Forbes.com

Walking the Talk on Change

Three things make leading corporate change difficult, but none is an excuse to step back.

Par David Michels

First published on mars 06, 2020
min


This article originally appeared on Forbes.com. In the United States, leadership is front page news as primary voters cast their ballots for the candidates running for president. Wherever in the world they take place, political contests come down to a question of leadership, and, hopefully the ability to lead change. My first model of leadership was my father, a self-made entrepreneur. The first in his family to go to college, he trained as a dentist, and in the late 1970s had his entrepreneurial break-out when he launched a pioneering dental insurance company. When it comes to leadership and change, he mostly does things instinctually. “What’s so complicated?” he says. “Just go do it!” It’s a simple but fair question. After all, what is so complicated? The reality is that most leaders, whether politicians or CEOs, struggle with change, and the data bears this out. One of the saddest numbers in business is the statistic on how many corporate change efforts fail. Bain research has found 88% fall short of their original goals, and multiple other studies, while they vary in their specific findings, also conclude that the figure is high, indeed, too high. Most of the business executives I talk with genuinely understand both the importance and the difficulty of getting organizations and the people within them to change. Their instinct is right. Their talk is right. But then the action falls short. They can talk the talk, but don’t walk the walk. Why is it so hard? Let me offer up three potential reasons, and some hope for what’s on the horizon. First, change can feel vague and intangible, and, consequently, hard to act on. It’s like the wind: you feel its influence all around you, but cannot reach out and grab it. Managing change doesn’t lend itself easily to clean, analytic problem solving the way mathematics and engineering do. It’s complicated by human behavior and all the richness and, sometimes, craziness that brings. Because of this complexity, it’s often hard to know exactly what to do. So we retreat to our instincts with all the best intentions, and end up falling well short of what we could be. Luckily, there are practical tools and approaches that make it possible to break down change and tackle it analytically, just like any other challenge or opportunity. Second, because change is hard to measure, it’s also hard to manage. If executives want to improve the change-ability of their organization, they need to answer some basic questions: What baseline are we starting from? What should we do first? How do we measure progress? An instructive analogy here would be to examine the impact that measurements of customer loyalty have had over the past 20 years. Companies have long had a strong financial “currency,” a way to measure, talk about, and manage financial impact, but prior to these new measures, they had no equivalent “currency” for the health of their customer base. The advent of simple and effective ways to measure customer advocacy, including the Net Promoter Score, ushered in a revolution of investment, activity and improvement. We need the equivalent “currency” for change, to develop practical solutions. Third, and perhaps most profoundly, we all suffer from a number of cognitive biases, often unconcious, that can hold us back. Perhaps the most relevant is the natural human tendency to assume that how we did something in the past will also work in the future. What behavioral scientists term “outcome bias” stems from judging decisions by their outcome without sufficiently considering that chance or some other factor may have had an important impact. The outcome, even if positive, may have been even better if we had followed a different process, something we also tend to discount. Decision making generally can be improved by focusing more on process than outcome. Change can also take a long time, and this conflicts with another bias behavioral economists have recognized: time discounting. We weigh present rewards more heavily than future ones. Indeed, the further out the reward or change, the less valuable we see it. As humans, we gravitate toward immediate gratification, and therefore prioritize short-term action. But real change requires linking long-term thinking and strategy to implementation in order to see results. As my father also says, there are always reasons, but never excuses. Recognizing these reasons can help us better understand why it’s so hard to “walk the talk,” but what’s most important is what we do about that. How does a leader choose to react to these forces described above? Does he or she retreat to instinct? Refocus on more tangible and “pressing” topics? Delegate the problem to others? Or does he or she instead take up the challenge? Open up to learning new things? Make change tangible and part of the strategic plan? Fight accepting “change is hard” as the final answer? It may be complicated, yes, but with the right choices, we can indeed “just go do it.” Read More Change Management Insights Change management has been around for decades, but more than 70% of change efforts fail. Bain’s Results Delivery® insights help companies to predict, measure and manage risk, starting on day one.

