1993 revealed that for 11 different types of change initiatives (including productivity improvement, quality initiatives, cultural change programs, empowerment/involvement activities, and reengineering), only 20 percent of employees indicated that these initiatives met or exceeded expectations (Spitzer, 1996).
• This same Kepner-Tregoe study found that 43 percent of nonmanagerial respondents to a survey said that their companies' downsizing and cost-reduction efforts had not met or met only slightly the objectives set. Nearly half of respondents said the same about their companies' restructuring goals (Spitzer, 1996).
• A study of 584 companies in the United States, Canada, Germany, and Japan conducted by Ernst & Young and the American Quality Foundation found that the majority of quality initiatives failed to achieve significant improvement (Spitzer, 1996).
• Michael Hammer and James Champy (1993, p. 221) estimate that “as many as 50 to 70 percent of the organizations that undertake a reengineering effort do not achieve the dramatic results they intended.”
• In a study of executive perceptions by Kepner-Tregoe (1994, p. 8), nearly two out of three executives surveyed believed that employee morale was “worse” or “the same” as a result of change initiatives that were undertaken by their organizations. More than 60 percent of these executives rated their employees' reactions to organizational change as neutral, skeptical, or actively resistant.
• Kepner-Tregoe (1994, p. 16) also report that two out of three executives admitted that their organizations' internal systems (the infrastructure of their business) were “worse” or “the same” overall as a result of their change initiatives.
• A recent study by consultant and author Rick Maurer (1996, p. 56-64) found that one-half to two-thirds of all major corporate change efforts fail.

Although these statistics present a rather dismal summary of our collective track record, they do help create a compelling need for you to figure out how to do this thing called organizational change better.

Your Organization's Change Management Track Record

George Santanya, the Spanish philosopher and essayist (1863-1952), once said “Those who forget the past are doomed to repeat it.” His reflections on the human condition and the path of society are especially true on matters of organizational change. Too many change initiatives fail because the change leaders fail to reflect on their organizations' history with change and on the role that culture plays in facilitating or resisting change.

So, before exploring a model for introducing a new change, it might be useful for you to first focus upon your organization's history of introducing change. Ask yourself these questions:

1. What has gone well with your organization's past change initiatives? What aspects of past change efforts achieved their target objectives? Which of these successful aspects could you use as a model for introducing future changes?
2. What hasn't gone well with the organization's past change initiatives? What aspects of these past change initiatives missed their target objectives? By how much did they fail to meet objectives?
3. What factors contributed to the change initiative's success or failure? What beliefs and behaviors by individuals, teams, departments, and the organization as a whole contributed to the root causes of the change effort's success or failure?
4. What are the lessons learned from your organization's past successes and failures with past change initiatives? What would you recommend that today's change leaders do differently on new change initiatives? What current practices and approaches to change would you advise them to keep doing as they approach future changes?

The results from this self-assessment of your organization's past change efforts can bring a healthy perspective to your future change initiatives. By reflecting upon the root causes of what has worked and what hasn't worked in the past, you can be prepared to do the right things and avoid the actions that can erode the success of your change efforts.

Before beginning a change initiative, reflect on your own organization's past success with introducing change, review the most common causes of failed change initiatives, and then develop a change strategy that reflects your best thinking on what to do (or not to do) to work toward a successful outcome and reduce your likelihood of failure.

Why Change Initiatives Fail to Achieve Their Objectives

Fortunately, you can learn what to do and what not to do by studying the experience of others. The authors' research into the factors that contribute to a change initiative's success or failure offers some useful tips for ensuring that your change initiative starts off on the right foot. The 11 most common causes of the failure of organizational change efforts are summarized in table 3-1 and described in more detail in the paragraphs that follow.

1. Lack of urgency: Many change efforts fail because they have failed to create a felt need or a sense of urgency throughout the organization. Before selling people on the opportunities and benefits of a change, people must first experience the need to change.
2. Lack of a shared vision: “Where there is no vision, the people perish” (Proverbs 29:18). Without a truly shared vision of the destination of the change, stakeholders are likely to remain in the dark as to the purpose and intention of a change, making it much harder for them to bring their positive energy to help drive the change.

   Table 3-1. The most common causes behind the failure of change initiatives.

