Back to overview 12 principles for transformation Franz Schwarenthorer Partner Contact Franz Manfred Höfler Partner Contact Manfred Dietmar Bodingbauer Partner Contact Dietmar In these turbulent times, which demand a lot from organizations in order to survive and achieve sustainable success, the question arises: How can we manage to cope with the necessary changes successfully and with appropriate commitment? It is a matter of pinpointing the essential levers. In the change processes we accompany, we are guided by 12 principles that have evolved over many years of experience. We invite you to examine to what extent they could also be helpful for the upcoming changes in your organization. Awakening emotional energy for change Organizations tend to try to maintain their current state – especially if the current situation seems comfortable. In addition, managers and employees are often very busy with day-to-day business. Therefore, the question arises again and again: How can we succeed in gaining energy and motivation for our change project? There are three sources of energy that can be tapped into for this purpose. The first is the »away-from energy«: This energy is awakened by answering the question »Why should we change?« Even if what we have done so far was appropriate in the past, it helps to look at current developments to realize: Yes, if we still want to be successful in the future, we have to change! Benchlearning trips, customer forums and open discussions at management retreats can help for this kind of emotional inspiration. The second form is the »towards-energy«: This deals with the question »Where do we want to go?« – in other words, a powerful vision of the future. This vision should be attractive to all important stakeholders: customers, employees and managers. It gains its strength from imagining the future as concretely as possible: What services will we offer? For whom? How? How will we work together? And so on. It should be expressed and prepared in such a way that employees say: I’ll sign up for that! I want to be a part of that! The third source of energy lies in the answer to the question »How will we get from today to the image of the future?« The most important thing is that the process appears realistic for everyone – neither too fast and demanding, nor too slow and time-consuming – so that employees say: Yes, we can do this! Ultimately, it takes all three of these sources of energy and looking for answers to all three questions: » Why? Where? How?« Working “inside and outside the skin” right from the start Successful change processes need attention on two levels. On the one hand, at the level of the visible – the strategies, structures or processes – that we work on as part of the change. For this purpose, analyses are carried out, concepts are developed – often without much involvement of others – and implementations are planned. We call this level: Outside the Skin. In other words, everything that we develop rationally in terms of content and that we try to achieve with milestones and task packages. Many projects are primarily managed on this level and it is often surprising why so much resistance arises during implementation. The reason is that the 2nd level – Inside the Skin – often receives too little attention: this is about emotions, basic beliefs, and mental models. In classic projects, these topics are only considered at the end, when the project results are to be sold – and then they are possibly seen as causes of resistance. If you want to avoid this, involve the appropriate people at an early stage in the process. This can help to recognize which reactions the change could trigger and how to involve the emotions and mental models in such a way that there is cooperation instead of opposition and that the organization agrees to go along with it. Good instruments for the inside-the-skin level can be: comprehensive communication from the beginning, employee workshops, sounding board events or even pulse checks to measure feedback. Making new things quickly tangible Change processes often seem threatening because you are in an interim phase: the old is no longer valid and the new is not yet here. This triggers uncertainty – a feeling that makes many of us uncomfortable. Therefore, it is important to quickly make the new tangible – with the following three motivating principles: First, short-term, business-relevant successes provide all skeptics with evidence that the changes are feasible and meaningful. Second, trial and error is the basis for learning and development. Some things will have already worked, while others will still need to be adjusted. And, last but not least, our brain releases dopamine when we have achieved something – this acts as a reward and creates positive emotional experiences. Three good examples that make new things quickly tangible. How can this be supported? Through sprints, rapid prototyping or rapid results projects. Sprints are agile concepts and short periods of one to two weeks in which certain results are achieved. Rapid prototyping pursues the idea of not spending too much time with concepts, but quickly trying things out and showing them to customers. And rapid results projects demonstrate that it’s possible to make things happen within a short amount of time, even though hardly anyone in the organization would have thought they could be achieved. Thus proving »We can do it!