Quick: You work for an organization that is spending millions of dollars on a very important new process that will completely change how you do your work, change who you work with every day and require you to think about your job in a totally new way. The success of the company depends on you and your co-workers! Go knock ’em dead, tiger!
Feeling pretty confident right about now? Didn’t think so.
Every day, in organizations around the world these are the demands being placed on the people who do the work of the organization. Granted, it is rarely expressed so bluntly, or with such sensitivity to what is truly being asked. Most often, the organization simply announces the initiative—whether it’s a new technology, a new process or a new way of thinking—as if the initiative itself represented the sum total of the change.
This is rarely the case. Change is always about people. As jarring as our “go get ’em tiger” pep talk may have been, it at least represents a level of clarity that is often missing in organizations.
The People Piece
Dramatic case studies are not hard to find. Let’s take ERP (enterprise resource planning) as an example. For the uninitiated, ERP is a comprehensive—and complicated—technology initiative that promises system-wide efficiencies by sharing common data across every part of an organization. Starstruck, lots of companies have grabbed hold of ERP like Indiana Jones lifting a golden idol from an Incan temple. The results have been about as encouraging. (Remember that giant rolling boulder?)
For example, in 1999, Hershey’s ERP startup problems cost the company $150 million. That same year, FoxMeyer Corp.’s bungled ERP installation cost the company a $1 billion lawsuit and ended in bankruptcy for the company. Waste Management abandoned its initiative and had to eat the cost of $150 million.
The lesson here is not to avoid this ERP business. Nor should you avoid total quality, culture mergers, Six Sigma, CRM (customer relationship management), shared-services model, supply chain or any other comprehensive change initiative. Many companies have transformed themselves with these powerful initiatives. No, the lesson here is much deeper. And simpler.
Change is about the people. Whatever your major initiative is, there’s a pretty good chance that, for it to work:
- People must change how they think.
- People must change how they act.
- People must buy in to the importance of the initiative.
In other words, just because you’ve installed the software and finished the training, that doesn’t mean your work is over. You’re just getting warmed up. To produce powerful results, you need to plug the people variable into the equation, which change and communications company Paradigm Learning expresses this way:
Quality of the Change Initiative x Alignment of People = Results
The equation is a variation on a theme. This version comes from a change leader at consumer products giant Kimberly-Clark. Michael Fischer uses the equation to describe the reason why the company’s massive supply-chain initiative has been so successful. Kimberly-Clark realized early in the process that changing an entire organization, or even part of one, is a complicated equation.
Much has been said and written about the first element of the formula above, the quality of the change initiative. Though devilishly difficult, this variable has the virtue of being obvious: Install the technology wrong, and it isn’t going to work, end of discussion. Many consultants and change-management literature focus on this critical first variable.
But it’s this second area—the alignment of people—that is so often neglected. And it’s here that powerful leverage can be found. For transformation to occur, and for actual results to be achieved in organizations, there must be alignment of organizational culture (the norms for behavior; the operating principles; the shared understanding of “how things work around here”) and mental models (the often-hidden beliefs, conclusions, assumptions and ways of thinking that drive how individual people perceive the world).
The Great Transfer: Vision, Knowledge, Responsibility
Cultures. Mental models. Paradigms. They’re all stubborn, frustrating things. It would be nice if you could change them by printing a slogan on a coffee cup, but the experience of countless organizational change agents continues to support that this is not the case. People are fiercely resistant to changing the ways they perceive and interact with their world—especially if that change is imposed upon them.
Those organizations that have succeeded in leading the horse to water and getting it to drink suggest that widespread and willing enrollment is positive. According to Marathon Oil Change Manager Gregg Stapleton and IBM Global Services Senior Consultant Holly Benson, change agents must be sensitive to:
- Transferring the vision.
- Transferring knowledge.
- Transferring responsibility.
At this point, the reasonable change agent might conclude, “Oh, so this is a training issue after all, right?”
Not quite. “Training” implies something you “do to” employees. The goal here is that more elusive activity—learning. As theorist David Kolb illustrates, learning happens when people choose to embrace a new concept, practice its application in their own contexts, reflect on their experience and ultimately extend its application more comprehensively.
You can’t do this with a PowerPoint presentation.
Author Michael Robin suggests an intriguing approach to learning in his powerful article, “Learning By Doing” (Knowledge Management magazine, March 2000). In it, Mitchell says, “In today’s knowledge-intensive global economy, performance is [hard to predict] and standardized behavior may not breed success. Businesses need to innovate faster, respond to new challenges and discovery opportunities to create value. In this new situation, traditional training methods fall short in several major areas … relevance… time… and cost.”
