Organizational and Culture Transformations. Mergers and Acquisitions. Spin Offs and Divestitures. At some point, all organizations will go through times of change to stay competitive and improve profit margins. But all too often, executives don’t take the time to create a change plan that supports employees and communicates what the changes are and why they’re happening.
When people don’t know why a change is happening or how it will affect them, it causes confusion, apathy and ultimately a decrease in productivity. This drop in productivity can significantly damage the operations of a business and negatively impact customers – a cost that far outweighs putting the right resources behind giving employees the support they need.
We know the realities of change. But some executives are still not taking notice. How can we convince them to endorse a change plan that focuses on employees hearts and minds?
An engineering company that we were working with was in the process of changing their operating model and structure to drive efficiencies. They weren’t planning on investing resources or budget into supporting employees through the change – instead, they were focused on implementing new reporting lines, processes and ways of working . . . and then expected employees to get on board.
After speaking to stakeholders, we quickly realized that the upcoming changes were going to have a significant impact on employees. Our clients who were driving the change in HR and Communications knew they needed to raise the potential drop off in productivity to executives, but that required a quantifiable ROI. Based on psychology we know that, as human beings, we always have a greater reaction to losing something vs. gaining something. This gave us confidence that if we could quantify the loss in productivity and performance, we would get the attention of the CEO and executive team.
To predict this loss, we used research from the Institute of Labor Economics who studied 100,000 employees and found that between 20-25% of employees don’t transition through change effectively. Based on this research, we took the following steps:
1. DETERMINED THE KPIs AND CURRENT PERFORMANCE GOALS
Working with HR, we looked at the KPIs and current performance levels of the affected roles within the organization. We then segmented employees into performance levels and calculated the average performance level for each segment. For example, for the sales roles that were being affected, we segmented employees based on their sales performance vs. their target.
2. MADE PREDICTIONS BASED ON DATA
Next, we looked at what would happen if 20% of each segment (a conservative percentage) didn’t transition through the change effectively. This enabled us to quantify the risk to productivity for all affected roles. For some roles like sales, we were able to quantify in terms of lost revenue; and for others, we quantified in terms of efficiency, time, error rates and waste. Based on these predictions, we created a picture of what would happen if employees were not properly supported through the change. We were able to show that the potential losses were much greater than if we spent the time to put together a thoughtful change plan that was designed with people in mind.
3. CREATED A COMPELLING STORY
To get the attention of the executive team, we worked with stakeholders to create a compelling story. This story included the quantified risk, the proposed change plan to mitigate the risk, and the upside of getting the change right in terms of an improved customer experience, employee engagement and talent retention.
Ultimately, the executives put their personal support and commitment behind providing people with the resources they needed to navigate through the change successfully. This enabled the company to transition effectively, maintain productivity and realize the benefits of the change quickly.
If you are responsible for leading change, but you need to secure more buy-in from change-resistant executives to invest in helping employees adapt, consider ways to frame and quantify the risks. Any potential drop in productivity impacting 20% or more of a company’s workforce should make leaders sit-up and take notice!