   1. A lack of urgency
   2. A lack of a shared vision
   3. An absence of measurable outcomes
   4. A failure to communicate the vision
   5. Being surprised at the resistance to a change
   6. A failure to integrate dissident perspectives into the change vision
   7. Failing to anticipate and confront obstacles to the change
   8. A failure to integrate lessons learned into the change vision
   9. An ignorance of the organization's culture
   10. Failing to establish interim benchmarks of success
   11. A lack of structural reinforcement to sustain the change
3. Absence of measurable outcomes: Closely related to the absence of a shared change vision, change efforts often fail because they neglect to define and focus on specific and measurable outcomes. Every change effort must be tied to defined, clear metrics that enable everyone from those in the boardroom to those on the front line to know if and when progress is being made on the change objectives.
4. Failure to communicate the vision: It's not enough to have a vision of the change and effective measures of the change outcomes. Stakeholders must understand and share this vision, they must understand the “whys” of the change, and they need to know the organizational and personal benefits resulting from a change.
5. Being surprised at the resistance to a change: Every change, no matter how positively it is viewed by change leaders and others throughout the organization, generates emotional stress for some. If not anticipated or understood, this emotional stress is likely to result in higher levels of change resistance.
6. Failure to integrate dissident perspectives into the change vision: The questions, issues, and concerns of the dissidents and other resisters who lead the pushback on the change can help improve and strengthen any change effort—but only if these dissidents are encouraged to offer their concerns. Successful change leaders pay attention to what the change nay-sayers are concerned about and then do their best to integrate these dissident perspectives into the change vision. This strengthens the change by subjecting it to rigorous scrutiny, responds directly to stakeholder concerns, and helps build stakeholder commitment to a change that is more reflective of their concerns.
7. Failing to anticipate and confront obstacles to the change: All organizational change initiatives experience more than a few bumps in the road. One characteristic of successful efforts is that the change leaders proactively anticipate, identify, and directly confront systemic and structural obstacles to the change vision and plan.
8. Failure to adjust or integrate what works or doesn't into the change vision: Successful change initiatives benefit most when change leaders have a high level of self-awareness that results from a critical assessment of the successes, missteps, and inevitable setbacks that they experience throughout the change implementation process.
9. Ignorance of the organization's culture: Culture (as you'll learn later in this chapter) plays a powerful and often underestimated role in the success or failure of a change initiative. Successful changes are guided by leaders who have a deep respect for and understanding of their organization's culture and its role in the change process. Because an organization's culture shapes the beliefs, values, and behaviors of people at every organizational level, it is a central contributor to the success or failure of every change.
10. Failing to establish interim benchmarks of success: Along with failing to define clear measures to gauge the change vision's success, the failure to establish interim benchmarks to measure the progress of the change can diminish stakeholder buy-in. Interim measures bring the added benefit of helping people see and feel progress—something that may be especially important for maintaining stakeholder motivation during a long-term change initiative.
11. Lack of structural reinforcers to sustain the change: In the end, one of the most significant causes leading to the failure of change initiatives is the failure to create organizational infrastructure to help stabilize the change and reinforce the new ways of thinking and acting. Without structural reinforcements, change leaders, those on the front line, and everyone in between tends to drift back into old mindsets and behaviors. As discussed in the next chapter, sustaining change commitment requires an investment in a strong infrastructure that reinforces the desired new mindsets and actions in organizational stakeholders at all levels.

Cultural Readiness and Receptivity for Change

The previous section explored some of the common reasons why change efforts fail. One of these—the failure to understand and effectively manage the organization's culture—is so critical to every organizational change effort that a bit more focus is necessary.

An organization's culture comprises a set of values, beliefs, assumptions, principles, myths, legends, and norms that define how people actually think, decide, and perform. Culture is made up of what is seen (behaviors and structures) and what is unseen (assumptions, beliefs, and values). It involves every aspect of an organization's life and the work life of everyone who is part of the organization.

Edgar Schein (2001) contends that culture is “a pattern of shared basic assumptions learned by members of a group to solve their external problems of survival in the environment and their internal problems of integration that work well enough to be taught to new [employees] as the correct way to perceive, think about, and feel about all aspects of their daily life.” Although the external challenges for an organization relate to its financial competitiveness and its survival in the global marketplace, the internal challenges relate to issues of coordination, goal setting, performance management, collaboration, and so forth.

