Why Change Fails: People

September 21, 2015

None of us are strangers to change. So why is it that the financial services industry has such difficulty in implementing effective and lasting change? Of course it’s a highly complex landscape with multiple competing priorities, but it’s also an environment that contains some of the brightest and most driven people you’re ever likely to meet. So why can’t they crack it?

There is no end of statistics and horror stories to draw from, but in this set of three articles we would like to explore some of the underlying patterns assocciated with change failure by looking at the problem from three distinct perspectives – people, process and technology. This article will focus on the people elements of change failure.

Many institutions continue to hope that employees included in their change initiatives will universally embrace the changes thrust upon them. They make the gross assumption that everyone’s reaction to the change will be predictable and positive, and assume that everybody will do what they are told, enthusiastically, and to the best of their ability. Why is it then that we’re all surprised when that isn’t the case? Moreover, why does it take so long for that realisation to arrive… often too late in the program to easily mitigate?

It will be your employees who represent the largest variable in whether the change successfully achieves its desired outcome, so how do we improve the odds? Well, firstly we need to appreciate why people typically resist change, and for that we need to dip into behavioural drivers.

“Nature versus nurture” is a very old phrase popularised by Sir Francis Galton in his 1869 book Hereditary Genius, inspired by his half-cousin Charles Darwin. Many scientists now believe this line of discussion to be out-dated due to the ambiguity between inherited and learned behaviour and the levels of mutual feedback on both sides. But there is no doubt that everybody has learned behaviour – sometimes consciously learned, sometimes unconsciously. So it’s very useful to understand what behaviour might have been learned within the organisation and what that means for change.

• Trust nobody – Those responsible for, or involved in, the change could have previously demonstrated behaviour that has broken any feelings of trust, as often happens as a by-product of aggressively forced change. In these cases, the trail of collateral damage is often considered to be worth it in the short term… but the long term good-will of staff can cause issues with active resistance within future change initiatives (Change Anchor).

• Keep your head down – In these volatile times many people have learned not to stand up and speak out, but to put their head down and stay under the radar. So although this is unlikely to be a source of active resistance, it definitely represents a loss of positive contribution and often passive resistance (Change Drag).

• Ignorance is bliss – In today’s relentless environment of change many people will have learned to cope with the overload of demands by focusing exclusively on what’s urgent. This often results in passive resistance followed by intense fire drill activity as it becomes urgent. What makes this worse is that many delivery options that could have been more suitable if started earlier are ignored due to fire drill time pressures – leading to sub-optimal tactical solutions (Change Panic).

• Be afraid – Basic concern for job security, or stunted career development, as a result of the change will cause many employees to actively resist the change. Often demonstrated by claiming unique subject matter expertise, other conflicting priorities, and pointing out all the reasons it could possibly (and hopefully) fail. This can be a very active generator of change resistance (Change Anchor).
So, how can these behavioural responses be transformed into a more positive relationship with change? Well, there has been a great deal of research on the topic and three main ingredients emerge:

• A Champion – Someone respected who can represent the change and inspire the right behaviour.

• A Story – A narrative that can explain what the change is, what’s driving it, and why it’s important. A good change narrative is based on logic and reason, but a great one also triggers an emotional response.

• An Opportunity – the chance to build the necessary skills and engage positively with the change in order to be a part of its success.

Identifying a leader (or sponsor) for any significant change program is something that is very much rooted in the culture and hierarchy of the organisation, and as a result, is very difficult to influence. However, what can be influenced is the level of visibility, engagement and clarity provided by the sponsor. A successful change requires a set of behaviour and actions taken from the top. This starts with the building of the story.

To build a story that people can believe in we need to understand what really motivates people in the workplace. Studies have shown that professional motivation is typically spread equally across five main areas – me, my team, my company and shareholders, clients, or society. So any reason for change that talks to shareholder return will appeal to only about 20 per cent of the workforce. This is quite worrying as it means that most single-facet business cases fail to motivate 80 per cent of the workforce. To be really compelling, the reasons for change need to touch on as many of the five areas as possible. If this can be achieved up front, then a huge amount of positive support can be unlocked.

So we’ve now hopefully given a little thought to understanding and unlocking some of the behavioural constraints, but how do we go a step further and turn this into a positive force for change?

Well, that’s both the simplest and most difficult thing to do. Simple, because it’s conceptually straight forward, and difficult because it involves doing something that doesn’t come naturally to many change leaders. We’ve already mentioned that financial services institutions employ some of the brightest and most driven people you’re likely to see. We’ve looked at some simple steps to inspire and engage employees, so the next step is for the change leadership. They have to listen, really listen.

Only when change leadership listens to the opinions, insights and solutions from their employees will those employees feel like they have the opportunity to play an active part in the change and really make a difference.
Once you have that, you no longer have a change programme, you have a change culture…. And that’s something worth striving for.

(This is the first in a series of three articles about why change fails being published in the upcoming Brickendon Journals.)

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