« Creating meaning and inspiring belief in the future Most of us are only committed to change if we recognize the meaning in the change or feel a personal benefit. Designers of change initiatives therefore need an attractive and, above all, credible image of the future. This is the only way in which they can they bring employees out of their comfort zone and ignite a positive and inspirational energy for change. For images of the future to be powerful, they need to be more than just nice slogans or figures on PowerPoint. A pull toward change is created when those affected can derive something positive for themselves and have confidence in the management. People have to picture it. What does the future look like for me? What does it mean to have a secure job, to take on an exciting new task, or to have new learning opportunities? Visions have to emotionalize. Management buzzwords or messages such as: “We want to improve our EBIT by x percent” will certainly not spark excitement in people’s eyes for a change. Even though, in our VUCA world, the future is not predictable and certainly not plannable, every change process needs a clear guiding idea of where the journey should go. When designing a change vision, it is best to start with the individual ambitions of influential leaders, and then engage in a good dialogue to create a common vision of the future for all stakeholders. Change visions that succeed in addressing the latent aspirations of many people in the organization are particularly powerful. Second, a change initiative has to create value for the customers. Changes that don’t have relevant impact on the market are not sustainable. Therefore, change leaders should always answer the question: “How does this change strengthen our future value proposition and support the long-term reason to exist as an organization?” Helping people transition People react differently to change. Some welcome and embrace change and are fully in their element. Others tend to avoid change or at least are not very optimistic about it. Results of brain research show that uncertainty and changes in familiar surroundings or social status are perceived as threatening and trigger stress. This can lead to emotional overreaction – sometimes incomprehensible to others – the so-called »fight or flight« mode. This is sometimes perceived as resistance. It is helpful to see these or similar “phenomena” as important signals and expressions of the energy for change and to use them as a resource. In a transformation phase, it is therefore important to reduce stress and support the people in the organization when moving from the »old to the new«. This can be done through consciously designed communication, learning opportunities or coaching. In such situations it is also important how leaders are perceived – ideally as a role models, providing orientation and support. Strengthening the sense of community Thousands of years ago, people organized themselves into »tribes« and strived for security and protection in their community. Similarly, in today’s organizations, employees seek psychological security and social belonging in teams, groups or projects. We know from brain research: Whenever I experience social connection as a human being, my brain releases the happiness hormone »oxytocin«. Especially during changes that tend to trigger uncertainty or fear, positive team experiences are needed to provide security and social stability. Above all, safe spaces make it easier for us to learn new behaviors. Typical formats for this are: Project teams that pursue challenging goals in a self-directed way, thoughtful team building when setting up new team structures, or »retreats« of leadership circles where people can free themselves from the constraints of their roles at work and meet each other on a personal level. Large group workshops as part of a change initiative, in which several hundred people spend an intensive day of dialog in a large room, also create a sense of community and produce a lot of oxytocin. A change manager acts like a good coach in team sports: They create situations that allow for both top performance as well as experiencing a sense of community. And there is one thing we should not forget: The way in which social communities are structured has a massive impact on whether changes succeed or fail in the long term. Initiating movement of volunteers with positive energy Successful change operators are those who understand transformation as a shared »journey« or, even better, as a »movement«. So, what is the secret of successful movements? They come about through guiding ideas and inspiring leaders who succeed in awakening people’s longings for change. In most cases, they are strong personalities who are convinced of an idea and act as role models who succeed in winning over comrades-in-arms who voluntarily join them pursuing the vision. These intrinsically motivated pioneers burn for a cause and are strongly committed to a guiding idea − often even against the dominant opinion. However, a real movement only arises from the first »fast followers«. Usually, these are volunteers who work on concrete initiatives without aiming for a career boost or reward. They are willing to go the »extra mile« for a cause. Every successful Change Journey relies on diverse teams of volunteers. Change thought leader John Kotter calls this network of volunteers »the 2nd operating system« of an organization. While the 1st operating system ensures operational business success, the 2nd operating system acts as an energy center for meaningful innovation. However, a movement will only result in sustainable change if it succeeds in building good bridges with the traditional