 

Noted

Edgar Schein (2004, p. 32), professor emeritus at the Sloan School of Management of the Massachusetts Institute of Technology, defines culture as “…a basic set of assumptions that defines for us what we pay attention to, what things mean, how to react emotionally to what is going on, and what actions to take in various kinds of situations.” Schein, an internationally respected researcher, consultant, and author, is considered the founding father of the corporate culture field of study and has been in the forefront of developing strategies for both understanding and influencing culture since the 1950s.

 

All these shared basic assumptions are effective when they enable an organization to stay relevant and competitive in the marketplace as well as internally cohesive and integrated to achieve the organization's desired outcomes. These cultural assumptions and beliefs are ineffective if they prevent an organization from staying externally relevant or lead to the disintegration of the internal structures that facilitate organizational wholeness and cohesiveness.

Culture, then, becomes the critical force for any organization's survival and, as a result, a key driver of or an obstacle to change. Transmitting “what works” from one person to another helps employees deal effectively with both external and internal challenges. Culture is the hidden persuader that guides and shapes employee behaviors, thereby ensuring the stability of the organization's practices and behaviors over time. Because it drives employee attitudes and behaviors and sustains the status quo, culture must be an integral part of every change initiative. If you want to lead change effectively in your organization, ignore culture at your peril.

Although there are no secrets or easy paths toward understanding your culture and its likely effects upon your change initiative, organizational leaders can take certain steps to predict and account for culture as they plan for change initiatives. Here are some suggestions for using your cultural knowledge to help lead successful change:

• Know your culture. Don't start any change without first understanding how the culture defines your organization and its relative openness to the coming change. Do an assessment of your organization's cultural strengths and potential vulnerabilities. You can go in with a vision for what you want to achieve, but if you don't know how the culture will respond you are likely to fail.
• Understand how the culture might respond to the change vision. With your change vision and target in mind, identify which aspects of the culture are discordant with what you want to achieve. Having a clear vision of your organization's end state after the change will be critical to your cultural change efforts. Without a clear vision, the destination is likely to be remain elusive.
• Build your cultural knowledge into your change plan. It's not enough to know how your culture might respond to a proposed change. You need to use specific strategies to integrate this cultural awareness into every element of your change plan.
• Acknowledge and build on your cultural strengths. Edgar Schein (1999, p. 189) encourages change leaders to see their culture as essentially strong and effective. If it weren't an effective culture, Schein argues, then it probably wouldn't have survived. “Always think initially,” says Schein, “of the culture as your source of strength. It is the residue of your past success. Even if some elements of the culture look dysfunctional, remember that they are probably only a few among the large set of others that continue to be strengths.” Schein encourages change leaders to build on existing strengths rather than simply changing “those elements that may be weaknesses.”

Understanding Organizational Readiness for Change

Change readiness is the cognitive state that occurs when organizational members have positive attitudes, beliefs, and intentions toward the change (Armenakis, Harris, & Mossholder, 1993). Attaining a state of readiness is important to change leaders because those who are asked to undergo a change will be much more likely to accept the change; their resistance to the new directions and behaviors will be lower; and they will be, as a result, much more willing to embrace the change with commitment.

Change readiness is the first of the three cognitive states or conditions that people experience as they move (or don't) to embrace a change. These three cognitive states (displayed in figure 3-1) are readiness, acceptance, and integration.

Figure 3-1. The three cognitive states toward change.

 

Noted

When introducing a change, change leaders should strive to develop each of these three developmental cognitive states in stakeholders as the change moves forward:

• Readiness is being cognitively receptive to a change and is evident through a positive openness toward the change in the attitudes, beliefs, and intentions of stakeholders.
• Acceptance moves beyond simply being open and receptive to the change. Acceptance involves a belief in the change and a willingness to work with the change.
• Integration builds upon acceptance and is characterized by attitudes, beliefs, and intentions that wholly reflect the change and that are difficult to separate from the individual's routine ways of being. Integration is evident when new ways of thinking and acting (the objective of the change) are deeply ingrained within the everyday thoughts and behaviors of stakeholders.

 

At the beginning of every change, those who will be affected by the change may or may not be ready for or receptive to the change. Change leaders who want a successful change outcome should first assess the level of change readiness to understand how receptive those affected by a change are now—and learn what the specific characteristics of the change or the organization are that may be eroding change readiness.