This article originally appeared on Forbes.com.

In the United States, leadership is front page news as primary voters cast their ballots for the candidates running for president. Wherever in the world they take place, political contests come down to a question of leadership, and, hopefully the ability to lead change.

My first model of leadership was my father, a self-made entrepreneur. The first in his family to go to college, he trained as a dentist, and in the late 1970s had his entrepreneurial break-out when he launched a pioneering dental insurance company. When it comes to leadership and change, he mostly does things instinctually. “What’s so complicated?” he says. “Just go do it!”

It’s a simple but fair question. After all, what is so complicated?

The reality is that most leaders, whether politicians or CEOs, struggle with change, and the data bears this out. One of the saddest numbers in business is the statistic on how many corporate change efforts fail. Bain research has found 88% fall short of their original goals, and multiple other studies, while they vary in their specific findings, also conclude that the figure is high, indeed, too high.

Most of the business executives I talk with genuinely understand both the importance and the difficulty of getting organizations and the people within them to change. Their instinct is right. Their talk is right. But then the action falls short. They can talk the talk, but don’t walk the walk.

Why is it so hard? Let me offer up three potential reasons, and some hope for what’s on the horizon.

First, change can feel vague and intangible, and, consequently, hard to act on. It’s like the wind: you feel its influence all around you, but cannot reach out and grab it. Managing change doesn’t lend itself easily to clean, analytic problem solving the way mathematics and engineering do. It’s complicated by human behavior and all the richness and, sometimes, craziness that brings. Because of this complexity, it’s often hard to know exactly what to do. So we retreat to our instincts with all the best intentions, and end up falling well short of what we could be. Luckily, there are practical tools and approaches that make it possible to break down change and tackle it analytically, just like any other challenge or opportunity.

Second, because change is hard to measure, it’s also hard to manage. If executives want to improve the change-ability of their organization, they need to answer some basic questions: What baseline are we starting from? What should we do first? How do we measure progress? An instructive analogy here would be to examine the impact that measurements of customer loyalty have had over the past 20 years. Companies have long had a strong financial “currency,” a way to measure, talk about, and manage financial impact, but prior to these new measures, they had no equivalent “currency” for the health of their customer base. The advent of simple and effective ways to measure customer advocacy, including the Net Promoter Score, ushered in a revolution of investment, activity and improvement. We need the equivalent “currency” for change, to develop practical solutions.

Third, and perhaps most profoundly, we all suffer from a number of cognitive biases, often unconcious, that can hold us back. Perhaps the most relevant is the natural human tendency to assume that how we did something in the past will also work in the future. What behavioral scientists term “outcome bias” stems from judging decisions by their outcome without sufficiently considering that chance or some other factor may have had an important impact. The outcome, even if positive, may have been even better if we had followed a different process, something we also tend to discount. Decision making generally can be improved by focusing more on process than outcome.

Change can also take a long time, and this conflicts with another bias behavioral economists have recognized: time discounting. We weigh present rewards more heavily than future ones. Indeed, the further out the reward or change, the less valuable we see it. As humans, we gravitate toward immediate gratification, and therefore prioritize short-term action. But real change requires linking long-term thinking and strategy to implementation in order to see results.

As my father also says, there are always reasons, but never excuses. Recognizing these reasons can help us better understand why it’s so hard to “walk the talk,” but what’s most important is what we do about that.

How does a leader choose to react to these forces described above? Does he or she retreat to instinct? Refocus on more tangible and “pressing” topics? Delegate the problem to others? Or does he or she instead take up the challenge? Open up to learning new things? Make change tangible and part of the strategic plan? Fight accepting “change is hard” as the final answer?

It may be complicated, yes, but with the right choices, we can indeed “just go do it.”

Change Management Insights

Change management has been around for decades, but more than 70% of change efforts fail. Bain’s Results Delivery® insights help companies to predict, measure and manage risk, starting on day one.