The article goes on to state, “One of the clearest impacts on organizational productivity from experience-based learning can be seen in higher levels of retention, which ultimately results in a greater transfer of knowledge into informed action. While retention levels for traditional learning from lectures or reading are typically just 3 to 5 percent, retention levels with experience-based learning have been known to reach 80 to 90 percent.”
“Discovery Learning” is a form of experiential learning that:
- Is learner-driven, not instructor-driven.
- Is team-based.
- Treats learning as a cycle, building on each insight.
- Allows time for reflection and internalization.
- Encourages mistakes as a tool for learning.
- Provides the big picture and nurtures new mental models.
Technology and Alignment at Marathon Oil
Let’s return to the world of SAP for a case study. The organization is Marathon Oil Company, a Houston-based energy company that in 2000 began its “Project Renaissance” initiative to implement SAP for more than 2,400 employees all around the world.
In addition to the formidable technology component, Marathon treated Renaissance as a people challenge from the very beginning and put a plan in place for the transfer of vision, knowledge and responsibility. And they used the power of experiential learning to do it.
Partnering with Tampa-based change and communications experts Paradigm Learning, Renaissance developed a communication tool called a “Discovery Map.” An eye-popping, 4-foot-by-6-foot illustration loaded with data, images and metaphors related to the Renaissance initiative, the Discovery Map illustrated three components that are universal to change initiatives: Marathon’s current reality (including its challenges), Marathon’s vision, (or articulation of where it wants to go) and the means for crossing the map from “here” to “there” (in this case, the SAP technology represented the bridge.)
In a structured learning activity, members of the organization interacted with the dynamic content of the Discovery Map, connecting its metaphors to their own experiences.
The end of this story is remarkable: Employees recognized and embraced the value of the challenging SAP technology. Empowered by this sweeping organizational support, “Renaissance” came in under budget. And after only 13 months of work (a record in the industry) they were up and running.
In their reflections, leaders at the highest levels of the organization cited this “commitment”—not the technology or the software—as the cornerstone of their success.
Marathon got it right: It’s about alignment. It’s about people.
Corn Products Aligns Its Workforce
Imagine a scenario where the entire senior leadership team of an organization is focused on a goal. Now imagine that the majority of the workforce doesn’t understand the goal. Not only do they not understand it, they don’t even know what the words in the written statement of the goal mean. That was the situation facing Corn Products, a worldwide leader in food ingredients and industrial starch.
In the process of trying to strengthen its bottom line while expanding its product portfolio, the “mantra of the entire senior team became: ‘We must improve working capital, we must improve working capital,’” said David Spirk, director of management and organizational development. “But during a meeting, one employee raised their hand and asked, ‘What exactly is working capital?’ At that point, I knew we had some work ahead of us.”
Corn Products leaders quickly realized they needed to focus on alignment. They had to ensure that everyone was on the same page if the revitalization process was to succeed. Understanding working capital was only the first step. Buying into the notion that it was critical to success and, even further, that each employee can impact it were the mission-critical challenges. To do that, Corn Products chose an offbeat method—a board game, again based on Discovery Learning. Paradigm Learning offered Zodiak: The Game of Business Finance and Strategy as a way to build understanding, knowledge and, most importantly, commitment to doing what it would take to reach Corn Product’s goal. The Zodiak game put Corn Products employees in the role of business owner for a day, and let them “run” an organization through three simulated years of operation.
During the play of the game, participants learned how to read and construct income statements and balance sheets, how to analyze numbers and how to interpret the impact of their decisions on key financial measures (like working capital). As they immersed themselves in the game, calling their own shots, they became more fluent in the language of business and came face to face with the critical financial impact individuals can have on the company’s success.
Is it working? Are employees aligning around what’s important to Corn Products? The company’s leaders think so. “It is essential that our people know where this company wants to go and what we have to do to get there,” Spirk said. “We’re all dependant on each other, and this experience is something that vividly shows each employee how true that is.”
Organizational Change and the Temple of Doom
You’re in the Incan temple, reaching for that golden idol of organizational change. Careful. There are traps here.
- What are the results you want to achieve?
- How will you implement the change flawlessly and with excellence?
- Finally (and this is the important part): How will you align the people of your organization around the initiative so that they will choose to embrace the change?
Watch the alignment, and the prize is yours.
Catherine J. Rezak, with partner Raymond Green, founded Paradigm Learning in 1994. Paradigm Learning is an employee training and communications organization, specializing in innovative “discovery learning” techniques, including business games and simulations, Discovery Maps and online programs to educate learners around critical business issues. Catherine has more than 20 years of experience in the human resource consulting and training field.
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