organization. This requires sufficient mutual appreciation and, above all, a few influential people who act as bridge builders and translators between the two worlds. Removing blockades Change also means letting go and releasing barriers. In order to establish new behavior, it is often necessary to remove restrictive structures. Popular management systems (such as MbO and Individual Incentives) as well as existing structures (for example: silos with a high division of labor) can especially hinder meaningful change because they reinforce existing patterns of behavior. In most cases, they were designed to encourage a certain behavior, however it is no longer helpful in supporting the new direction – strategically or culturally. For example, introducing team goals instead of individual incentives can be an important step in overcoming lone-fighter mentality. Change management, therefore, also means creating new framework conditions for future behavior, removing rules and regulations within the organization, and sometimes also initiating radical structural remodeling. Ensuring stable elements In transformation processes, it often feels like no stone is left unturned. Everything changes, nothing seems to offer stability and support. The art of effective transformation is, on one hand, to bring about movement and, on the other hand, to create security through stable elements. Stable elements are necessary to enable people in organizations to commit themselves to the new path. Examples of stabilizing elements in change processes include: Firm principles and values, an attractive vision, or leaders who act authentically. Closely timed communication formats, stable team compositions, and a few central rules of the game. A well-designed interplay between stability and change requires ongoing reflection processes and the willingness of leadership to see change as a personal and organizational learning process. Consistent leadership Change cannot be “commissioned” by management and delegated from the top down – even if that’s what we would prefer sometimes. On the contrary, the role of managers is pivotal to success. Here are the three essential aspects of leadership during a change. First, leaders themselves must have a clear picture of the vision and the desired outcomes of the change. Secondly, they must clearly represent and exemplify this future possibility through words and actions. Executives often underestimate their own effects as a role model and the power of their messages. And thirdly, they are managers of change; in particular, they must create the necessary freedom, resources and environment. The willingness to learn and an openness to personal development can help in this respect. Less helpful is the attitude »I can already do it, now you have to learn it«. Far-reaching change processes are often accompanied by changes in leadership roles. For example, if I ask for more initiative and innovation among employees, I also need to consider what I can contribute myself through my leadership style. This also requires openness to one’s own development and accepting support such as coaching. Operating in learning loops Social systems – and every organization is such a system – are not consistent and controllable like a machine. If I press a certain button on a machine, I can expect what will happen – it is predictable. But when I intervene in a social system (e.g., make an announcement or make HR changes), the system’s reaction depends on a variety of factors and is generally unpredictable. For example, the second time I announce a savings program, the reaction will be different – based on the organization’s experiences the first time around. Therefore, detailed design and exact project planning do not work well in change processes. What is needed are actions in short cycles with learning loops, based on systematic logic: first, set an intervention or measure. Then, observe and analyze the effect, in other words, ask »What does this teach us about the logic of the organization?«. And finally, based on this, decide on the next interventions. Of course, we need an overall plan, a rough roadmap to guide us. The actual implementation, however, happens in loops and has to be evaluated and adjusted continuously through reviews and analytical reflection. Building on existing resources The question of resources in change processes has several aspects: First: Successful patterns as resources Change in principle is easier if we don’t consider everything in the past as “bad” and in need of change. Instead, let’s focus on what has made us successful so far. Certainly, we have to throw some skills or patterns overboard, but which ones should we keep and build on? Acknowledging our strengths takes away the fear and fosters more security and confidence that we can create change. Secondly: look for the pioneers Often, the new is already present in the organization, but not yet easily visible. Perhaps a team is already working according to agile logic, innovative methods are already being used in one area, or individual managers are already acting in the frame of mind that we want. These »pioneer areas« should be made more visible. We can build on them and learn from them. And finally, it is important to identify where the human resources for the change lie. Which skills of which people can we particularly rely on for the change? How can these people become change agents and supporters? And what new resources do we need to develop or bring into the organization? Would you like to know more? Contact