It is also important to keep in mind that change readiness is a dynamic characteristic, meaning that the state of readiness shifts over time. People can also move away from a state of change readiness if the change process (or some other organizational characteristic) isn't managed well. For this reason, change leaders should continually monitor the state of readiness to determine if stakeholders are moving toward or away from readiness and if they have moved into acceptance or even integration.

The level of change readiness is critical knowledge to the change leader because eventual acceptance and integration of any change requires that stakeholders and a critical mass of individuals in the organization be cognitively ready for and receptive to the change.

Assessing Organizational Readiness for Change

Assessing organizational readiness for change involves reviewing both the cognitive state of the individual workers as well as the context and organizational environment in which the change is taking place. The major dimensions of organizational readiness and the various components within each include:

• Organizational support: This change readiness dimension includes such issues as the clarity of the organization's vision, the location of organizational decision making, the extent of employee participation in past organizational change efforts, the strength of the organization's training and development efforts, the extent to which employees' suggestions are listened to, the quality of organizational communications, and the extent of performance accountability throughout the organization.
• Organizational culture: This dimension includes such issues as the degree of cultural receptivity to new ideas or innovation, whether teamwork exists within and between work areas, the relative level of trust between leaders and employees, whether people come together when under stress or resort to conflict, the extent to which employees in the past have actively participated in change efforts, and whether people feel they are responsible for their own success in the organization.
• The change environment: This dimension of readiness includes such issues as the level of awareness by stakeholders throughout the organization of the forces that are driving change, the clarity of the change vision and its effects on the organization, the clarity and quality of the measures that will be used to gauge the success of the change, the organization's history with past change initiatives, the number of changes occurring at the same time, and whether the advantages from the change outweigh the disadvantages.
• Employees' attitudes and behaviors: This component includes such issues as whether employees feel a sense of urgency for change, the extent to which employees are fully committed to and engaged in their jobs, the degree to which employees are able to act independently in their jobs, whether innovators and risk takers exist at all organizational levels, the extent to which employees feel that they have the opportunity to influence or affect a change, the degree to which employees are receptive to change, and whether employees have confidence in their manager's ability to guide them through the change.

Getting It Done

In this chapter you have reflected on your organization's experience with change, explored the role of culture as a facilitator or barrier to change, examined change readiness as a key factor enabling or blocking commitment to change, and reviewed the four dimensions of organizational change readiness. It's now time to integrate this new knowledge into your own practice and the change that your organization is facing.

Exercise 3-1 asks you to document your organization's experiences with introducing and leading change. This exercise will help you identify potential organizational change management assets upon which you can build and identify potential organizational liabilities. Your answers here can give you a heads-up for things to watch for as your change initiative moves forward.

Exercise 3-1. Reviewing your organization's history with change.

Reflect on your organization's experience with introducing and sustaining change initiatives. Feel free to incorporate the most common causes of failed change initiatives (table 3-1) along with your responses to the thought questions in the chapter regarding your organization's past change initiatives.

 

Completing exercise 3-2 will help you identify potential cultural strengths and vulnerabilities in your organization. Knowing these in advance of introducing a change will help you build your change initiative on the cultural strengths and prepare for potential cultural barriers to the change initiative's success.

Exercise 3-3 offers you a change readiness assessment tool that will give you and other change leaders insights into the relative change readiness of your organization based upon the four dimensions of readiness explored in this chapter.

Exercise 3-2. Assessing your organization's cultural strengths and liabilities.

Your organization's culture can make or break a change initiative. Although a full cultural assessment prior to introducing a change should involve conducting interviews and focus groups with key stakeholders, the questions in this exercise will at least start you thinking about ways that the culture can facilitate or disable your change initiative.

Exercise 3-3. Assessing your organization's change readiness.

Use this change readiness assessment tool to assess the relative change readiness in your organization. You are encouraged to invite other change leaders to complete this tool and then come together to discuss your collective results. After you've assessed your organization's change readiness, use the results to help you shape your change plan in a way that incorporates the readiness level of the organization.

Reprinted with permission from Russell Consulting. 2006. www.RussellConsultingInc.com.

So far in this book, we have explored the character of change, the forces that are driving organizational change today, and the factors that influence your organization's relative readiness for change. With these chapters serving as background, it's now time to introduce the core of this book: the model for leading change and the role that leaders and managers play within this model in driving change forward.